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How to Start an Online Auto Parts Business
According to IBISWorld, the market for online auto parts and accessories has grown by 6.2% since 2018. The demand for online shops that sell auto parts is sky-high, which is why this is an ideal time to launch your own online shop.
Even though online shopping is on the rise, you’ll need to prepare for the challenges ahead to make your shop a success. Thankfully, this guide will go through the steps you’ll need to take if you want to sell auto parts online.
Step One: Decide On the Products You Want to Sell
While you may want to offer customers a diverse selection of products, you won’t be able to carry every product that’s on the market. Customers buy all kinds of auto parts online, and you’ll have to determine what kinds of products you want to focus on.
There are plenty of buyers for auto parts, but your online shop will also be facing some stiff competition. Focusing on a specific type of product or customer could be a way to make your shop stand out. For example, you could create a shop that exclusively carries parts for trucks or cater to sports car enthusiasts.
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Another option is to focus entirely on a specific category of auto parts. External parts, like side mirrors and windshield wipers, are easy to install and are usually top-sellers in online stores. Parts that require regular replacement, such as air or oil filters, also tend to sell very well.
Some parts, like brake pads or catalytic convertors, should only be installed by trained mechanics. The market for these kinds of parts can be limited, but you can broaden your customer base by selling parts directly to auto shops. Explore your options and consider what you’d like your shop to offer.
Step Two: Find a Source for Parts
Once you’ve decided on the parts you’ll be selling, you’ll need to find a way to obtain those parts. Typically, online auto parts stores get parts from distributors that work directly with auto parts manufacturers. It’s common for distributors to offer tens of thousands of products, which means you’ll have no shortage of options.
If you choose to purchase parts directly from distributors, you’ll have to find a way to store those parts, manage your inventory, and ship them out to customers. Thankfully, you can outsource these steps if you work with a distributor that offers dropshipping services.
Distributors that offer dropshipping will store and ship products on your behalf. Once you sign a contract with a drop shipper, you can forward customer orders directly to them. Dropshipping is an excellent way to reduce the costs of launching an online parts business.
Step Three: Choose an E-commerce Platform
Building an online store used to be a complicated process. However, there are now e-commerce platforms that provide you with all the tools you need to build an online business. In addition to giving you an online storefront, eCommerce platforms can give you access to inventory management tools, customer relationship management software, and more.
There is a range of eCommerce platforms to choose from, and the best option will ultimately come down to your needs and personal preferences. It’s best to look for a reliable, well-established platform that offers a variety of tools and features, including security and SEO features.
Other factors to take into consideration include service costs, bandwidth, and most importantly, scalability. If your online auto parts business is successful, you’ll need to grow your store quickly. The eCommerce platform you use should be able to grow along with you.
Step Four: Find a Fitment Data Tool
Fitment data is information that specifies whether auto parts and accessories are compatible with certain vehicles. When an auto parts site has fitment data tools, it’s easier for shoppers to find parts that meet their needs.
People are often reluctant to purchase auto parts when they have questions about compatibility. If consumers can’t access fitment data, you may also have a higher return rate.
Fitment data tools can boost sales and give customers a better experience, which is why they’re a worthwhile investment for any business that sells auto parts online. Giving consumers access to fitment data will allow them to shop with confidence.
Step Five: Establish Your Business
Before you launch your website, you’ll need to go through steps to make your business a legitimate one. To start, you’ll need to obtain an Employer Identification Number (EIN). An EIN number is essentially a Social Security Number for your business and will allow you to pay taxes. You can request an EIN by completing a free application on the IRS website.
In some locations, you may also be required to register your business with city or county authorities. Look into the regulations for online businesses in your area so that you can be sure your business is fully compliant.
Step Six: Create a Marketing Strategy
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Once your shop is live, you can’t just wait for customers to start rolling in. To attract customers, you’ll need to use marketing techniques that will bring people to your website. Pay-per-click (PPC) ads campaigns can be expensive, but they’re one of the fastest ways to boost the traffic of a newly launched website.
Search Engine Optimization (SEO) is an essential marketing tool for any business with an online platform. When your site has strong SEO, you’ll appear near the top of search results for relevant searches, which can drive more organic traffic to your site. Content that features keywords, like blog posts and optimized landing pages, can be a great SEO strategy. You can learn more about SEO for the automotive industry from Automotive-Marketing.
Video marketing can also be a great way to drive traffic to an auto parts business. If you create videos that show people how to install and replace auto parts, you can boost the profile of your business and win the trust of potential customers.
The online parts market is bigger than it ever has been, and it’s only going to get bigger from here on out. Hedges & Company predicts that the online auto parts market will grow by nearly 9% between now and 2025. Take advantage of these opportunities and follow these steps so that you can start your own online auto parts business.