Motor parts store business plan template for the Philippines

Executive summary

[Store name] Motor Parts will sell motorcycle parts, oils and accessories from a [size] square metre store on [road], [city], near [tricycle terminal, motorcycle dealer or highway junction]. Focus: fast-moving parts for the most common motorcycle models in the area, plus helmets, tyres and lubricants. Owner: [name]. Staff: [number] sales clerk(s) who know parts.

Capital needed: ₱____ (shelving and display ₱____, first inventory ₱____, lease deposit ₱____, signage ₱____, permits ₱____, reserve ₱____). Funding: owner ₱____, supplier credit of ₱____ on [days] terms, loan ₱____.

Stock plan and suppliers

Start with the parts that sell every week: [brake shoes and pads, chains and sprockets, spark plugs, oil and filters, cables, bulbs, tyres and tubes]. Match them to the motorcycle models you count on your road. Keep slower items (body parts, engine internals) as order-on-request until you know demand.

Suppliers. [Distributor 1] for genuine parts, [distributor 2] for replacement brands, [distributor 3] for oils. Note minimum orders, delivery days and credit terms. Keep supplier invoices: they show where every item came from.

Second-hand parts. If you plan to sell used parts or goods bought from an unlicensed dealer or supplier, the Anti-Fencing Law (PD 1612, Section 6) requires a clearance or permit from the local police station commander before you offer them for sale. Many stores simply sell new stock only. Decide and write your policy here.^[4]

Riders and other parts stores

Answer these from your own count and conversations:

Example fill-in. "On [road], [number] motorcycles passed per hour at [time] (our count on [dates]); the most common were [model 1], [model 2] and [model 3]. There is a tricycle terminal with about [number] units at [distance]. The nearest parts stores are [store 1] at [distance] and [store 2] at [distance]; riders told us they often run out of [part]. We will stock [gap], open at [time] for early-shift drivers, and offer [free installation of small parts / loyalty card for TODA members]."

• Which motorcycle models pass your store most often? Count for an hour on three days.
• Are there tricycle terminals, delivery riders or dealers nearby?
• What do riders say is often out of stock at other stores?
• What do nearby stores charge for common items like an oil change kit or brake shoes?
• Would riders want installation while they wait?

Running the store

Price tags. DTI requires tags, labels or markings showing the price of consumer products sold at retail, and cites fines of ₱200 to ₱5,000 or one to six months' imprisonment. Tag every item on display, including small parts in bins.^[3]

Inventory. Use [notebook / spreadsheet / point-of-sale app]. Count fast movers weekly, everything else monthly. Reorder when stock hits [number] units.

Adding repairs. If you install parts or service motorcycles, check DTI's service and repair accreditation. DTI's own page names the category "Motor Vehicle, Heavy Equipment" and does not mention motorcycles by name, so ask your DTI provincial office whether it applies to you. Accreditation, where needed, is valid for one year and renewed by 31 January.^[5,6]

Registration and permit costs

For the general steps, see the registration guide. DTI's business name fee is ₱200 to ₱2,000 depending on scope, plus ₱30 documentary stamp tax. BIR has not charged a registration fee since 22 January 2024.^[1,2]

If DTI tells you accreditation applies, its Fair Trade Enforcement Bureau lists One Star at ₱50 filing plus ₱350. The police clearance for second-hand goods has no published fee in the law.^[7,4]

Financial plan

The DTI (₱500 plus ₱30) and BIR (₱0) figures are published; everything else depends on your suppliers and location.^[1,2]

Sales and margin. Average sale ₱____ × customers per day [number] × days [number] = ₱____ per month. Gross margin by category: parts ____%, oils ____%, accessories ____%.

Stock turns. Inventory value ₱____ ÷ monthly cost of goods sold ₱____ = months of stock on hand. Aim to keep money out of slow items.

• Shelving, bins, counter and display ₱____
• First inventory: parts ₱____, oils ₱____, accessories ₱____, tyres ₱____
• DTI ₱500 + ₱30; BIR ₱0
• Barangay clearance and mayor's permit ₱____ (set by the barangay, assessed by the city)
• Optional: DTI service and repair accreditation ₱50 + ₱350 (One Star), if it applies
• Monthly: rent ₱____, electricity ₱____, clerk ₱____, restocking ₱____, supplier payments ₱____

Risks

Inventory is where parts stores lose money. Plan around it.

• Dead stock. Buy small quantities of new items first; return or discount slow movers.
• Counterfeit parts from a supplier. Buy from authorised distributors and keep invoices.
• Buying stolen parts. No second-hand purchases without the police clearance and a record of the seller.
• Online sellers undercut you. Compete on having the part today, correct fitment advice and installation.

Motor parts store permits and fees

Questions people ask

Can I sell second-hand motorcycle parts?

Yes, but the Anti-Fencing Law requires a clearance or permit from the local police station commander before you sell goods from unlicensed dealers or used articles.

Do I need DTI accreditation to sell parts?

Not to sell parts. Accreditation covers service and repair work. DTI's page names motor vehicles, not motorcycles, so ask DTI if you plan to install or repair.

What happens if I do not put price tags?

DTI cites fines of ₱200 to ₱5,000, or one to six months' imprisonment, for missing price tags on retail goods.