I am seriously considering opening a NAPA Auto Parts store.  I have the required capital and may roll some of my 401k into my startup LLC's stock for startup cost.  Startup is between $75K-$125K.  This store would be opening near the Eagle Ford Shale boom area South TX.  I would be quitting a good paying Job that I hate.  My wife is a Pharmacist and we have a low dept to income ratio now.  Just would like to hear some Pros/Cons insights from ARFCOM business experts.

I would never go into debt to finance a franchise.  If you can cash flow it possibly.  The whole automotive retail parts sector is cut throat to say the least.  You better pile-up some large and loyal customers who will be in the store daily.  Finding good employees who are knowledgeable will be a challenge because you wont be able to pay them very well.  Some of these counter people live and die by the damn computer screen.  They have no idea or background about what or why they are filling in required fields on the monitor.  I dont know how NAPA will format your inventory, but if you dont have it and the other store does, you just lost the sale.  And I know the whole, "we can have it for you tomorrow" line.  Somebody has to be on top of what is critical inventory to have on hand and not what corporate data crunchers say.  This very problem also exists in dealership parts departments as well...

I would be surprised if that was the start up cost.  The one here in town I've been all through since I know the guy so some times I go find my own parts likely has 50-60k in inventory on hand at any given time.  The other parts stores seem to be killing all the napa stores I know around here west of dallas.  Although that's just from going in them and noticing the foot traffic.  Seems like the other parts stores have much more foot traffic here, but napa may sell more to mechanics so that's not necessarily a bad thing. Best of luck

Starting inventory is around $450,000  for the store size I would be starting.  NAPA business is 75% wholesale.  Actual startup cost is around $600K  my out of pocket would be the $75-125K.  NAPA is not a franchise and has no franchise fees.  They guarantee inventory buy back at the current rate.  So if you have stale inventory you can just sell it back to NAPA.

Its the same way here, Auto Zone and Advance Auot Parts are considerably busier than any of the other parts stores in town.  The Napa and O'Reilly's are certainly a lot cleaner, but they don't seem to get the amount of business as the other two.

I thought they must do mostly wholesale, or else the one in town here would have gone under a long time ago.  Are you good at getting those type of clients?  I guess thats what you really need to know.

What the others said, plus location, LOCATION, L O C A T I O N!

You had better be visable in an area with no other parts stores. I dont know about TX but back here in KY, if there is no parts stores in that area, there is not much call for parts.

I like NAPA, but usually their prices are higher on the same parts as at Advance or AZ, or they are never open when I need them (evenings after work, weekends)

This sounds more like what I was expecting and the wholesale side also makes sense.  I would suggest that you primary consideration is to do a lot of due diligene in determining how you might penetrate that market.  You will need to know if other parts suppliers tie up customers in contracts or not, as obtaining an account say "Joe's Auto Repair" could not be as easy as you might think especially if the process can be construed as tortuous interference with contractual relations.  Then when those contracts come around for renewal you might find that existing suppliers incentivize renewals with various types of offers, so you'll have to be able to compete with that.

In my view that is your biggest challenge and what you need to know - how am I going to obtain wholesale accounts and also retain those accounts?

+1.



( This is because they aren't geared twards the public)



 

The NAPA store here is the only one open on sundays.  They do a good business for that reason alone.  I do think they have good quality if you upgrade to there better line.  However the people who just walk in typically shop strictly on price and want it as cheap as possible.  If you deliver parts to the mechanics and shops that also helps push product out the door.  I dont really care for the big dorky hat on the roof though.

97% of my business is with them.  I like them a lot.

I prefer NAPA over other parts stores. Their parts are good quality and they can get some hard to find stuff too, such as the engine mounts I needed for my '69 Firebird.

It's the people behind the counter that will help more than anything.  People buy parts from people, I've been sayin that for almost 15 yrs.  My program will finally hit 1000000 commercial wise this this year, 43.5% GM. And 2200000 on the retail end.  Store has been there since1984.

If you're the only one in the area, it might be ok.

However, do some research into what it takes to become a vendor (so they can buy from you) to the oilfield companies. Drilling, servicing (Haliburton, CalFrac, FracTech, Nabors Completion). At Nabors Completion & Production Services (formerly Superior Well), it could be a 6mo wait. God only knows how long it takes to get paid...

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Wrong thread, man.

Maybe its the one hour of sleep talking, but huh?  If he is going into an area where the oilfield is his primary customer base, he'll have to be able to understand what the headaches in them buying from him.


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Oh duh, I read that wrong. I shouldn't post when I first get up in the morning.

And re-reading my last, I cant type on 1hr of sleep in the last 32hrs.


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