Is there a need for this niche?

I think you know this is a niche and that is a good start, but I think we live too far into a "throw away" culture now. When something is broken a lot of peoples first instinct would just be to replace the whole thing. I had a friend way back in the day that would make metal tool repairs and replacement parts. He told me any time he makes one part, he would make 3 more to have on hand when the next one breaks on someone else. He was doing well with that as a side hustle but this was back in the late 90's and cheap Chinese replacements hadn't fully taken over.

I like the idea and would consider using it for a few of my tools if they went down, but mostly I would be replacing the whole tool and maybe salvaging some parts for later.

I personally wouldn't consider this as my fulltime business, but something to do when the work comes around would be awesome to offer.