Setting up a motor factors, advice?

toyotaguy

Lately I have been thinking of setting up a motor factors, I realize I have a lot of research to do and thought this might be a good source of information. Basically Im looking for any helpful hints/tips like where is best to source inventory etc.

I have a good knowledge of cars and of the car industry but would be new to this side of things so any help or opinions would be greatly appreciated.

Also is it a bad idea to start off now or is it feasable.

biko

Depends, are you locally close to other motor factors?
Start small and grow would be my advice. Is there a need for a factors locally? Can you bring anything "new"?

toyotaguy

The location I have found is right between a garage and a petrol station, its approx 10 minutes drive to the nearest motor factors, Im still looking into other locations as I wont be setting up just yet but that one is top of the list for now

Red Kev

Be nice to your customers, be helpful, don't be arrogant. when somebody is trying to explain a part that they don't know about, be patient and try to help them.

Word will spread that you're a decent bloke who helps ordinary Joe's and Josephines out, and you're not somebody who takes the piss, that you're not just someone who helps those in the trade. From this you will profit long term. Believe me.

Best of luck with it.

BTW, if the garage next door is any good, do a deal with them on oil changes, fitting bulbs etc. People like a "one-stop-shop" when it comes to fixing the car. if they don't offer this service think of doing it yourself. You get a good reputation.

toyotaguy

Thats what I was thinking with the one stop shop, I know the garage owner and I was in there before and i needed work done but he didnt have the part so i had to take the trip to town get the part i needed and bring it back, because the part needed to be ordered i had to make 2 trips of it whereas if there was a motorfactors i could have just ordered and paid and asked for it to be dropped over the next day.

What do you mean by a deal do you mean spend x amound and get money off for an oil change?

cabb8ge

toyotaguy wrote: »

--- whereas if there was a motorfactors i could have just ordered and paid and asked for it to be dropped over the next day.--

Good point, most motor factors have delivery service & representative on road. I work in factors as delivery driver some years ago. Most of total sales (70/80%) come from road not the counter.

Every day the representatives ring customers, so too other motor factors ring same customers, most stock same things, out of ordinary ordered and next day or two delivered. Not easy to get business from people who not deal with you, new factors have to get other factors business. Can you afford to give more discount?

When I work there I conclude not possible to make living from counter only, so start small not easy to do unless you have other income too.



To start I think you need lot of stock, van, at least one staff other than you and also need to offer credit to the trade customers of 1 month duration.

Red Kev

Do a dela with the garage. They buy the oil & filter with you, he does the change for a certain price.

E.G. I buy oil and a filter for €40 off you, if I spend over €40 the guy next door changes it for free. You give him a few bob for it on the side. Happy days for me as I don't have to climb under it and do it myself. (this is just an example, work the prices out yourself, maybe if I spned over €40 with you he changes the oil for a tenner, but you get the idea)

you send him customers. He sends you his. Works both ways.

toyotaguy

cabb8ge wrote: »

Good point, most motor factors have delivery service & representative on road. I work in factors as delivery driver some years ago. Most of total sales (70/80%) come from road not the counter.

Every day the representatives ring customers, so too other motor factors ring same customers, most stock same things, out of ordinary ordered and next day or two delivered. Not easy to get business from people who not deal with you, new factors have to get other factors business. Can you afford to give more discount?

When I work there I conclude not possible to make living from counter only, so start small not easy to do unless you have other income too.



To start I think you need lot of stock, van, at least one staff other than you and also need to offer credit to the trade customers of 1 month duration.

I hadnt even considered that to be honest i had hoped to set up and work there myself and that would be it so i might have to look more intoit

toyotaguy

Red Kev wrote: »

Do a dela with the garage. They buy the oil & filter with you, he does the change for a certain price.

E.G. I buy oil and a filter for €40 off you, if I spend over €40 the guy next door changes it for free. You give him a few bob for it on the side. Happy days for me as I don't have to climb under it and do it myself. (this is just an example, work the prices out yourself)

you send him customers. He sends you his. Works both ways.

That is definately something ill consider thanks for the advice

but43r

Have you done any sort of business plan or is it just something that you are researching at the moment?
You really do need a business plan for something like this. Initially you won't get any credit off your suppliers because you're new and you might have to give a month credit to your trade customers. This would mean very big bucks starting up unless you were carrying only a specific set of parts.

Also, what are other motor factors around like? Do they have a good relationship with their customers? If their customer service is horrific you might be able to lure their current customers over (if you have stock) but if their current customers are happy with the service then it might be more difficult.

toyotaguy

but43r wrote: »

Have you done any sort of business plan or is it just something that you are researching at the moment?
You really do need a business plan for something like this. Initially you won't get any credit off your suppliers because you're new and you might have to give a month credit to your trade customers. This would mean very big bucks starting up unless you were carrying only a specific set of parts.

Also, what are other motor factors around like? Do they have a good relationship with their customers? If their customer service is horrific you might be able to lure their current customers over (if you have stock) but if their current customers are happy with the service then it might be more difficult.

I have never heard anyone say anything good about the motor factors around here and my experience with them has never been great either one of them you would nearly have to draw him a picture and you still wont get the right part.

I dont have a business plan im just starting the research as I am possibly going to be coming into money and always wanted to work for myself. I have a lot of experience in retail but none in this line but as i have what I would consider a vast amount of interest and knowledge of cars I should be able to transfer my skills.

mickdw

Where I live in mayo, we had no factors within 50 min drive. Last year I good motor factors opened and he is understandably doing very well. He is an old hand though with another branch elsewhere so he was on the ball. Others who tried from scratch a few years back all folded as they carried little stock and didn't have the knowledge or connections to make it work price wise or in relation to speed of delivery of ordered part.

discodavie

I'm opening up one at the minute.

Other than the financial side of stocking up the shop you'll need good suppliers, if you can get good ones that will supply you.

You'll need a very good handle on your burn rate of cash.

I recommend that the most important thing you get in is the computer system , will save a fortune for you in timing.

You'll absolutely need a van and a good idea of how many lads are working in the area and if they would go to you.

Best of luck with it anyway

MidlandsM

To be honest, the best thing you can do is go and work in one for a year or so.

toyotaguy

MidlandsM wrote: »

To be honest, the best thing you can do is go and work in one for a year or so.

Ihave thought of that alright, I applied to a few and am waiting to hear back. I have friends who have worked in them who can give me advice also but you cant beat hands on experience

MidlandsM

toyotaguy wrote: »

Ihave thought of that alright, I applied to a few and am waiting to hear back. I have friends who have worked in them who can give me advice also but you cant beat hands on experience

so true, get into one, make it your priority in 2014 and when you do, work like a trojan, and experience all parts of the biz, stock ordering, stock control, delivery, phones, cash handling, the lot.....it's a must. All successfull motor factor owners worked in one before...it's like the old joke....

"Did you hear about the dead barman ....he died a publican"

NuckingFacker

toyotaguy wrote: »

Ihave thought of that alright, I applied to a few and am waiting to hear back. I have friends who have worked in them who can give me advice also but you cant beat hands on experience

As a cynical, battle hardened git, if you're coming into a bit of money and invest it into a motor-factor business, you'll be working the old adage of the guy who had the money gets the experience and the guy who has the experience gets the money. You need to be; A.very deep pocketed and B. very well connected into the trade to make a living and stay going.

I'd give you the same advice i'd give to anyone considering opening a new business - go see someone already doing it, pick a successful one. Then ask if you can do it the same or better. get in your car and drive up to Bradshaws in Newbridge for example. Then consider the unseen competition - the likes of Micksgarage, Eurocarparts, GSF. They carry stock levels into the many millions and are expanding. They're your competition. Can you compete? Do you have at the very least a million or two to invest or do you have backers that will invest capital to that level? If you don't, you're going to be struggling at best and gone in a year or three most likly, having busted your as5 off for little or no return.

Have a look at your outgoings - how much you need to make to eat, drive, pay rent, rates, esb, insurances, wages, prsi, your tax bill, etc, then calculate how much you need to bring in to meet those - profit, not turnover. That's a lot of filters and belts to be shifting before you make a single euro.

You're picking a tough business - margins are tight, volumes and deadlines are tough and you've a world of competition regardless of how close your nearest Factor is. I deal with several of the biggest car-parts distributors in the country daily, and it can be a tight business, regardless of scale. Go have a look at PR Reilly and ask yourself could you compete?

I think you need to do an awful lot of research before you dive in - or you will not make a living and will not last. Have a long, hard, realistic think about it, please. If you do decide to go ahead, the absolute best of luck and I hope you make a fortune! Just go in with your eyes open.

vibe666

not to be cynical, but it's a complicated and difficult business with lots of room for things to go wrong and if you're on an internet forum asking for advice, you're probably looking at the wrong business.

Old diesel

MidlandsM wrote: »

To be honest, the best thing you can do is go and work in one for a year or so.

Absolutely agree with this - even things like getting to know all the different suppliers who supply all the different bits and pieces.

in all honesty - from what ive seen of it - its a very tough business to make work and be profitable.

And (from seeing others do it) been on the phone and dealing with fellas all day would absolutely wreck your head.

Don't know how a one man operation could keep it all going - and if your employing staff - that quickly eats into profit (imo).

I am not saying don't do it - but its definitely something you need to think hard about - and MidlandsMs advice to work in one for a while is good advice.

The experience will be useful in so many ways I think.

toyotaguy

vibe666 wrote: »

not to be cynical, but it's a complicated and difficult business with lots of room for things to go wrong and if you're on an internet forum asking for advice, you're probably looking at the wrong business.

I appreciate that but the way I look at it is you cant be too prepared or gather too much information on anything. I like to think i would have enough information to set one up but by researching and even asking advice on a forum it allows me to see a problem that could arise and plan for it.