It’s no secret that Americans love their cars. For a country of 330 million people, it may surprise you to learn that there are over 290+ million registered vehicles in the United States. This is what makes starting a used car parts business a driving demand in the USA.
With such a large market of car owners, there will always be a lot of business opportunities for buying and selling car parts. Luckily, you can get in on that yourself. Let’s talk about how to start a used car parts business today.
What you will need to start your own Used Car Parts Business:
4. Merchant Account
5. Sign Up for a Lead System
One of the most important things you will need is experience. If you do not have any experience in the automotive industry, then this line of business may not be for you. It is very important that you have general knowledge about automobiles. For example, you should know what an alternator is or know what a transmission or rear-end does on a vehicle. If you do know, then you may have found a great way to earn money working from home or remote and owning your own business.
Next, you will need the following to get started. This includes the need for a website, computer, credit card merchant account, credit card for leads and purchasing, and a phone.
A website is the digital storefront for any modern business, and having one of your own is a critical first step if you plan to sell used auto parts online. You only need about 5 pages minimum for a site designed for the automotive industry and we can help get you in touch with a company that can put this together for you.
As your parts business gets off the ground, your website becomes an avenue for generating your own leads in addition to the ones that we supply you with. The website company can help you optimize the site’s SEO to grow your traffic and build your customer base.
To sell and drop ship auto parts online, you will need a phone to be able to communicate with clients, auto shops, and parts dealers. A working cell phone is all you need to get started in the auto industry, but as your business grows larger, you may also want to consider an enterprise phone line or VOIP service.
A working email address is another form of communication that you will need to drop ship auto parts online. When you’re just getting started, it’s easy to set up a Gmail or Yahoo email account for free so customers know where to reach you online.
Later down the line, you can create an official email address on your website to make your business look more professional.
Whether it’s through your bank or a private firm, having a merchant account with no mark-up fees is an important part of cutting the overhead costs associated with running your business.
We have a great contact in the banking industry that can help you set this up easily.
Drivetrain Leads is a service that helps you drop ship used auto parts online by providing you with a list of leads to go after. Our lead subscription service provides the leads as we receive them from our parts network all over the country.
Our service sends leads to your inbox 24 hours a day. With the Drivetrain Leads service, the good news is that you pay a flat rate weekly, so you know ahead of time exactly how much needs to be budgeted for the next round of leads.
The leads are shared between a handful of companies. We do this to make our service as affordable as possible.
Once your used parts business is up and running, you should be able to break even from the cost of our service within 1-2 days of every week, leaving the rest as profit. Some deals can even be a home run sale that can pay for weeks of leads in just 1 sale.
Drivetrain leads has an extensive network of auto parts websites around the web. People looking for used car parts lands on our sites and submit a request looking for a specific used part. From these parts requests, we are able to generate a healthy stream of leads for potential drop shippers like yourself to go after.
With some of our websites being up on the web for over 10 years now, they generate a huge number of requests for used auto parts.
Our leads are generated in-house from our network of used auto parts websites. For example, if someone is looking for a 2010 Toyota Camry right taillight, they may Google it. If they find one of our sites on Google, then they may fill out a form for us to find a replacement part for them.
Once their request has been submitted to us, the lead goes to our server and is then sent to our subscriber base.
The leads generated from our system almost always have a valid email address, and most of the time, a working phone number as well. We cannot control what people write for their contact information when they submit a parts request, but a majority of the time, the contact information is good because that person is looking for a car part that they really need to get back out on the road again.
We do guarantee to deliver real leads from real people. Rarely, someone may submit a lead with bad contact information. This happens maybe 1% of the time.
If you do get a bad lead, delete it and move on. Your closing ratio will depend mostly on your phone skills, how you deal with people, the warranty you offer, the shipping service, and how well/quickly you respond to email requests.
No. Filling a request for a customer involves contacting them by email and/or by phone. Sometimes, people will respond, but sometimes they will not.
Good communication skills, being able to provide a professional service, selling competitively-priced parts, and providing each lead with good information are all important aspects of being able to close a lead once you’ve gotten it.
Your email response template should be professionally written so that it grabs their attention, but does not oversell or sound cheesy. These are “warm” calls, not “cold” calls, but others may also be trying to reach out to them to close a deal. In this way, our service works like a mortgage broker service – people may get different offers, pricing, and warranty information from different drop shippers trying to make a deal.
There are a number of ways you can optimize your auto parts drop shipping business. Here are a few ideas that may help:
● Cultivate new commercial customers. When an individual requests that a car part be shipped to a part shop, dealership, or garage, you have the opportunity to form a commercial relationship with that shop because you delivered a part that they installed. These are great contacts to reach out to every month through a postcard or email to see how that part worked out for them and figure out if they need any other parts.
● Keep a database. One of the best things you can do in auto parts sales is keep a database of all the contacts you’ve ever sold car parts to. If you have their email address, you can always send a monthly newsletter with deals, maintenance ideas, and other specials.
● Start a Facebook page. Social media presence is important for every modern business, but even more so for an online auto parts dealer. Post something weekly and start building an online audience for your brand.
● Sell extended warranties. Extended warranties could be an extension of the time coverage or a warranty on labor as well. You can upsell your customers while giving them an added peace of mind. Parts vendors on Amazon, eBay, and other online vendor sites tend to offer them. Why? Because they are profitable. Keep the money from these extended warranties in a separate account and let it build. When you do have to honor a warranty, the funds will be there and the customer will be taken care of.
We will supply you with two websites that have more than 200 million used auto parts recyclers that you can use to purchase parts from. Treat them well, as you will do business with them for years and they can be extremely helpful resources.
Some yards are easy to do business with, while others are not interested in drop shipping parts. Some get the part ready, clean it well, and ship it in a timely manner. Others, not so much. You will have to learn who you like to do business with and who is not a good fit.
The 1st step in selling parts online is getting the part sold to a customer. That’s right, you will actually sell the part before buying it or handling the deal as a locator. This process involves searching the parts databases for the right price, deciding which part you will sell to the customer (it’s best to pick 3 so you have backups), and then closing the deal to get it sold. Once the customer submits the order, you buy the part from the vendor, and when it’s ready to ship, you charge the customer’s card and get the part on its way to them.
When you broker an auto part, the part will first be sold to the customer, then you will purchase it from a vendor and get it delivered. This method gives you room to make the most profit from the parts you’re selling, but it’s always important to remember that when you sell an auto part, you are the company that stands behind the part that is being sold. It is easy to mark-up a brokered part 25% up to 300% depending on the part type and how hard it is to locate, and the market demand. If handled correctly, most transactions will end well and you will likely never hear from the customer again.
If you choose to handle the sale as a locator rather than a broker, you can sell the part based on what you have located in the database. You tell the customer they will have 2 charges; 1 to your locating company and the other to the supplier of the part. Your mark-up will not be as high as a locator, but the vendor handles the customer from there on out since they supplied the part and you just collected a locating fee. Virtually no risk at all.
It’s easy to stay organized when you do it from the start. When just beginning with auto parts sales, you can use a free online CRM or Google Sheets to help keep track of your customer base.
You should keep track of who each customer is, where the part is shipping to, and where the part was purchased from. Watch your checking account and credit card used for purchasing parts daily. This helps you track when a vendor has charged your card or issues you a refund, if needed.