Beginner’s Guide on Starting a Car Parts Business in the United Kingdom

Starting a Car Parts Business in the United Kingdom It is not practical to buy a new car just because some parts of it are damaged or not functioning. This is why there is demand from car owners who seek to purchase certain auto parts only so their vehicles will be good as new. These include audio or video devices, low voltage electrical supply system, gauges and meters, and even cameras. As such, starting a car parts business may actually be a great idea for you.

Let us provide you guide to company registration in the UK and other pointers to consider when starting a car parts business. This article will help you navigate the basics of the industry and may even give you the edge you need.


Know Your Basics in the Industry

When starting a car parts business, please note you may be providing services for retail customers or trade clients. According to recent trends, DIY servicing has been on the downtrend for the car accessory trade. Why? Cars have become more reliable, but customers still find it challenging to fix them when something goes wrong. What happened as a result of this?

Sales of servicing and repair parts are focused more on the motor trade now. Companies highlight the retail of motoring accessories, including in-car entertainment and security systems, roof-racks, and car care products, among others. Still, the demand for customized car bodies is still robust. The young drivers primarily seek the following car accessories which you can provide:

  • body kits
  • alloy wheels
  • exhaust back boxes
  • driving lights
  • clear indicator lenses

With this, you may consider targeting this market and cornering this segment in your area. You can test the demand and stock up your inventory on such when you see the sales going up. And that is the goal after all: to make profits from your investment.


Study Your Potential Clients

When starting a car parts business, thinking about your company incorporation is a must. Still, before going that path, you have to do your assignment first and know more about your potential customers. As a car parts shop owner, your clientele may comprise private motorists and motoring businesses such as car repair garages.

Retail customers. The retail customers vary on your product offering. In general, however, they include the following:

  • customers looking to buy items such as screen wash or de-icer (knowledge on mechanical aspects is not a must for these products)
  • home mechanics seeking to buy parts for their own vehicles, usually for repair
  • people wanting to modify their vehicles, such as the addition of an exhaust system or installation of new wheels
    some even go to car parts shop to buy gifts for fellow car enthusiasts

Specializing in selling unusual products for cars may be a great idea to encourage retail customers. It is unlikely that customers will travel significant distances just to purchase an item that they can buy anywhere. With this, you should also consider an accessible area to set up your shop.

Trade customers. Another way to go is by selling directly to motor trade entrepreneurs. If you decide to go down this path, you have to determine the demand: go around and consult with independent garages and other related businesses. You may also reach out to car dealers, car valet service providers, and car specialists to supply the car parts. Once you develop a customer base, you need to ensure that your supply chain is smooth flowing to arrive on time.


Crafting Your Services Menu

Starting a car parts business means you have to prepare yourself and study the industry. Why? Your customers, and even your own employees, expect you to have certain knowledge in the automotive industry. From time to time, your clients will ask you for advice, such as the suitability of the car parts and accessories and the pros and cons of using a particular product on a particular vehicle.

The do-it-yourself mechanics will also pose many questions about repair and service processes. The professional mechanics, meanwhile, will probably ask you for technical knowledge about the product specification.

As the business owner, you must be able to address such concerns. With that, here are some of the services you may consider offering. At the same time, these are the things you should be studying well to address the market needs better.

  • delivery service for trade customers
  • fitting service for items like windscreen wipers and batteries
  • fitting service for big items like in-car entertainment, satellite navigation systems, and alarms

These are some of the services that may also differentiate you from other competitors. If you need further help for business advisory on the matter, you might need a UK corporate service provider to give you a hand.


Finalizing Your Inventory for Sale

It is wise to consider a niche or a specific set of products you will sell in line with business differentiation. It can help you draw in customers if you can market your business as a premium supplier of certain car products. These include the following

  • car care and motoring accessories
  • spare parts for DIY mechanics
  • performance modifications or customizing accessories
  • leisure goods for bicycles and cycling accessories

The products mentioned above are the primary items being sold by the car parts business. However, there are other items, usually for recreation, that you may include in your inventory for sale. These are the following:

  • DVD players for car entertainment systems
  • speakers and amplifiers
  • kits to connect media players

While these have been a must for many car owners, you should still study the market demand for such items first before stockpiling. In general, this is something you should do for all your inventory for sale—good inventory management can help you reduce your cost.


Business Registration for Your Car Parts Shop

When starting a car parts business, the legal aspects of the industry are a matter of importance.
Keep in mind that you have to register your business with the authorities. You register with the UK Companies House when setting up your limited company. A limited company refers to a business structure where the entity is separate from the owners. This means the company can own its assets and act as a legal entity.

  • Take note of the following when registering your limited company:
  • choosing a unique business name
  • registering the name as a trademark
  • company location should be in the UK
  • appointment of at least one director

Securing necessary permits is a must because not doing so may lead to your business shutting down—a very unfortunate event, especially because you have infused a lot of money already.


Licenses for Your Car Parts Business

There are no specific licenses you need to secure when starting a car parts business. Still, there are specific situations wherein licenses are a must. Take note of the following:

  • secure a license from Her Majesty’s Revenue and Customs if you handle industrial denatured alcohol
  • register with DVLA if you provide vehicle number plates
  • secure music license from PPL PRS Ltd. if you play background music on your premises
  • register with the Information Commissioner’s Office as a data user if use a CCTV system

Starting a Car Parts Business in the United Kingdom


Professional Help for Your Business

Starting a car parts business is a big undertaking. You may need a reliable and knowledgeable partner who can help you carry out every task to make your dream come true. With that, 3E Accounting is here to guide you every step of the way. We provide services in accounting, taxation, business advisory, and more. Contact us today.