How to become a parts supplier and distributor

Updated April 17, 2017

Working as an automotive part supplier and distributor can be a very rewarding profession. Automotive repair shops and parts stores always need aftermarket part suppliers and replacement parts for repairs and modifications needed by their customers. This provides distributors and suppliers with an endless customer base. Become a licensed parts distributor, negotiate a deal with a manufacturer, and establish business relationships with automotive shops.

Apply for any licensing and training required for the sale of automotive parts in your state. Depending on the regulations in your state, it may be required for you to have a license to supply motor vehicle parts. Taxing might also be an issue. Contact the Small Business Administration, your state department of motor vehicles, your state's revenue department and the Internal Revenue Service to learn what is needed to register your business as a Limited Liability Company (LLC), and how to file for a tax ID number. They will brief you on any additional state and federal tax regulations, fees, and licensing you may have to attain to become an auto parts merchant in your state.

Negotiate a deal with an automotive parts manufacturer such as Mopar or NAPA. Many of these manufacturers allow customers buying in bulk to purchase parts at a lower price. There are also many web-based part suppliers such as Auto Parts Deal, Auto Parts Warehouse, and Aftermarket Automotive Parts Distributing that you should contact about bulk sale discounts.

Secure financing. There are both private and government sources for capital to help with the start of a new business. This money can assist you in covering the cost of inventory and warehouse space. Contact a commercial lender or the Small Business Administration and ask about its loan and grant programs.

Set up your supply chain or dealership. This can be run through a website out of your home or through a warehouse, but it is essential you have the infrastructure in place to stock the parts you will be supplying to your customers. Being able to keep a wide range of automotive parts in stock can provide you with a competitive edge over other suppliers, as many parts that are difficult to locate are also not high in demand.

Establish professional relationships with auto-part stores, mechanics, and individuals interested in distributing the products you have in stock. Some places that might be interested in doing business with you include local repair shops, residential do-it-yourself mechanics and small auto parts stores.

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