Hello,
I’m fairly new to BCP and have mostly lurked, off and on over the last year. I had bought a 180, which was short lived, then got a 185 in June of last year. I live in the NW, Wenatchee, WA but am most likely going back to Seattle within the next year. I had a different life working in aviation for quite some time but had the opportunity to buy into a business in a slightly more stable industry nearly four years ago. I did not have a lot of experience, nor do I now, flying in the backcountry but I chose the 185 because of the ability to do so, which I hope to expand. It also gives me the versatility to get around; with everything and everybody I need for work.

Anyway I was hoping to conduct a little informal survey. Some of you may have seen the ad in Barnstormers but there is an aircraft salvage and parts business for sale about two hours from where I currently live. I’ve looked at it, the numbers aren’t great but for some reason, possibly the blinders that go up every time I look at an aviation business I see a real opportunity. Not just a financial opportunity, which is always a greater risk in GA, but an opportunity to make a bit of difference by providing parts, and ideally rebuilt aircraft at lower prices, hopefully in the long run making GA more accessible to others.

So after a blathering introduction do you guys look for used parts when you need replacements? How do you go about your search? What are the regs on this I’m missing? What is the most important concern you have when looking for parts, I’m guessing quality but price has to be up there?

I’m just beginning this diligence process and trying to educate myself as best I can so any and all information/opinions are appreciated.

I hope to make an event or two and meet some of this group in person. I look forward to getting out of the shadows a little on BCP.

Thanks a lot!
Dion

I'm not sure, but looking at your avatar, I think we're flying the same plane..............

Looks like the same paint scheme as mine also! No STOL fences on mine though, and the registration starts with C on mine!

Re: used parts. Forget the refurbishment side of the business. You'll learn fast that you can turn the money you paid for the salvage into cash faster and with better margin by just selling the parts. By all means, consolidate the parts into projects and try to sell viable projects, but you won't like the time it takes to sell completed projects after you pump a bunch of cash into them.

As for used parts, I'm very much in favour of buying used, and have on occasion. Why don't I do it more often? I like to find the parts on-line and order them after hours by credit card. This is a hobby for me, and work days are for work. Even NOS parts from Preffered. I don't shop with them as often as I should because they don't list all their inventory on line.

I tend to buy things like batteries, bulbs, tires, plugs, filters, oil, motor mount isolators, the most. Not things you would buy used. What I'd like to be able to buy more of in the used area are STC mods. Some of these are not really easily transferable to other airframes, but most are nice, but not at the price. For example. Find me a deal on all the parts and paperwork for a Tornado Alley turbo kit for my 185 and I'm a buyer. Find me a good Cleveland tire and brake upgrade and I'm a buyer. This stuff will be rare finds in your business, and sold before I find out you had it.

I often google a part number to find a good price. I often find listings on Controller that are great to compare. If you had your listings there, buyers could readily see the savings.

Summary: on line listings, exposure, advertising, etc. are where I would concentrate my efforts if I had a similar business. Even making your security cameras accessible so folks can see the inventory in your yard and warehouse would be cool.

Thank you for the feedback. The paint schemes on both posts are definitely similar.

I think you're spot on regarding the refurbishing. To me that would be the fun part but in terms of a business it doesn't seem to serve the bottom line very well at all. Flipping damaged planes to bring down entry costs for new owners may be a pipe dream.

From what I have seen there is very little to no advertising nor used parts companies that have a good search and inventory display function. That leads me to think there is an opportunity or hole to fill but then again is there a market for the parts at all, is that why there are so few used parts options? Specializing and salvaging those STCs is an interesting concept.

Thanks again,

There are a whole lot of used parts on my airplane. In fact, I'd have to say it's a complete assembly of used parts!

But seriously, when something needs to be replaced, neither I nor my IA have any hesitancy to look for good used instead of paying outrageous prices for new to put onto a 53 year old airplane. I'm fortunate, because Beegles in Greeley is so close that I have to drive past to get to my hangar. If they don't have what is needed, they can get it, or they know who has it, or they can make it, and their prices are, if not reasonable, than at least acceptable.

Obviously some things are better purchased new, because used ones have already used up much of their useful life, and it takes just as much labor to install a used part as a new part. But there are plenty of used things which are just as good as new. So there's sure a market. Whether that market is big enough to be able to be profitable, I haven't any idea.

Cary

Thank you Cary, good information.
Yeah it seems Beegles is the most well known/advertised facility like what I'm looking at in West.

Dion

Dion: Most long lasting, used plane parts businesses I know of are in high and dry dessert areas.

As far as searchable or inventory listings go try: http://www.texasairparts.com

Just thought I'd give you a look at one competitor.
Edit: An article on (starting) an aviation business history: Hope I got it all.

http://www.aviationpros.com/article/103 ... n-business

GoCougs wrote:
From what I have seen there is very little to no advertising nor used parts companies that have a good search and inventory display function. That leads me to think there is an opportunity or hole to fill but then again is there a market for the parts at all, is that why there are so few used parts options?,

There's a few out there but they usually need an exact P/N to search their inventory. Yeah it would be nice to put a generic/common name in a search box and have the item or matching items show up WITH the PICTURE so you can see what your getting, but It would require a TON of your time and effort to compile a list of parts for the hundreds/thousands of different types of airplanes. It would probably be best to own your own Search Engine device linked in also. That's a LOT of information to store.

On that note IMO if that certain company producing new PMA parts could drop their prices 50-60% they could up sales big time and still make a profit. That way us "poor guys" don't have to go scrounging for affordable used parts...

wannabe,
Thank you for the links. Texas Air Salvage is who I've compared a lot of parts prices with, they seem to be one of the better businesses out there in the industry. Have you purchased anything there? If so what was your experience?
Thanks,
Dion

AKJurnee,
The amount of work, just in terms of time, at least in the first two years would be astronomical. Especially when you consider how the businesses inventory is organized now. It's not, most everything is just in piles. It's tough to decipher what parts are in high demand and what parts haven't sold since the 90s. So there is a high workload but hopefully once it was organized and online I could hire a manager as this wouldn't be my primary business. That too is one of my concerns, is this the kind of business you need to focus on 24/7 or can it be a second business with the right processes.

Thanks,
Dion

Here's my take....forget about it being aviation-related and just approach the purchase of this salvage outfit like any other business deal. Would your monthly/yearly debt service be, and how much profit do you have to make to meet it-- plus pay any employees, pay yourself a reasonable wage for your time, AND make a reasonable return on your initial investment? And how much in sales do you need to make that profit?

Down time is a big deal for me. I'll happily buy used if I know exactly what I'm getting and that it's up to par, but I'd much rather pay more money and get a part I know will work than fiddle-phuck around for weeks trying to find a salvage part that may or may not work out.

Used parts might save money, but my take on it is that airplanes are expensive even when they don't fly, so if the plane is grounded for a part I want to replace that part ASAP, and price be (somewhat) damned.

Just my perspective on it.

I'm editing to add some more relevant opinion beyond the business logistics.

I've been searching for a Lycoming 540 core that meets some specific model criteria for over a year. What would have been helpful is allowing me to define detailed search with criteria, and having a detailed enough database that you can send notification to customers when inventory arrives that matches their subscribed search. Otherwise, it's daily checking of the usual suspects: eBay, Craigslist, Barnstormers, salvage sites, etc.

If you could set up a master service for referral for other salvage sites, like MLS for aviation a parts, and provide the prior mentioned search subscription, that could be huge.

Spend $150K to get a good enterprise grade ERP system set up so you can provide a quality e-commerce solution, order fulfillment, invoicing and accounting, and inventory tracking for the inevitable returns. Customers tend to value more than anything a positive experience with a retailer, it doesn't matter what the product is unless it's used merchandise. With new parts, customers can blame the manufacturer, but with used parts, accurate representation of the items with good photos and descriptions is critical. There's a significant effort associated with that.

Then, you have the whole inventory procurement phase. Are customers trading stuff in? If so, where's your revenue? Are you traveling around to auctions and procuring inventory you think will sell? Are you working with insurance companies?

I'd say if the company for sale doesn't have a solid framework for accomplishing all of the above, and any of their success depends on one or two individuals and their experience, then it's not a safe buy.

/peanut

Zzz- the service you are referring to is called PartsBase. At PartsBase.com
It's pretty good service and allot of salvage and avionics shops list their inventory on it. I have used it a few times, finding used or nos parts with success.
I would actually use it allot more but their subscription sales guy heavy handed sales tactics pissed me off.

As a guy who is trying to rebuild a basket case 185, I can tell you that if Skywagons are your thing you should be very concerned about the rising costs of parts. In the few years that I've been at it, I have watched used parts skyrocket! These things are becoming more and more rare and consequently parts costs continue to soar. In my opinion, the availability of parts and their associated cost will push the "common man" (like myself) out of the ownership game in the very near future if we don't find a way to mitigate the exponential increase. It now costs 14-20k just to put a set of used cowls on the things! Gear legs are north of 10K and single bulkheads/skins can set you back thousands!

What we need is and F. Atlee Dodge of the Cessna world to step in and save the day! Unfortunately, with the limited number of Skywagons flying (relative to cubs), I fear the return on investment isn't there to drive somebody into that business.

I realizes that your question wasn't geared directly to Cessna taildraggers, but if this salvage company you are looking at is stocked with them it might not be a bad investment! If it isn't and you decide to go into the business of stamping out vintage Cessna parts you would be my new best friend in very short order!

I have a lot of coin in used parts that aren't flying off the shelf. It is a tough business that is WAY saturated right now with folks buying up wrecks via insurance auctions and old shops closing down and Starman auctions etc. Just look on eBay and you'll see a ton of options for buying stuff. Beegles actually has a few guys that do the ebay thing full time. (username BASPARTSALES).

I'm not saying you can't make money, but it is tough right now. If it was my full time biz, I'd be hurting. My girlfriend handles all of my eBay sales and we sell something every day or 2, but a lot of times its a $10-20 sale. She got bored with airplane parts, so now if its not bolted down around the house/hangar, it gets listed. The control surfaces and props and big airframe parts sell every 2-4 weeks, which is fine with me because I have to build a crate to make sure they get there in one piece.

My first year in the airlines, I made more on eBay selling truck parts out of a junkyard than I did at the airline. Today is entirely different. Ebay is so saturated you have to get creative with marketing, plus the costs there to sell stuff are significantly more than 12 years ago.

Thank you everyone for your feedback. It’s much appreciated. I can see where there is a market the for owners like myself who have a tight budget on the whole flying thing. I can put the money into an inventory system and put a good search and sales site together but the risk is in market size.

Aeropod, you’ve definitely raised my eyebrows. I’m not in this industry and in my initial research I was not so much concerned by a saturated market. I actually thought it was a bit of a niche. My concern has been demand, with the number of GA pilots/owners becoming a smaller pool by the year. My thought process was, even with the smaller numbers you wouldn’t need a huge conversion rate on the market out there to make it a nice little side business.

I’m curious to how you are advertising, or seeing others advertising. What are the creative ways companies are doing so? Am I missing something with this? If there are 30,000 high wing Cessnas out there of all makes, not including other brands, how is the market saturated by five or so companies that come up online? I know not even close to all those planes are flying, that's what I thought the risk was. Those companies have all the high demand parts?

If the salvage business is for sale, and not just the buildings and/or inventory, you should be able to check the financial statements for the last several years to see how they've been doing. Of course, books can be cooked, but that should give you some idea of profitability.

GoCougs wrote:Aeropod, you’ve definitely raised my eyebrows. I’m not in this industry and in my initial research I was not so much concerned by a saturated market. I actually thought it was a bit of a niche. My concern has been demand, with the number of GA pilots/owners becoming a smaller pool by the year. My thought process was, even with the smaller numbers you wouldn’t need a huge conversion rate on the market out there to make it a nice little side business.

I’m curious to how you are advertising, or seeing others advertising. What are the creative ways companies are doing so? Am I missing something with this? If there are 30,000 high wing Cessnas out there of all makes, not including other brands, how is the market saturated by five or so companies that come up online? I know not even close to all those planes are flying, that's what I thought the risk was. Those companies have all the high demand parts?

I'm selling a bunch of used control surfaces. Some are airworthy, a bunch are cores. It's tough because how often do you need an elevator for your 172? When most flight schools need one, they go to the source they've been using for years (preferred, white industries, dawson, texas air salvage, faeth....to name a few), they generally don't shop much. The folks I sell to typically aren't commercial operators, they are guys who own an airplane, probably doing a bunch of their own maintenance, and have an ugly (not necessarily unairworthy) part. They want a core to rebuild when they have time. The commercial operators don't have time for shopping too much, they need a part to get back in the air, because it doesn't make money sitting on the ground. They've developed their relationships with someone, and they stick to them.

Search on eBay for just about anything cessna and you'll come up with 30-40 sellers. The only way I've found to compete is price and shipping time. Most items I sell are shipped within 12 hours, bigger items usually have to wait until I'm home from the airline job to crate.

Creative marketing is easy in the social networking world. I am a member of a ton of type specific groups on Facebook. If I have something specific to sell, I hit up that group. If I see someone has a need that I can fill, I send them a message. I was ready to get rid of Facebook because I dislike it from a personal standpoint, but then I started selling pods. That's just one example of getting my stuff out there. Most groups welcome it if you're not too obnoxious and show a genuine interest in keeping their old airplanes running.