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How to start a Servo oil dealership in India?

Starting a lubricant oil business in India is not a tough task. There are already well-established Engine oil brands in the country like Castrol, Servo, Shell, Gulf, Mobil 1, Motul, Veedol, etc.

In this article, we will give you complete information about the Servo oil dealership. This article contains all the topics related to the Servo dealership, which includes Servo oil dealership cost, profit margin, shop space required, licenses, and registrations, whom to contact, etc.

Servo oil dealership

Why choose Servo oil dealership?

As we know servo is owned by Indian Oil. Indian Oil is India’s largest government-owned oil corporation.

Indian Oil launched Servo in 1972. Today Servo is India’s largest selling lubricant brand.

Licenses and Registrations Required

These are the licenses and registrations required to open a Servo lubricant oil dealership in India.

  • Company Registration – Sole proprietorship/LLP/Pvt Ltd
  • Trade Licence – from your local municipality
  • Shop & Establishment Registration – from the state government
  • GST Registration
  • Previous bank statement / Income Tax Returns Returns
  • Business Insurance if required

Servo dealership cost

servo oil dealership cost

You need approximately 4 to 6 lakh rupees to start a Servo oil dealership.

The actual investment amount mainly depends on the quantity of inventory/stock that you are going to buy at the beginning

Other factors like whether you have your own shop or not and the lubricant oil varieties you are going to sell also alter the total cost.

Here is the break-down of the above-said amount,

  • Dealership Security Deposit -> 1 lakh to 1.5 lakhs
  • Initial inventory purchase -> 3 to 4 lakh rupees
  • Shop Interior -> 25,000 (racks, computer system, Signage board etc)
  • Equipments -> 20,000 rupees
  • Shop Advance + First-month Rent -> extra (if you do not own a shop)

The working capital required is employee salary, utility bills, adding stocks, shop rent, etc.

Profit margin in Servo oil dealership

From the Servo dealership, you can expect a profit margin of 15% to 25%.

The profit margin in the Servo oil dealership is directly proportional to the number of sales you have made. i.e If you make more sales, then you will be able to gain more offers and bonuses offered by the company.

The company offers these bonuses & schemes after 6 months to 1 year after you have opened your dealership. If you succeed in meeting those sales targets then you can expect up to a 30% profit margin.

Almost all Engine oil brands offer special schemes like cash discounts, quantity discounts, product discounts, & outstanding balance nil, etc.

Space required for Servo Dealership

You require a minimum space of 150 to 300 square feet shop area to open a dealership. Make sure that your shop has good connectivity.

servo dealership

How to get Servo oil dealership?

To get a dealership, first, you need to contact your area’s Servo sales manager. You can get his number by calling the Indian oil toll-free number 1800-2333-555.

You can also contact them at their official website.

Once you contact the brand, they will be in touch with you and if you are eligible, then help you in launching your dealership.

Your eligibility for the Servo oil dealership mainly depends on factors like the density of other Servo dealers in your area, your experience in trading, your shop location, and your financial background, etc.

FAQ about the dealership

How much space is required to start a Servo dealership?

You require a minimum space of 150 to 300 square feet of shop space

Investment required to start a Servo oil dealership?

You need to invest around 4 to 6 lakh rupees

What is the Profit Margin in a Servo oil dealership?

You can expect a profit margin of 15% to 25%

How to contact Servo for the dealership?

You can call their toll-free number 1800-2333-555.

I hope this guide to ‘Servo oil dealership’ will help you get started. If you have any additional suggestions, feel free to mention them in the comments section below. If you like this article then kindly share it with your friends.

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