Another Different Way to Make Money in the Parts Business
Something that I have seen on a few occasions is people opening a store with the intent to sell the store once they have turned it into a profitable business. Essentially they are banking on their superior business skills to allow them to create a thriving business where many others will fail. Of course, some of the success of these ventures came from the real estate boom over the last several years. However, they study the area where they are going to build their business and do their homework in order to find a good location at an excellent price. An important part of the plan is to have sufficient money to buy the land and building for their needs. That fixes a major part of the cost to do business even before they open their front door. Next they work on containing the daily costs to do business. Their buying decisions for the products that they sell are based on quality and price not on convenience. They may buy from as many as a hundred or more suppliers. They work hard to keep their expenses at a minimum. They work with a minimum number of employees, they have a minimum number of phone lines and cell phones, and they keep their Store POS System cost to a minimum. You name it and they spend the minimum amount that they need. They are usually knowledgeable in the business that they plan to open. In these days most auto parts stores are struggling to survive. However, I have seen a person with no experience in the auto parts business open an auto parts store and turn it into a money making business. He paid good wages to hire people with experience in the parts business to teach him the business. Most important, he knew how to run a business. I hate to say it but it seems clear that in the parts business, knowledge of the parts business is not nearly as important as management skills.
Labels: containing costs, Parts store, Real estate, Store POS System
Different Ways to Make Money in the Parts Business
If you are an independent retailer selling mass produced items such as many types of light bulbs, your competition is mass retailers. Mass retailers are going to win that competition every day of the week. Their cost for product is way below yours, their employees need minimal training and get minimum wages, and their store hours are much longer than yours. Time and again I have seen independent retailers spot a niche and make a good profit filling a niche. For example, suppose that there is an item that only one person in 10,000 will need in a year. A knowledgeable retailer talking with a customer can determine the need for that item and a mass retailer doesn't even want to go there. In that situation the independent retailer might stock the item and sell it for 10 times what he paid for it and the customer is happy to have it. If you do this enough times, you have a business with no competitors. Equally important, your customer will immediately think of you when they need another rare item. A similar business is ordering specialty items for customers. It is a labor intensive business. You must develop a fool proof routine on your Store POS System for tracking deposits, tracking the special orders, contacting customers and returning those items ordered by mistake. Over the years a retailer will learn where to buy those hard to find items. However, even so a retailer has to be willing to search for those odd items that customers sometimes need.
Labels: Independent retailer, mass retailers, niche market, Store POS System
Problems with Electric Fuel Pumps
A knowledgeable gentleman that works for a major automotive parts manufacturer told me the other day that his employer loses tens of millions of dollars per year because of new fuel pumps that are returned as defective and they are not defective. I know from personal experience that this is a problem. A local mechanic charged me $1200 in parts and labor and was not able to fix what turned out to be a fuel problem. Another mechanic chased the problem down to either a corroded connection or a relay in the fuel pump electrical system. He cleaned the corroded connection and replaced the relay and it has been running perfectly since then. When we on site working on Store POS Systems, we look for ideas to help other customers. The other day I saw a fuel pump tester in a parts store. It was quite a gadget. It had a pressure regulator, a battery and connectors for the fuel input and output of the pump. You merely set the pressure regulator for the operating pressure for the vehicle, hook the battery to the fuel pump, hook the hose connections to the fuel pump and start the fuel pump running. Assuming that the fuel pump is good it will pump a specified volume of fuel in a specified time. In reality it will pump a lot of fuel or it won't. At this time there is no doubt as to whether the fuel pump is defective or not. Needless to say this parts store does not send back any fuel pumps unless they are really defective. They also save the mechanics a lot of labor.
If the fuel pump is not the problem, it requires a lot of labor to chase down the problem in the fuel pump electrical system. You have to drop the tank and make several voltage measurements on the fuel pump electrical system with the fuel pump under full load. You are usually looking for a measurable voltage across some part of the electrical system. In reality the only measurable voltage should be across the fuel pump itself.
Labels: Electric Fuel Pumps, Fuel pump electrical system, Store POS System
