Importing and Selling Car Parts From China
Low cost Chinese parts were not currently huge or widespread in the UK market. There was an opportunity for anyone to take advantage of this gap.
I saw a growing trend of automotive parts being manufactured in China and many companies in the United States were importing them. I wanted to take a piece of this action for myself and bring the Chinese parts to the United Kingdom instead.
Low cost Chinese parts are currently not huge or widespread in the UK market. There is still an opportunity for anyone to take advantage of this gap.
I knew I was capable of selling these Chinese goods because I had experience of doing exactly the same thing in the past.
a) I sold electronic diagnostic hardware imported from China before.
b) I sold brand new and used vehicle parts before
c) I sold new Peugeot parts working directly with the dealership group before.
As long as I could buy the Chinese parts at the right price and sort out deals with reliable manufacturers. I knew I could replicate what I had done previously but make more profit per sale.
I knew I could also reach out directly to servicing garages / repair workshops / local dealerships to see which parts they have a demand for, then supply Chinese parts to them if they wanted it. The Chinese parts would be a low budget option for their customers. Or it would be a way for the garages to make more profit per sale.
This would rely on the factories to have good warranties and the paperwork to make sure they will cover you if anything bad happens. Like a part breaks down within a day etc.
However that is the risk you take.
All I had to do was find the best Chinese manufacturers out there and close the deals.
– Sourcing the best suppliers would be a challenge
– Communicating with non-native English speaking suppliers, so they understand you would be a challenge.
– Making sure the companies are reliable and legitimate would be a challenge.
– Buying the parts at the right price and getting them shipped over quickly would be a challenge.
– Finding customers who would try out the Chinese parts would be a challenge.
– Talking to the Chinese companies in real-time. Like through a phone call would be a challenge because China is 8 hours ahead of the United Kingdom. So if deals were going to be made I would have to do business at around 1am-5am GMT.
– Spoke to the Chinese contacts I already had from the diagnostics sales previously to see if they could refer me to reputable suppliers and factories in China. They could not really help. I was only able to get the details of one factory that was worth talking to.
– I then researched a list of every reputable automotive factory in China. I sent letters and made phone calls and emails to every single one of them to share my vision and to propose how I wanted to find someone to partner with me to bring this vision to life.
– Made a short-list of the best factories. Then get them to send me all their paperwork and catalogue of goods and who they have supplied recently that is worth mentioning. Some of these factories were huge with extremely high quality products. Products which are made to an even better standard than in the United Kingdom, it is unreal. Their machines were amazing.
The factories were supplying some car manufacturers in China and lots of big name retailers in other countries.
Some factories wouldn’t budge on their prices or they were only interested in supplying people with huge orders. As they couldn’t provide the manpower to deal with small orders, it wasn’t worth their time.
– Closed deals with factories and suppliers I had the best chemistry with in China. Those who were motivated to work with me. It was on a per sale basis. So I wouldn’t have to buy anything up front. They would let me know which parts I could advertise, then when the sale came in, they would ship the products out to me, or to the customer.
– I sent someone over to investigate the factories to make sure they were legitimate. This was a local Chinese company who specialised in this field. Some Chinese sellers are nothing more than a name, a little run down shack in the corner with a small desk and they may even use a fake address. My investigator gave me the clear on most companies. This also built my reputation with the suppliers.
– I tried to get the suppliers to handle all of the shipping. Most of them are experienced in this field and already have everything setup on their end. So there is no need for people like me to use my own shipping company to come and get the goods from them and to deal with all the export / import paperwork. The factories know a lot about this stuff.
– Some bigger orders were only delivered to the port in the UK, so I’d have to find a means of getting it from there to my address and then to customers door. This had more profit but wasted time. I tried not to use this option.
– Some orders could either be shipped by boat, taking 30 days. But it was really cheap. Almost free delivery. Or by air, taking 1 or 2 days. Depending on the profit of the sale and the type of sale. I would get the supplier to send them out by boat or air. I made sure to get tracking and photographs of all deliveries. I did not pay the full amount until the product arrived at my door safely. I also made sure to use an escrow service so they could not cheat and keep the money.
– Some suppliers were hesitant, so I simply ordered some parts from them first and then once they could see I was actually buying from them. They then gave me better communication and spoke to me about helping me to expand the sale and buy way more items.
– Most of China operates when the United Kingdom is asleep. So I had to schedule meetings with the Chinese and then work overnight when everyone over here was busy sleeping. Then the next day I would continue working. It was the only way to get deals done. Emails took too long. The Chinese like to talk to you in real-time. They do not like emails. Video conferencing and phone calls are the best. Whatsapp was a good way of setting up these meetings, it was also basically free to use too. I could communicate directly with the people that matter and made the decisions.
– Worked with Chinese suppliers so they would provide me all the parts information and photography to use.
– Started out by selling the parts online like I had done with the thousands of other parts I had sold in the past. Uploading only the most expensive and profitable goods first. There were maybe 200 more expensive parts worth selling. Due to delivery costs.
– Then I moved into selling the lower value items. Giving my customers the option of either waiting for delivery, or paying more for instant delivery. I smelt what sold. Then gambled on buying a handful of items at a time so they could be shipping out quicker. However this was too risky, so I chose to stick to only selling if something had sold, drop-shipping as you call it.
– When focussed on the drop-shipping strategy, I added another 500 products.
– Reached out to some small repair workshops or dealerships to see what I would need to be able to do, in order to become their parts supplier. How could I convince them to buy from me? It was tough. Most repairers want something quickly. 80% of the jobs are quick-fixes and garages want parts the very same day, preferably in the morning. The only way I could provide parts to these places are if they service the same cars regularly, so they use the same parts all the time and would be willing to buy in bulk up front.
Or if I provided them with sensors and difficult to find parts. Whereby the costs of these usually in the United Kingdom make them too expensive. So garages would always look for alternative options. Example a sensor can cost £80 in the UK. But £9 in China. Big difference.
Price would be the way I could get them to buy.
– After becoming a supplier for 7 servicing garages, I paused supply for them as I questioned if it was worth it. I came to the conclusion that it was not worth the time to deal with them, as every order a lot of manual work had to be done to process them. Whereas online selling could be far more automated. This could be changed in the future however. I could get the garages to basically “buy” from my shop. Then their orders would be the same as every other online order.
– Branded the parts as my own brand. Selling my story and my vision to all my customers. I made it clear that I was trying to become a value for money alternative to the bigger names out there. This improved sales compared to having a no-name, made in China product.
I used my own fancy branded packaging to make the customer feel special too. No one else in car parts uses nice packaging. It’s usually just a clear plastic bag. Or a cheap box, or jiffy bag.
– Focussed my offering and listed 600 parts online. Based on popular models of vehicles. Parts which are already proven to sell.
– Selling about 25 expensive parts a week. About £70 per part average revenue. £1750 a week.
– Sold about 40 lower value items a week. £25 a part revenue. £1000 a week.
When I first entered into the market and tried to bring car parts from China into the UK. I really thought that I would have a better response from garages. But it seems that most of the money made from repairs is because they get jobs done quickly. There is no need for super cheap parts.
There would only be a need in the DIY market. Where people have time to wait around for orders to come in. Selling online is the best way to target these enthusiasts.
The best way of dealing with Chinese part manufacturers would be to just acquire them. And reap the rewards of their existing profits. Acquire a few of them at once. And then resell the group as a whole.
I think a factory would also need to find consistent large orders from a vehicle manufacturer, or a National parts sales place. That is where the real money is.
Dropshipping is fine, but there are limits to the amount of things that can be sold.
Seeing as parts are a rare sale, there are hundreds of varieties it is nearly impossible to hold stock for all of them due to costs. Only the big players have this capacity.
To get where I really want to be, I would have to actually be in control of the factory.
The delivery with car parts is a big restriction on why drop-shipping cannot be a multi-million pound business though.
Even the biggest online sellers only do a few million a year in sales.
This is simply not good enough.