Breaker Breaker

Big Nasty

Hey lads,

Mechanic friend of mine who is ex-BMW and specialises in their repair has always had a few crashed / heavily damaged cars around for spares. Never made any pretence of replacing bits and bobs with used as opposed to new. He's knida known as a 'go to guy' for reasonable yet good repair. I've had 6 different BMW's over the years and a couple Audis and he's always looked after me real well. I would term him as more of an old school 'fixer' as opposed to a 'fitter', yet he has all the relevant diagnostic equipment and works on anything out of warranty.

Of late, with so many good mechanics out of work, he has found that even his most reasonable quotes are being undercut by out of work mechanics doing repairs in their driveways. Consequentially he has found a drop off in his turnover and is investagating different avenues for profit. Going forward he reckons there is good money in getting in to breaking at a professional level, i.e. full waste permit, good accesible site in maybe the Kildare area, website, etc. He plans to specialise in German cars, i.e. BMW, VW, Seat, Skoda, Audi & Mercedes as these models have all been strong sellers during the better times yet people are looking for cheaper replacement parts now as opposed to going to main dealers. Says he should be able to maintain approx 400% mark up on the stock he buys.

What do you guys think, especially those in the trade? is the market saturated for this already? Are waste issues going to cripple him? Is it economically viable?

I'm half thinking of investing in this with him so would be very interested in your opinion!

kasper

if you have the space and facilities cant see why not ,kelly in kilcock is doing a lot of business and is very well set up would he be able to compete with him ? you would probably need to do motor factor stuff as well , timing belt kits water pumps gasket sets as well as other stock

unkel

I can see it work. Scrapyards were not big business during the boom. Only the bottom end of cars would ever get second hand parts fitted. This percentage is likely to go up more now cars will be kept on the road longer and people no longer fork out what ever the main dealer tells them the price of parts is.

Ricardo G

Yes would defo work however on a side note i still find that parts in the UK are hell of a lot cheaper to buy and post direct to your door than even a breakers !!

Big Nasty

I spent a bit of time working out a forecast and after investment, i.e. opening stock, few months rent in advance, set up equipment and then the usual running costs during the year to include waste charges, etc. I reckon you would need to be turning near 450k a year to break even. (Forescast done on 'worst case scenario' as they should be - anything else is a bonus!)

Taking an average operating year at 250 days that would mean you would need to be turning over €2k a day at a 400% mark up!

Possible?

johnplayerblue

Established breakers have a license to print money. Boom or no Boom!

Thing is, The prices have gone up 30/40% in the last year 18mths no matter what the part is.

In a lot of cases its a mere 30 €40 in difference from buying new. This is what I've experienced. Not a game for the faint hearted and good idea as it is I'd steer clear as its a market thats very well sewn up.

Also, as the previous poster said about buying on line, the last four parts I needed were cheaper to buy NEW from the UK and thats with shipping than they were from either of my two local very large breakers.

Andrew33

MCMLXXV wrote: »

Hey lads,

Mechanic friend of mine who is ex-BMW and specialises in their repair has always had a few crashed / heavily damaged cars around for spares. Never made any pretence of replacing bits and bobs with used as opposed to new. He's knida known as a 'go to guy' for reasonable yet good repair. I've had 6 different BMW's over the years and a couple Audis and he's always looked after me real well. I would term him as more of an old school 'fixer' as opposed to a 'fitter', yet he has all the relevant diagnostic equipment and works on anything out of warranty.

Of late, with so many good mechanics out of work, he has found that even his most reasonable quotes are being undercut by out of work mechanics doing repairs in their driveways. Consequentially he has found a drop off in his turnover and is investagating different avenues for profit. Going forward he reckons there is good money in getting in to breaking at a professional level, i.e. full waste permit, good accesible site in maybe the Kildare area, website, etc. He plans to specialise in German cars, i.e. BMW, VW, Seat, Skoda, Audi & Mercedes as these models have all been strong sellers during the better times yet people are looking for cheaper replacement parts now as opposed to going to main dealers. Says he should be able to maintain approx 400% mark up on the stock he buys.

What do you guys think, especially those in the trade? is the market saturated for this already? Are waste issues going to cripple him? Is it economically viable?

I'm half thinking of investing in this with him so would be very interested in your opinion!

Since when have SEAT & SKODA become German? they are Spanish & Czech Republic respectively, I know they're built out of VW's parts bin but at least pay them (and their owners) the respect of knowing where they come from:) Best of luck with the venture.

kasper

the best of luck with it , i am sure it will get the odd mention here

unkel

MCMLXXV wrote: »

I spent a bit of time working out a forecast

Here's a novelty idea: why don't you include a garage in your scrapyard. Your man could offer a complete solution: source the part and fit it at a very competitive price, he might employ other mechanics if it takes off.

Big Nasty

Andrew33 wrote: »

Since when have SEAT & SKODA become German? they are Spanish & Czech Republic respectively, I know they're built out of VW's parts bin but at least pay them (and their owners) the respect of knowing where they come from:) Best of luck with the venture.

Essentially they are German, just as Lamborghini & Bugatti are these days. Anyhow, much as with a Murcielago and an S8 most of the parts are interchangeable. Similarly parts from a Golf, A3, Fabia and Ibiza have been interchangeable for years.

peasant

MCMLXXV wrote: »

Taking an average operating year at 250 days that would mean you would need to be turning over €2k a day at a 400% mark up!

Possible?

I wouldn't think so ...not with footfall customers.
Youd have to sell nationwide, possibly international over the internet to increase your market size. And then of course cataloging and sorting becomes a major issue as will "warranty"

unkels garage idea sounds more feasible ...at least you wouldn't be getting parts back that some numpty ordered wrong

Big Nasty

unkel wrote: »

Here's a novelty idea: why don't you include a garage in your scrapyard. Your man could offer a complete solution: source the part and fit it at a very competitive price, he might employ other mechanics if it takes off.

Actually have that on my list!

I.e. - buy part, have it fitted or buy part, e.g. bumper, etc, have it sprayed and fitted. One stop shop!

Big Nasty

peasant wrote: »

I wouldn't think so ...not with footfall customers.
Youd have to sell nationwide, possibly international over the internet to increase your market size. And then of course cataloging and sorting becomes a major issue as will "warranty"

unkels garage idea sounds more feasible ...at least you wouldn't be getting parts back that some numpty ordered wrong

Could never expect that turnover with footfall customers. Idea would be to start with basic advertising to include Done Deal, Buy & Sell, Facebook and Twitter pages with updates when new vehicles come in. Then move on to website, search engine optimisation, etc. Online catalogue would be at least 2 years down the road.

unkel

MCMLXXV wrote: »

buy part, have it fitted or buy part, e.g. bumper, etc, have it sprayed and fitted. One stop shop!

Exactly! Skip the usual middle man, have low prices but yet a higher margin.

kasper

go for it man

Big Nasty

unkel wrote: »

Exactly! Skip the usual middle man, have low prices but yet a higher margin.

This is part of the plan!

Y'all think there's a good market for it out there? If I take part I will be giving up a half-decent job with dependable income, investing €20k of my own money and I'm totally ****ed if it don't work! Nothing ventured, nothing gained but a big enough gamble all the same!

johnplayerblue

Your too late and WAAAAY under financed to the tune of a couple 100k+

Easy to say "Go for it man" but you are too late!

Just one persons opinion and you know what they say about them.

Big Nasty

johnplayerblue wrote: »

Your too late and WAAAAY under financed to the tune of about 100k+

Easy to say "Go for it man" but you are too late!

Just one persons opinion and you know what they say about them.

I appreciate your advice but not so sure I agree. The total investment will be cq €60k which would mean maybe €15k rent up front, €15k on opening stock and €15k on set up costs leaving another €15k for cash flow.

My main concerns are if the market is already saturated. If not I feel my own marketing skills are strong enough to make a go of it.

bmstuff

Yeah high potential I would say. So many people are getting aware they can actually get perfectly working second hand parts thus more and more people are looking to save money.

The thing that is lacking in this country is a breaker that actually lists all the parts he has in stock on a website so you can browse around.
Same thing as Fab Direct would be nice. Otherwise he would spend the day on the phone...

Ok there is the partfinder.ie thing, which is a nice idea, but it needs to pick up...

In the meant time, I know AC Car Sales is looking for a new mechanic...A good one of course, otherwise you won't last long.

kasper

where abouts would it be situated or is it too early to say

bmstuff

MCMLXXV wrote: »

I appreciate your advice but not so sure I agree. The total investment will be cq €60k which would mean maybe €15k rent up front, €15k on opening stock and €15k on set up costs leaving another €15k for cash flow.

My main concerns are if the market is already saturated. If not I feel my own marketing skills are strong enough to make a go of it.

15k up front to rent a place? No, plenty of places today that work on flexible contract, you can rent on a monthly basis, and even better, many will rent you the warehouse without months in advance, only 2 usually and you walk in.
Check Daft.ie, plenty of empty warehouses with similar terms.

L1011

MCMLXXV wrote: »

Actually have that on my list!

I.e. - buy part, have it fitted or buy part, e.g. bumper, etc, have it sprayed and fitted. One stop shop!

The breakers yard in Enfield has a spray booth in it so I imagine they're doing this. Might want to head further south in Kildare in that case!

kasper

the breakers in enfield is very badly organised where as the one in kilcock is the complete opposite in my opinion

johnplayerblue

Well if it was me the very first thing I would question is Stock.

You are going to need a very steady flow of stock and if your going to specialize then even more so.

I'm no expert but if I had to guess I'd say your going to need at least 10 scraped/crashed cars a week coming through your gates, at the very least.

That is why I said the market is sewn up, also, you can't on the one hand say people are keeping there cars on the road longer and at the same time rely on people scrapping there cars in order for you to make ends meat. Take Wilsons for example! They can't get there hands on enough 2nd had cars no matter how old.

The breakers I use have at least a 10 acre site with about 20 people working for them and only about 25 miles from Kildare and another breaker half the size again 2mils from them. How would\could you compete with that?

Where are you going to get your stock, I guess is what I'm asking?

L1011

kasper wrote: »

the breakers in enfield is very badly organised where as the one in kilcock is the complete opposite in my opinion

That is also very, very true. Kilcock were able to direct me to an array of Fiats, none sitting on top of each other, all accessible; Enfield had to send someone with me to make sure a car didn't fall on me and find the car I was looking for in the first place!

Big Nasty

johnplayerblue wrote: »

Well if it was me the very first thing I would question is Stock.

You are going to need a very steady flow of stock and if your going to specialize then even more so.

I'm no expert but if I had to guess I'd say your going to need at least 10 scraped/crashed cars a week coming through your gates, at the very least.

That is why I said the market is sewn up. You can't on the one hand say people are keeping there cars on the road longer and at the same time rely on people scrapping there cars in order for you to make ends meat. Take Wilsons for example! They can't get there hands on enough 2nd had cars no matter how old.

The breakers I use have at least a 10 acre site with about 20 people working for them and only about 25 miles from Kildare and another breaker half the size again 2mils from them. How would you compete with that?

Where you you get your stock I guess is what I'm asking?

I don't see getting stock being a problem, getting stock at the right price is another story!

Again, it's early days but my friend has the knowledge from a purchasing point of view and my background is marketing. I don't see any of the current sites capitalising on that!

Big Nasty

MYOB wrote: »

That is also very, very true. Kilcock were able to direct me to an array of Fiats, none sitting on top of each other, all accessible; Enfield had to send someone with me to make sure a car didn't fall on me and find the car I was looking for in the first place!

I've no intention of letting people walk in to a warzone, eventually I would like a catalogue website but that's a few years down the road. In the interm the plan is to post each new vehicle for breaking on facebook and twitter.

So again, all constructive criticism aside, do you think it's economically viable given the current compeition?

junkyarddog

Opening a breakers is not as easy as you may think,
you will first have to get planning permission from the local authority,
and belive me they don't like scrapyards.
You will need an oil interceptor tank fitted into the ground(huge amount of cash)with all your drains directed into it,so all rainwater,spillages ect go into the tank and not down an ordinary drain.
you will need a secure bunded aera(undercover)in to which you will need separate tanks for the waste engine oil,brake fluid,anti freeze/coolant,
plus bins for waste oil filters,and scrap batteries.
An aera of the facility will have to given over to the storage of undepolluted vehicles.
Plus you have to keep records of all the movements of waste to and from the yard,and the waste permit numbers of all the firms that remove waste from the premises,tyres can be a real problem,and are expesive to have removed for recycling.
That is only the basics of opening a yard,the local authoritys have loads of conditions to which you will have to comply with before they will be satisfied(which they never are the conditions are constantly changing)
Good luck to you if you decide to go ahead,
but don't underestimate the amount of time effort and money that you will have to put in before you can buy some stock and open the gates,
don't be temted to open up without a waste permit,
you will be shut down and face a hefty fine.

johnplayerblue

MCMLXXV wrote: »

I don't see getting stock being a problem, getting stock at the right price is another story!

Again, it's early days but my friend has the knowledge from a purchasing point of view and my background is marketing. I don't see any of the current sites capitalising on that!

No you have it wrong, very wrong. You will get a "good" write off for maybe €400/€500 but with the potential of anything up to €5k before it's turned into tin cans.

Do you know how many 50 60 100 €s are in a write off?

Price is not an issue, sourcing is the name of the game!

Then take what the previous poster has said! Surely your not going to spend untold thousands on somebody else's property, don't think they would allow it to start with, hence my figure of a couple 100k+

kasper

ganley in mullingar beside the train station was refused planning permission to move to a green grass site just recently , so as a poster said earlier planning permission is a big obstacle ,dont let it put you off but go in with your two eyes wide open

unkel

MCMLXXV wrote: »

If I take part I will be giving up a half-decent job with dependable income, investing €20k of my own money and I'm totally ****ed if it don't work!

Investing (risking) your savings is one thing. Giving up your job and being ruined if it doesn't work out is another. You need to find a way to keep your job while starting your business. At least for the very start of the business.

Andrew33

MCMLXXV wrote: »

Hey lads,

Mechanic friend of mine who is ex-BMW and specialises in their repair has always had a few crashed / heavily damaged cars around for spares. Never made any pretence of replacing bits and bobs with used as opposed to new. He's knida known as a 'go to guy' for reasonable yet good repair. I've had 6 different BMW's over the years and a couple Audis and he's always looked after me real well. I would term him as more of an old school 'fixer' as opposed to a 'fitter', yet he has all the relevant diagnostic equipment and works on anything out of warranty.

Of late, with so many good mechanics out of work, he has found that even his most reasonable quotes are being undercut by out of work mechanics doing repairs in their driveways. Consequentially he has found a drop off in his turnover and is investagating different avenues for profit. Going forward he reckons there is good money in getting in to breaking at a professional level, i.e. full waste permit, good accesible site in maybe the Kildare area, website, etc. He plans to specialise in German cars, i.e. BMW, VW, Seat, Skoda, Audi & Mercedes as these models have all been strong sellers during the better times yet people are looking for cheaper replacement parts now as opposed to going to main dealers. Says he should be able to maintain approx 400% mark up on the stock he buys.

What do you guys think, especially those in the trade? is the market saturated for this already? Are waste issues going to cripple him? Is it economically viable?

I'm half thinking of investing in this with him so would be very interested in your opinion!

Ok, an easy one for you to start off with, I need a 6 speed DSG 'box for an Octavia 1.9Tdi, same box has been fitted to a myriad of VW products, can you source it?

MCMLXXV

MCMLXXV wrote: »

So again, all constructive criticism aside, do you think it's economically viable given the current compeition?

Not in Kildare, you won't be able to compete with the facility in Kilcock, no offense to the marketing experience but you're severely overvalueing what that brings to the party.

MidlandsM

To do this, 250+k investment.

Planning required.
Licences/permits required.
After that, major ongoing regulation from Local CC and enviromental dept, epa etc
High tax and vat enforcement (they can see everything you break)
Labour intensive
Equipment intensive
Training health and safety intensive
Insurance loading will be very heavy
Credit lines for trade customers - nightmare and HAS to be preffered to these guys.
Returns - fecking messy.
Contacts in the insurance co's to get salvage - takes time to build.

Nightmare tbh.

Most of the guys in this game are what I'd call "Heritage Operators", who started their business's small in the old days when they opened on land they had (no rent overheads),there was no regulation, no permits,cash was king and disguisable etc etc .......it gave them a good foundation to build to the operators they are now.
Setting up now from a standing start is a very different animal. And using twitter,facebook and all that means SHAG all to many - alot of the consumers of spare parts from the existing breakers are lucky to get the sunday papers let alone surf the net to see if the part is available, they'll just do what the always did, call their trade buddy and see if its there - end of!

Think it all thru' very carefully befire leaving your bread and butter.
I would.

Big Nasty

Thanks for all the advice lads.

By the way this would be a 'dry' site with all stock indoors. I.e. car comes in, is stripped, parts shelved and shell and fluids immediately scrapped / disposed of properly. I.e. no stock outside, no drains necessary and only a waste permit not a waste license.

Public liability would not be huge as the customer would get as far as the reception area only at the front of the site, makes enquiry and staff go get the already stripped part.

In relation to location any high street will have a selection of clothes and food stores so I don't see competition in the area as being a problem. The approach is slightly different to your normal scrap yard. The reason we're considering Kildare is accessibilty nationwide. We would also offer a delivery service.

Big Nasty

Hey Midlands (et al) - seeing as you thanked the above post do you approve of this method, i.e. interior site?

Anyone else with any info / constructive criticism?

MidlandsM

Hi,

I thanked ya out of courtesy for put up a conclusive post as many thread originators don't bother.
Re; the approval of your method, if you can minimise the regulation you require, that can only be a good thing to keep costs inline.
I still say you need to infultrate the trade, the buyers who always get their stuff from the same crowd they know - but it can be done.
I've actually looked closely at this kind of business before. Its a nice earner.

Voodoomelon

I've worked in retail and online retail for years and I reckon the key to your business becoming a success is to invest heavily in the online side of things.

It takes a LOT of work though, possibly more than the physical side of things to keep the website constantly up to date and to process orders in a speedy timeframe, but having electronic access to your inventory would be key to seperating yourselves from the others.

You also open yourself up to the entire country, the majority of people outside Dublin live nowhere near a breakers yard and having a website with a full inventory available to them is highly attractive.

Thats the route I would go down, never limit yourself to walk in trade when you can multiply your trade many times over, whislt also keeping your overheads to a minimum.

Voodoomelon

MidlandsM wrote: »

Most of the guys in this game are what I'd call "Heritage Operators", who started their business's small in the old days when they opened on land they had (no rent overheads),there was no regulation, no permits,cash was king and disguisable etc etc .......it gave them a good foundation to build to the operators they are now.
Setting up now from a standing start is a very different animal. And using twitter,facebook and all that means SHAG all to many - alot of the consumers of spare parts from the existing breakers are lucky to get the sunday papers let alone surf the net to see if the part is available, they'll just do what the always did, call their trade buddy and see if its there - end of!

Think it all thru' very carefully befire leaving your bread and butter.
I would.

All very good info, but its more than a mistake to avoid the online potential of any business, even if it is used car parts. An online store provides instant access to the breakers entire parts catalogue without having to lift the phone, whilst also giving the customer the ability to order several parts at once as they can see them listed in front of them.

This also increases sales as customers on a regular basis order additional parts/products when they are placing a single order.

kasper

i think it is a great idea but like anything like this the location has to be spot on ,also it might be self contained, but you are going to have a lot of heavy transport delivering and collecting what is baled . best of luck with it .

MidlandsM

Voodoomelon wrote: »

All very good info, but its more than a mistake to avoid the online potential

...so you keep saying. I'm not advocating avoiding it, more recommend to concentrate on the local trade business to get the bread and butter business in. Develop from there.

Voodoomelon

I don't see why you have to test the local area to see how well it would perform on a national level, the two aren't related. I'd do both without a doubt.

MidlandsM

Voodoomelon wrote: »

I don't see why you have to test the local area to see how well it would perform on a national level, the two aren't related. I'd do both without a doubt.

I never said not to.

Big Nasty

Thanks lads!

I'm still at the feasibility stage but the plan would be to go national hence not too worried about local competition.

Design and SEO of a catalogue website could cost anything up to €100k to do properly so the plan for year one would be to advertise on buy & sell and done deal and also set up a basic website with an email enquiry form (which would be advertised on b&s and dd). Any business is going to need constant investment in terms of equipment and technology and I would hope to be able to develop a catalogue website in year two and go all out on SEO in year three.

Voodoomelon

MCMLXXV wrote: »

Design and SEO of a catalogue website could cost anything up to €100k to do

Dear lord, where'd you get that quote?

Big Nasty

Voodoomelon wrote: »

Dear lord, where'd you get that quote?

Proper catalogue website would be €20k no bother.

SEO and ongoing Google Adwords campaign in order to ensure that anyone who searches for any car part will find the site will cost lots and lots and lots! There's no bother spending €80k on this sort of thing and it is better than advertising on prime time TV as it has a longterm effect not just a spike while ads are run.

Ideally I would like a catalogue similar in style to this:
www.summitracing.com

Or this:
http://npd.dirxion.com/WebProject.asp?BookCode=bir09flx&from=2#

Voodoomelon

I can make you one based upon the Joomla platform with Virtue mart shopping cart for €5k. .
One example of many www.airsofteire.com.

Click accessories on the left to see how categories can be broken down.

Big Nasty

Voodoomelon wrote: »

I can make you one based upon the Joomla platform with Virtue mart shopping cart for €5k. .
One example of many www.airsofteire.com.

Click accessories on the left to see how categories can be broken down.

Coolio - but if you wanted something really slick that sort of money can be spent no problem. I like the idea of the interactive magazine type catalogue and it would create more clicks so you can look for relative advertisers on the site. Maybe that's going a bit 'mad' but it's something I would like to do! Then again it would be flash based and google doesn't pick that up like html.

Voodoomelon

Oh absolutely. But all you need is something clean, simple, uncluttered and scalable. Something that you can update yourself and don't have to pay someone else to do.

There is no need for massive cash when you could probably teach yourself how to do it in a week with freeware.

I wouldn't spend anything over 5-10k on a site.

Big Nasty

Voodoomelon wrote: »

Oh absolutely. But all you need is something clean, simple, uncluttered and scalable. Something that you can update yourself and don't have to pay someone else to do.

There is no need for massive cash when you could probably teach yourself how to do it in a week with freeware.

I wouldn't spend anything over 5-10k on a site.

Sound Voodoo, and if it goes ahead I will be in contact!

Have yet to see that 7er of yours yet!

Voodoomelon

Rarely leaves Dundalk/Blackrock area to be honest, might be about Dublin this Saturday though! How are you finding yours?