Long time no see, few market questions for you all.

[ColtonBH]

Hello everyone, its been a while since I've been on BF.

I'll get right to it, myself and a buddy of mine have been designing a business model for a used BMW part sales outlet. We want to create a website where people over the country can purchase used car parts with a warranty, especially aimed at younger people like myself that can afford to purchase these cars, but can't afford to pay new BMW parts prices, and those that either don't have time to visit pick n pull yards themselves or don't have a source near them. We'd try to keep our prices in between those of Pick n Pull yards and non-specialty salvage yards.

As for market, there really is nothing similar to that at the moment, most online parts sources are general salvage yards that may only have a couple BMWs, as well as Ebay and Craigslist, and we believe that many people would be willing to pay slightly more for parts against those two when there's a good warranty and customer service involved.

We know there was a large facility doing a similar thing, I'm not going to directly name them so I'll call them "Bavaria Car Reusers," but you absolutely cannot run a successful business with that low of a caliber of customer service, and I believe they went under mostly due to that, as well as appearing to overextend themselves, having far too many vehicles on hand, more than the market requirements.

Anyway, I'd like to hear everyone's thoughts on this, and whether or not you personally would buy parts from a source like this. Thank you!

Edit:
I am basing some of values and information off of my previous experience when I was parting my e39 and e38, even local demand for parts was fairly good, and ebay added to it as well. I also state targeting a younger customer base as that is who is generally attracted to the lower prices. That also mean targeting more toward 3-series (e36/e46) to start with.
Also, as Chris asked, this would be a warehouse facility in which we stock and inventory parts from dismantled cars.

Edit:
Danny gave www.bimmermerchant.com as competition.

[ChrisMelnyk]

Interesting idea.

And just for clarification, are you planning to operate a salvage yard/ warehouse yourself (and keep inventory)? vs create a platform for others to do the exchange?

From my point of view, my needs are completely serviced at the moment.

-For anything known to go bad with age/mileage and/or cause catastrophic damage if it fails, I buy new off of FCP, Peilcan, ECS etc...
This includes anything cooling system related, and some things engine related. I would never buy used for these items.

-For most electrical, suspension, trim pieces/nik-naks I may need, I am usually able to find them cheaply off of FCP, Pelican, ECS etc....

-For trim pieces/nik-naks that are a bit pricey on my go-to sites (especially if they have no after-market options), I buy used off of Ebay.
In the past few years, I've bought a Tail-light for the X5, Fog-light set for the 530i, a replacement rim for the 530i, replacement mirror glass for the 530i, and misc trunk tools for the 530i.

These are the only used parts I bought, and to be honest, it doesn't really matter to me whether I got a warranty on those items or not.


I don't necessarily think that your business model (if I understand it correctly) would work the best for our cars. The parts seem fairly plentiful and affordable (That's why I own 2), and I wouldn't need a warranty on anything used. All the Ebay sellers I have dealt with have been great too.

On the other hand, exotics would make sense to me - Ferrari, Lamborghini, Aston Martin etc....

Wrecks can be bought cheap, the parts can be rare so used prices can be very high, and I'd imagine that clientele would care more about customer service / warranty.
Also, most people would be buying used parts from afar, so they would have to be shipped anyway (you would not be competing against locals as you would with our fairly common vehicles)

Also, old used exotic parts seem to go up in value, while ours go down (Expect for M parts)

That's my take, which again is more based on if you're planning on warehousing all the parts. If your not, then many of my points are irrelevant.

[edjack]

Sounds dubious, at best.

[ColtonBH]

Interesting idea.

And just for clarification, are you planning to operate a salvage yard/ warehouse yourself (and keep inventory)? vs create a platform for others to do the exchange?

From my point of view, my needs are completely serviced at the moment.

-For anything known to go bad with age/mileage and/or cause catastrophic damage if it fails, I buy new off of FCP, Peilcan, ECS etc...
This includes anything cooling system related, and some things engine related. I would never buy used for these items.

-For most electrical, suspension, trim pieces/nik-naks I may need, I am usually able to find them cheaply off of FCP, Pelican, ECS etc....

-For trim pieces/nik-naks that are a bit pricey on my go-to sites (especially if they have no after-market options), I buy used off of Ebay.
In the past few years, I've bought a Tail-light for the X5, Fog-light set for the 530i, a replacement rim for the 530i, replacement mirror glass for the 530i, and misc trunk tools for the 530i.

These are the only used parts I bought, and to be honest, it doesn't really matter to me whether I got a warranty on those items or not.


I don't necessarily think that your business model (if I understand it correctly) would work the best for our cars. The parts seem fairly plentiful and affordable (That's why I own 2), and I wouldn't need a warranty on anything used. All the Ebay sellers I have dealt with have been great too.

On the other hand, exotics would make sense to me - Ferrari, Lamborghini, Aston Martin etc....

Wrecks can be bought cheap, the parts can be rare so used prices can be very high, and I'd imagine that clientele would care more about customer service / warranty.
Also, most people would be buying used parts from afar, so they would have to be shipped anyway (you would not be competing against locals as you would with our fairly common vehicles)

Also, old used exotic parts seem to go up in value, while ours go down (Expect for M parts)

That's my take, which again is more based on if you're planning on warehousing all the parts. If your not, then many of my points are irrelevant.

I am talking about keeping a warehouse and inventory.
The comment is much appreciated, thank you, this is just the type of input I am looking for.

- - - Updated - - -

Sounds dubious, at best.

How so, for the same reasons stated by Chris? (good/bad/indifferent, just trying to get all the input I can)

[dannyzabolotny]

I feel like that's exactly what this guy does: http://www.bimmermerchant.com/ He parts out tons of cars, has lots of inventory, and has everything sorted nicely on a website. You'd probably be competing with that.

[ColtonBH]

I feel like that's exactly what this guy does: http://www.bimmermerchant.com/ He parts out tons of cars, has lots of inventory, and has everything sorted nicely on a website. You'd probably be competing with that.

Ah yes, thank you. I knew there couldn't be no one in that market, and though I didn't see him through basic searches, so I just have to have better SEO

[XAlt]

You know there's a huge graveyard on the border that'll ship anywhere right?

[Plattus1000]

Go for the money in these cars, go for front and rear bumpers, rear hatch trim and lights. Go for the harder parts to find and stop there. Don't sell/offer every nut and bolt or you'll extend yourselves too much. IMO

Find the common oem parts people want most or ruin the most and own that market.

I like the idea but love it 8-13 years ago. I think Chris might be right. That said, I'm always impressed when someone does what they love so, do what works for you. At least you have a bit of a base to start with in bf.

[ColtonBH]

You know there's a huge graveyard on the border that'll ship anywhere right?

I know about that one, grabbed a couple things there once or twice, but they don't advertise well, mostly just in the local CL

[ColtonBH]

Go for the money in these cars, go for front and rear bumpers, rear hatch trim and lights. Go for the harder parts to find and stop there. Don't sell/offer every nut and bolt or you'll extend yourselves too much. IMO

Find the common oem parts people want most or ruin the most and own that market.

I like the idea but love it 8-13 years ago. I think Chris might be right. That said, I'm always impressed when someone does what they love so, do what works for you. At least you have a bit of a base to start with in bf.

Thank you, that's what our basic plan is to start out with, we should be able to make a sustainable profit with stuff like that alone, and then keep the low demand parts on the shelves on an as needed basis.

The both of us are sick of working for someone else, and the worst that happens is were out a bit of cash.

[Dking078]

Ayeee that's my model too. Except I'm on the restorative side for rare parts.

"For the younger" crowd" is a bit hard. Truth be told your model has been established on German ebay for a LONG time. But recently there has been a bit of a decline in offerings since no one is really buying old generic used parts. Back 2-3 years ago you could find just about ANY part of the E39 on there. Now, not so much as demand has really dropped off. I almost never import a trim set from germany anymore since they all but stopped listing.

ChrisMelnyk is on the money with this one.

The best market to corner is one with high demand of GOOD quality parts, primarily aesthetics like leather items (Seats steering wheels) etc as a car getting old has demand for this. The E39 is too old to do this already (Trust me I'm trying this HARD).

Unless it was a heavy duty / expensive item like an alternator I can understand, but those who are severely budget oriented would go for whatever new off-brand ebay stuff is out there.

And one can imagine with 15-21 year old parts, the default rate is high if it is mechanical/electrical/or some plastics. One thing to take into account is shipping costs. To which I mean any non-high volume shipping account is costing annoyingly big $ these days.

Now.... Should you want to apply this market strategy for the F10 model, you're in the prime time. Turbos, electronics, everything is getting ripe as these are coming off warranty and the used parts market will be ramping up.

Clemster got the E39 M market perfect
Troy Jeup / Kelly got the E60 M Market
No one has really claimed the F10 market yet.

Bimmermerchat kind of got the last this market slice for E39 / similar gen cars. Good guy from when he started in his yard, but not exactly premier site in the used parts world. Surprised the hasn't moved to newer gen cars given his growth.

Plus in this time LKQ has been trying to making a name in the used market place. But as you stated for other companies, their Customer support sucks also.

[crazy4trains]

I feel like that's exactly what this guy does: http://www.bimmermerchant.com/ He parts out tons of cars, has lots of inventory, and has everything sorted nicely on a website. You'd probably be competing with that.

I've seen his youtube videos but didn't know he had a website.

I had many of those same parts (cooling fan, upper radiator hose, expansion tank, water pump pulley etc.) for sale a few months ago with 88,000 miles on them. I couldn't give all of them away for essentially the same price as one of the items on the above referenced site. I would have sold them to anybody for just the cost of shipping. IMO you will have to sell very cheap to move any inventory.

FCP's lifetime warranty has me a loyal customer.

[ColtonBH]

Ayeee that's my model too. Except I'm on the restorative side for rare parts.

"For the younger" crowd" is a bit hard. Truth be told your model has been established on German ebay for a LONG time. But recently there has been a bit of a decline in offerings since no one is really buying old generic used parts. Back 2-3 years ago you could find just about ANY part of the E39 on there. Now, not so much as demand has really dropped off. I almost never import a trim set from germany anymore since they all but stopped listing.

ChrisMelnyk is on the money with this one.

The best market to corner is one with high demand of GOOD quality parts, primarily aesthetics like leather items (Seats steering wheels) etc as a car getting old has demand for this. The E39 is too old to do this already (Trust me I'm trying this HARD).

Unless it was a heavy duty / expensive item like an alternator I can understand, but those who are severely budget oriented would go for whatever new off-brand ebay stuff is out there.

And one can imagine with 15-21 year old parts, the default rate is high if it is mechanical/electrical/or some plastics. One thing to take into account is shipping costs. To which I mean any non-high volume shipping account is costing annoyingly big $ these days.

Now.... Should you want to apply this market strategy for the F10 model, you're in the prime time. Turbos, electronics, everything is getting ripe as these are coming off warranty and the used parts market will be ramping up.

Clemster got the E39 M market perfect
Troy Jeup / Kelly got the E60 M Market
No one has really claimed the F10 market yet.

Bimmermerchat kind of got the last this market slice for E39 / similar gen cars. Good guy from when he started in his yard, but not exactly premier site in the used parts world. Surprised the hasn't moved to newer gen cars given his growth.

Plus in this time LKQ has been trying to making a name in the used market place. But as you stated for other companies, their Customer support sucks also.

Thats a good thought, the reason why we were looking to start with e39 gen bimmer parts is that we have a very small amount of startup capital, although assuming we can become profitable fairly quickly, that is a good direction to go, especially since we'll have to have a salvage/dealer license anyway.

[sooch]

Thats a good thought, the reason why we were looking to start with e39 gen bimmer parts is that we have a very small amount of startup capital, although assuming we can become profitable fairly quickly, that is a good direction to go, especially since we'll have to have a salvage/dealer license anyway.

Have you thought of going used car/small flips to get things moving? Considering you will be buying a high volume of "parts cars", there is a a potential to piece together some decent drivers and alleviate some of the financial burden. Cars with salvage titles will immediately get placed into a parts section, torn down and disposed of. When you stumble onto a 'good deal' for a running and driving clean titled car, the excess stock you have accumulated can be used for small fixes. Even if you are selling for small gains of $500-1000 a time, you can keep cash flowing on a larger scale. You will be making fractions on parts depending on the types of parts you look to sell. It will be very tough to make a profit in the beginning so, the used car market may be enough to help you eat...

Also remember to do your homework on freight in and out. I feel like this is often overlooked at least in the business that I am in- as well as buying parts from guys on the forum. UPS accounts or even a 3rd party freight company to ship differentials & transmissions will eat you alive. This can be a make or break on the customer relation side and from a profitability stand-point. Packages that end up damage seem to be what kill companies left and right (think smashed up OEM bumpers & fragile trims)... Another train of thought, would be rebuilding differentials, heads, and blocks etc. You could run into warranties and uncharted territory, BUT the mark-ups on this stuff from mainstream companies seem to be quite exorbitant. This could be the precision and cost of their time, but I'm not in that business so I am ignorant to that. Solid USED engines with a short warranty are few and far between, perhaps locals can use you for the labor side? I am only spitballing, because it is in such an infantile stage- you guys are young enough to be able to get a bit dirty. Being mechanically inclined I'm sure small little engine R&R could be up your alley.

As everyone has echoed, it's only a matter of time before the e39 demand truly hits rock-bottom. I wouldn't let that discourage you, but keep in mind the sustainability of the e39 platform. Perhaps an alternative car brand to target (or BMW generation) would keep the lights on.

Interested to see where this goes! e46 m3 market could use a couple off different guys that part them - this could be a very good path to follow!! (I'd be inclined to buy )