Many businessmen are worried about how to become a distributor and bring their company to a high level of profitability in the current Russian market. To answer it, it will be necessary to analyze a number of important aspects of work in this industry.
The market requires new products
The growth rate of car sales in recent years is reduced, due to the gradual saturation of this market. However, models of new or little-known brands are selling well in Russia. Therefore, entrepreneurs planning to open dealerships, it makes sense to arrange the supply of cars rare or not having a sales history in our country. The lowest frequency of the presence of vehicles of this type is in the regions east of the Urals.
There are not many dealers as such: in Novosibirsk, for example, only a few brands have more than one dealer. In the neighboring Siberian cities - Tomsk, Irkutsk, as well as in Barnaul and Kemerovo - many well-known car brands are not sold at all. Distributors tend to pay attention to settlements with a higher number of inhabitants.
First a competition, then a business
Choosing a promising market geography is only the entrepreneur’s first step towards opening a dealer company. How to become a distributor? It is necessary to pass a selection according to the criteria of a car manufacturer. The latter, as a rule, is interested in such information as the authorized capital of the dealer, characteristics of the sales center, information about the profile of the enterprise, and the business plan of the distributor.
In total, there are about 30 provisions. They are divided into four main groups: legal, financial, material and human resources. But this is only the first round of selection: then a complex negotiation process will follow, as a result of which the automaker will choose a specific dealer.
It happens that none of the proposals of the contestants suits the factory, therefore, the procedure is restarted. Often, entrepreneurs themselves do not understand how become a dealer cars in accordance with all the subtleties of the process.
This is exactly what happened in Omsk when the competition for the opening of an official representative office was organized by Skoda. Some manufacturers set a kind of trial period (as, for example, Volvo does), stipulated in the contract with the dealer who won the competition. It is worth noting that the distributor who shows that his image is fully consistent with the brand code of the factory-supplier of machines has the highest chances to win.
Entry Threshold High
Since the sale of cars is a serious business, the criteria for entrepreneurs to enter the market are much higher than in most other industries. This segment does not just fall. A businessman with high financial capabilities can become a distributor: the initial investment in a dealership can amount to millions of dollars, or even tens of millions (as was the case with Novosibirsk salons selling Nissan and Toyota brands). Apart from the "seed" investments, the business, in order to be competitive, will be forced to invest in advertising, and this, according to experts, is still about 200 thousand euros every year.
The dealership has a long payback period of 5 years or more. This indicator tends to increase over the years: the rate of profit, as the market is saturated, falls all the time.In Europe, for example, dealers gain about 2% from sales of finished cars. Significantly higher may be an indicator for auto parts - about 30%, and entrepreneurs should pay special attention to this fact. At the same time, there are not so many businessmen who are willing to work under all these conditions, especially in provincial cities.
Subtleties of arrangement
If the competition is passed and the money is found, then the next step of the entrepreneur is the organization of infrastructure. A workable dealer center includes a number of components. Firstly, it should be a parking lot, equipped with all necessary accessories. This object is the face of the dealer company and an important factor in successful sales.
Secondly, all the cars exhibited in the showroom should be brought to a shine: you will need a high-quality car wash. Thirdly, cars need constant care from the point of view of technical control: the dealer will need their own car service.
Fourth, since we have determined that the sale of spare parts provides the most profitability in this business, a separate store of this profile will have to be included in the infrastructure of the company. For each of the mentioned divisions of the dealership, it is necessary to hire qualified personnel.
We are optimally located
The geography of the location of the car dealership should be clearly thought out. How to open a distribution company with this factor in mind? The most important condition is the location of the company near the actively used highway. This is a general law for any market: the higher the consumer traffic, the better the sales.
Potential customers need to create conditions for convenient visits to the salon: that is, if there is initially no equipped exit from the highway, then the entrepreneur will have to build it himself.
The showcase of the car dealership must be directed towards the road where future buyers are coming from. That busy highway may not be in the city center: it is necessary to study the transport infrastructure of the streets and find a place where the traffic intensity and the costs of building (renting) a car dealership and adjacent objects will be optimally combined.
As mentioned above, the most important component of the profitability of a car sale business is after-sales service. It is fundamentally important to create conditions for a comfortable call to the center of two groups of customers at once - those who are traveling with the goal of acquiring a car, and who are paying a visit to the salon to buy spare parts.
Formalities
How to become a distributor and work legally? The entrepreneur will have to register as a legal entity. The best option is a limited liability company. The specifics of work in this status, however, is such that it will be necessary to deal with VAT, as well as with imputed income tax - this must be taken into account.
When applying for state registration, it is best to use the following OKVED codes: 50.10, 50.20, as well as 50.3. These values allow the company to carry out activities in the automotive trade, carry out maintenance of machines, repair them, and also sell spare parts, units and parts.
Be sure to note in the OKVED the most important code - 65.23.2. It means that the company will work as a dealer. It is important for an entrepreneur not to forget to register a company in a pension fund, as well as in extrabudgetary Russian funds.
The practice of the dealer business is such that paperwork will be required at the State Fire Supervision and the Federal Service for Supervision of Consumer Rights Protection and Human Welfare. The next steps are opening a cash settlement account with a bank, purchasing KKM and other equipment of this profile.
And finally, you will need to go to the Consumer Market Office to enter information about the company in the trade register, and then get a certificate there. Perhaps you need certificates for work in auto repair mode - they are issued by Rostest.How to become a car dealer and successfully go through all these complex procedures are issues that are very relevant for entrepreneurs.
We select suppliers
The business plan of the distribution company should, first of all, include provisions regarding the price segment in which sales will be conducted. Actually, the more expensive the brand will be, the higher the degree of its promotion, the more significant will be the amount that an entrepreneur will have to invest in a business. From time to time, a car dealership will have to bear the costs associated with certain brand requirements regarding a business strategy.
It is perfectly acceptable to start sales with low-budget brands of cars, then, as soon as demand is detected, switch to more expensive ones. The option of combining several brands in one salon is not ruled out. It must be borne in mind that some manufacturers are very picky about the marketing policies of dealers, like to advise what and how to do.
The methods of foreign brands may differ from those that are typical for Russian firms, but our entrepreneurs think more and more often about how to become a dealer of a foreign company. Demand for cars from abroad among Russian citizens is growing at an impressive pace.
Why a Honda?
Cars of this Japanese brand fit perfectly into the Russian market. Firstly, Honda cars have increased wear resistance of parts - much higher than, say, most Chinese foreign cars, gradually flooding car dealerships in our country. The metal quality of the "Japanese" is consistently high. Honda is one of the world's largest car engine manufacturers. This brand is a leader in technology and the level of development of various mechanical components.
Many Honda cars have reduced gasoline and engine oil consumption. The engines of this manufacturer are very easy to start, meet the latest environmental standards. An extensive network of branded services “Honda” is one of the largest in the world, and the car dealer will not have problems with the supply of original parts for their stores. But before deciding how to become a Honda dealer and adapt a business to selling cars of this brand, an entrepreneur needs to find out if the Japanese are suitable for the market in a particular region.
Where to buy cars?
The easiest option is to find suppliers in the country where the cars are made. However, under this scenario, the dealer will have to work on logistics himself, to exercise control over the delivery channels of transport from the factory to the salon.
Among the mandatory procedures that an entrepreneur must undergo are the purchase of insurance policies for automobiles, registration of cars at customs, and payment of all necessary fees. To optimize the work in this direction, the dealer can create a special structure within the company, which is engaged in the delivery of the sold vehicles from the factory.
For many businessmen, it’s not entirely clear how to become a distributor within the framework of this scheme, and they prefer another option - outsourcing, that is, they find a company ready to do the same with payment for specific types of services. Choosing such a company, you need to make sure that it has a license to carry out transportation, has certificates of compliance with the requirements of Euro-2 and, as a rule, Euro-3. You will also need a document confirming the status of the company as a licensed customs carrier. Another purchase format is from an official importer. This greatly simplifies the work of the dealer. The only question is to find a competent company in this field.
