Skip to content 
According to CEIC Data, the number of registered motor vehicles in 2021 was 4,353,891. Of course, new cars keep coming in as people make more purchases daily, thus, opening an auto spare parts business in Kenya can fetch massive profits.
To start an auto spare parts business you will need Kshs 1,500,000 and above. This will earn you a profit margin between 10% and 20% depending on the items.
While the current spare parts market offers solutions for popular cars, some car owners still lack repair items for their automobiles. Hence, there’s a market gap that needs to be filled and you can take advantage of that to make returns.
To help you establish a profitable spare parts business I will be covering the following:
- The auto parts business opportunities
- How to open a spare parts business in Kenya
- Common spare parts business inquiries
Let’s take an inside look!
Step-By-Step Process Of Starting a Spare Parts Business In Kenya
Having a step-by-step plan to open a business helps you set up your store in a short time unlike when trying to figure out the requirements during the process. It also saves you money since you know the best dealers and wholesalers.
Fortunately, we’ve put together a plan for you to guarantee a seamless business setup process. Here’s how to start a spare parts business in Kenya
Step 1. Conduct Market Research for Auto Spares
The auto spares business is a unique type of venture as it requires specialization depending on your target market demands. As a result, you should conduct thorough research to master how the market works and identify what is required to succeed in this sector.
Some of the key areas you should focus on include the following;
1. The demand for auto spare parts
2. The relevant pricing strategy
3. The most reliable suppliers
4. Your competition
Once you understand how the market works, you can easily use this information to strategize effectively for your new business.
Step 2. Create an Auto Spare Parts Business Plan
Your business plan gives you clear directions on the fundamentals of your business setup. Whether capital, business location, or marketing, this document entails essential business information to help you start a successful business.
A complete spare parts business plan should cover the following areas for the best outcome:
- Auto spares business location
- The initial capital
- Source of funds
- Auto spares business strengths and weaknesses
- The business risks
- Risk mitigation strategies
- List of reliable auto spares suppliers
- Marketing strategies
- Business growth plan
Step 3. Identify The Right Business Location
Your business location is a key determinant of whether your business will be a success or not. As a result, you should choose a spot that favors your business’s accessibility, visibility, and safety.
No car owner wants to struggle to find your store, so choose a shop that your target audience can smoothly drive to and from. This will increase the flow of customers to your business, especially if you offer top-quality products.
Remember to set up your business in an area with many cars. This will provide a ready market that only requires effective marketing and quality services.
Step 4. Register Your Business and Get Legal Documents
Operating a business in Kenya without the government’s recognition is a serious offense that can cost you dearly. You can avoid these inconveniences and establish your business seamlessly by applying for all the necessary legal requirements.
They include:
- Business Registration
How do you plan to operate your auto spares business?
Is it a sole proprietorship or partnership venture?
The government of Kenya has made this step easy by establishing an online step-by-step process on eCitizen. You can easily create an account and follow the outlined steps to register your business successfully.
All you need is your ID, email address, and KRA Pin certificate if you’re operating the business solely.
- Business Permit and License
The county authorities demand you apply for a business permit before operating any business. Hence, you should visit their offices and learn the right permit for your auto spares business.
Typically, the business permit and license cost around Kshs 10,000 annually. These documents are usually renewable yearly so you should budget for it.
- Importation Legalities
As your business grows and demand increases you may need to import auto spare parts stock from countries like Germany and Japan. Not following the importation legal requirements may put you on the wrong side of the law.
If you decide to go through this route ensure you have an original commercial invoice, bill of landing, logbook, and pre-shipment inspection document. This will guarantee you a smooth importation experience.
Step 5. Find The Right Auto Spares Suppliers In Kenya
The best supplier sells top-quality spare parts that will offer your clients prolonged service. So, when choosing a spare parts supplier ensure they can source durable and robust car parts. The right supplier should also offer timely delivery services.
You’ll encounter different clients with unique needs; one client will need a Toyota Vitz radiator while another will opt for a Nissan Note spare part. Having a wide range of spare parts you can choose from draws a lot of sales, increasing your returns.
So, identify and collaborate with a supplier who will provide you with quality products while supplying you with a full inventory.
Step 6. Stock Fast-Moving Spare Parts
Now that you have all the legal documents and location requirements, it’s time to stock your shop. As a first-time spare parts business owner you’re likely to choose low-demand spare parts unknowingly.
As a result, you should identify fast-moving car parts that will give you quick sales to boost your business growth. Here is a list of fast-moving auto spare parts you can stock:
- Headlights
- Tires
- Batteries
- Rear Lights
- Brake Lights
- Steering Wheel
- Fuses
- Shock Absorbers
- Fuel Filters
- Muffler Exhaust
- Lubricants
- Windscreen
- Side Mirrors
- Brake Pads
- Catalyst Converter
- Fuel Pump
- Control Arm
- Radiator.
- Transmission Fluid
Tip: The most highly demanded car brands include Toyota, Nissan, Mazda, and Suzuki.
Step 7. Launch Your Business
Once you acquire your first stock, organize it in your rental space. Then invite local media to help you launch your business successfully.
Read Also:
How To Invest In a Motorcycle Spare Parts Business In Kenya
15 Best Cheapest Cars in Kenya and Their Prices in 2024!
How To Grow Your Spare Parts Business In Kenya
Once you set up your spare parts store and launch your business you must implement a few strategies to grow your business. Some of the key tips you should use include:
Tip 1. Market and Brand Your Business
Marketing plays a key role in building a customer base and sales. As a result, you should develop marketing strategies that will keep you ahead of your competition. Depending, on the business environment you can apply pricing techniques, advertising, and digital marketing.
Additionally, you should leverage branding to create a positive impression of your business. So, what does branding entail?
Branding is the identity and story of a company or business. Some of the key elements that form your business brand include logo, tagline, tone of voice, and visual design.
A good example is anytime an individual sees an orange logo with a Naivas green tick their mind thinks of Naivas Supermarkets.
Create a brand that will remind people of your spare parts business!
Tip 2. Build a Strong Supplier Network
Selling a limited number of products makes you unreliable, pushing clients away. And if they find an auto spares dealer with all the parts they need, your shop becomes the last place they will visit again.
So, ensure you connect and collaborate with reliable suppliers who can deliver all the items you need. This will help you provide a wide range of spare parts, supplying our clients fully in good time.
Tip 3. Partner With a Shipping Expert
As you continue to grow your business, you will need to secure more specialized spare parts and find stock at a cheaper price if you decide to become a wholesaler. Transitioning to this level can be an uphill struggle if you’re relying on local suppliers.
Fortunately, with a shipping expert, you can source for all the auto spare parts you need across the globe. So, find a reliable and established shipping professional who will help you ship your stock.
Tip 4. Sell Quality Spare Parts
Car owners are more knowledgeable in this era than in the past. They know how to inspect the spare parts’ durability and quality. If you sell fake products, they’ll find an alternative dealer who is reliable and leave your store for good.
So, ensure you source the best spare parts that can offer them long-term service. Also, remember to extend excellent customer service.
Is Spare Parts a Good Business?
The spare parts venture is among the most profitable business in Kenya due to the increased number of car owners. It’s a great business opportunity that earns you a profit margin between 10% and 20%.
Conclusion
The spare parts industry is booming due to the increased number of car owners in the country. As a result, setting up a spare parts business in Kenya can fetch you high returns, helping you build wealth fast.
Are you ready to start a spare parts business?
Visit our store for professional financial guidance!
