Friday, December 16, 2011

How mush does it cost to open a aftermarket car parts store?

A car shop that sells only aftermarket car parts.|||Mush?|||No one would give you a loan right now,so if you have to ask, you wont be able to|||I suggest you forget that unless you have the money and credit you will need to invest in a franchise. The big chain franchise parts stores are just too much competition for a small independent parts store to make a profit. I have a friend who wants to sell his parts store and retire but every prospective buyer who has applied for financing (I am aware of at least 3) has been turned down. His father started the business shortly after WW-II and my friend took over the business in 1978 after working in the store for about 12 years with his father. He has 2 employees and he nets almost $90,000 a year out of a little more than $400,000 gross sales, which is fairly impressive to someone wanting to buy the business, especially a turnkey business that is for sale lock, stock and barrel for a lot less than its annual gross sales. He is asking $315,000 and that includes the real estate plus $160,000 in parts and accessories inventory and his machine shop equipment and tools for turning brake rotors, drums, and flywheels. But the problem with financing is that the bank looks back to assess future profits and risk and they get the heebie jeebies when they see that his gross sales and net profits has declined every year for about 10 years. AutoZone opened a store about 6 or 7 miles away on the edge of the next town about 10 years ago and that hurt him bad, especially the first 2 or 3 years after the AutoZone opened. I think you would be well advised to consider the competition from the big franchise parts stores and forget about the parts business unless you have the big bucks and stellar credit you will need to invest in a franchise.

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