There are many retail property options for an automotive business. Before you make your final choice, consider your future investment’s location wisely. Different factors will affect your business depending on the type of auto-related retail property you own. While one location choice may be near a busy major intersection with some additional space for growth, consider your neighbors. How close are your direct competitors? It may be savvier in the long run to consider other options that are similar traffic-wise, but near non-competing automotive retailers.
Here are some reasons that will determine the which retail property you may ultimately purchase:
- If you are an automotive parts store, your retail property may benefit when in proximity to a dealership. Why? While some factory parts are best purchased from the dealership, customers will seek other parts for cheaper rates. Be the first take advantage of this opportunity and establish your non-competing business in the same neighborhood as a dealer.
- According to Phoenix Center for Advanced Legal & Economic Public Policy Studies, T. Randolph Beard, George S. Ford and Lawrence J. Spiwak (2015), a dealership can maintain a more competitive pricing strategy the further they are away from their direct competitors. For example, Honda increased the distance between their dealerships by thirty miles. In doing so, it was able to leverage their car prices by about $500.
- If you’re a retail property that sells parts or one that sells cars, being in the same neighborhood as a repair shop can help your business. Yes, even dealerships that offer repair services. Consider this scenario: Your dealership is slammed with repairs on a certain day. You have an angry customer who demands service sooner than you can commit. You’ll make them happier if you refer them to the repair shop that is able to help them on the same day. They’ll remember you for meeting their demands and more likely to buy a car from you (again), or at least not badmouth your business on Yelp.
Our knowledgeable automotive retail property team at Menlo can help you choose the perfect lcoation for your automotive business. Contact us with any questions at 480.659.1777 or email us – firstname.lastname@example.org.