October 19, 2009
'Revenue heals all wounds'
Cupedro holds prices, pushes used tires to survive hard times
By: Mike Manges
“We try to get as much business as humanly possible, but we have to be competitive, too,” says John Cupedro, president of Economy Tire Service Co. Inc., a truck tire dealership in Cleveland, Ohio.
"I didn’t realize how good it was back then,” says John Cupedro of the early 2000s. “I don’t think anybody realized how good we had it.” The commercial truck tire business was booming at the time, according to the president of Economy Tire Service Co. Inc. (ETS) in Cleveland, Ohio. ETS, a single location dealership, was enjoying year-over-year growth.
That all came to a screeching halt during the third quarter of 2008, when the national economy began to tank.
“Suddenly I’m driving around making sales calls and I’m seeing tractor-trailers up on blocks. A lot of trucking companies just disappeared entirely. By the fourth quarter, we were feeling it.”
ETS is still feeling the pain, says Cupedro. Construction fleets, which comprise the majority of his company’s commercial tire customers, are idle. “Clients are dropping like flies.”
Meanwhile, the dealership’s competitors have gotten hungrier. “It’s a lot more intense.”
Pennywise but pound-foolish?
When it became clear the economy was headed toward full-fledged recession last year, Cupedro took action. He laid off two service techs in December. Three other employees took pay cuts. (ETS currently employs six full-time people, plus Cupedro’s father and ETS founder, John Cupedro Sr., who works on a part-time basis.)
Cupedro also realized that in order to survive he would have to hold his ground on price. When it comes to service, customers are demanding more, he says. But when it comes to price, they expect to pay less.
“I used to think customers were all about price in the past,” he says, almost with an air of nostalgia. “Well, it’s gone to a whole new level. The things that used to make sense, like cost-per-mile, are out the window. Now it’s ‘What’s the cheapest thing you got?’
“People are stepping over dollars to pick up pennies. They think they’re saving money buying cheaper tires, but they aren’t. I tell them I understand that cash flow is rough, but they’re not doing themselves any favors by buying the cheapest tire available.”
The problem, says Cupedro, is that there are plenty of truck tire vendors in the Cleveland market who will do anything to make the sale.
“So many clowns out there don’t know a tire from a tire iron and are going to sell as cheap as humanly possible. My intention isn’t to be the cheapest guy. I want to be the most expensive guy, as long as I get the order!
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