Prior to the public announcement it was going to sell BFGoodrich tires online, Michelin North America Inc. informed its dealers of the news. After Mary McLaughlin, owner of Independent Tire & Auto Inc. in North Andover, Mass., read the email, she had strong feelings about Michelin’s strategy. She shared both the email and her response to Michelin with us.
“As you know, today’s consumers want the ability to shop for tires anytime, anywhere. In order to meet this growing demand, Michelin and BFGoodrich will be launching an online tire sales program giving consumers the ability to research and purchase tires, as well as schedule an installation appointment, all at once online. In addition, this experience will enable consumers to shop for tires that not only fit their vehicle, but also the way they want to drive.
“The program will first launch on BF-GoodrichTires.com in fall 2016, starting in the Charlotte, N.C., area. The process of rolling it out nationally, and including MichelinMan.com, will begin later in 2016.
“How it works is simple. When a consumer makes an online purchase, they will request an installation appointment with a local service partner. We’ll then ship the tires to the service partner, where the tires will be installed. For every confirmed installation, the service partner will receive installation revenue and a commission. Service partners will also have the opportunity to receive a bonus commission for positive consumer experience ratings. All authorized Michelin dealers are eligible to become service partners.
“With this new approach, our goal is to simplify the tire-buying process for consumers, as well as provide our service partners the opportunity to attract new consumers. Several million visitors visit BFGoodrichTires.com and MichelinMan.com each year, and more and more consumers want to buy tires online. By selling online, we can now direct these consumers to our service partners who, in addition to compensation for installation services, can earn additional revenue for add-on services.
“As the launch approaches, we will be providing you with more information about the program and how to sign up. In the meantime, please contact your account manager with any questions you may have. We feel that with this online sales program, together we can deliver an exceptional experience for consumers who would like to purchase online. We appreciate your support in responding to this consumer need.”
Marc Pasquet, Vice President of Sales
Michelin Americas Small Tires (MAST)
McLaughlin replied in a letter:
“Marc, I received your email today about selling Michelin tires directly to the public. I am very upset over the decision to do so.
“It is not enough that tire manufacturers sell to the big chain stores. We, as independent dealers, have to compete with the chain stores, with the MAST rules of where we can buy tires or we get penalized. How are we supposed to make a living?
“Anyone can ship tires, the hard part is finding someone to install them. In today’s world where no one wants to work this presents a problem. I get a smaller piece of the pie, yet I still have to have equipment, employees, insurance, etc. I am sure you will have a standard price we will have to charge for installation, which will not be what any of us would normally receive for such services.
“My feeling is the tire manufacturers use us to get your products out there, and then throw us to the curb. I am also sure we will wait longer for our money than if a customer paid us for the whole sale. If I need tires that my AAD dealer has to order from Michelin, I pay a shipping charge. I am sure Michelin will factor this in when selling to the public and make their deal sweeter by going through you. When Goodyear started their program, I refused to become an installer. Sure, I lost some business, but those customers were not coming here anyway. My company prides itself on our ‘service’ and if it is all about the bottom line and not the ‘value’ of their purchase then I do not want them as customers.
“I truly believe you will see a drop in dealers and we will not be so quick to help with warranties. Why should I tie up my money and time helping your customer?
“I have a perfect example of this to share. A consumer from my town ended up going to BJ’s to save $5 per tire on Michelins. Two days later he comes into my shop with an impact break on a sidewall and said Michelin sent him to me. I said go back to BJ’s where you bought them. He told me they do not warranty the tires, I am the closest Michelin dealer. I explained to him that I was only $5 per tire higher than a national chain and I include free tire rotations and free flat repairs. For that $20 I would have picked up the phone and asked Michelin for a goodwill adjustment on your behalf. But as I explained to the customer, you did not purchase the tires from me, so there was nothing I could do for him since it was a road hazard.
“I realize money is tight all across the country, but people need to get back to value, not price. I can’t tell you how many sales I lost to chain stores, but once they realized it wasn’t such a ‘great deal,’ I got most of them back. I still had to wait an average of two to three years.
“Michelin should be pushing the loyalty of its independent tire dealers where we would all make more money instead of hopping on the chain mentality of hit them hard, hit them once, we don’t care if they come back. We, as independent dealers, do care if they come back and want them back.”
Mary McLaughlin, Owner
Independent Tire & Auto Inc.
North Andover, Mass.
More comments from dealers
Well, where do I begin? There are so many programs that are killing the independent and now they are just adding another one.
Around the Wheel and Ford selling 4 million tires and all of “my” brake jobs and cabin filters.
How about the fact that the car dealers do not ever want to warranty tires and they try to send them to us? Must be in the training from the tire companies.
Michelin’s obvious involvement with Dealer Tire...
The Porsche dealer pricing through The Tire Rack on Michelin N Spec tires is so far below our cost it is scary.
BJ’s, Sears and Costco Michelin pricing. Oh, they work on short margins. How about they buy better than any deal we have the opportunity to see? I know those don’t really exist.
I know the Goodyear dealers complained and now are installers, so if the Michelin dealers “roll over” and allow this to happen every other manufacturer will follow.
Guys you have to say NO and let them build their own stores and they can do the work.
This is a cash flow killer for all of us. They will pay you with credits. Great. Have you ever tried to pay your employees or rent with credits?
Say no and maybe they will get the hint.
Barry Steinberg, Owner
Direct Tire and Auto Service
Great, so now the Michelin is the competitor to the local shop. The local shop doing the install will receive an as of yet undetermined fee for doing the install with the hope of staying afloat through upselling the customer once they get in the shop. Thanks for nothing, Michelin.
Blake Breeden, Owner
Boulevard Tire & Service
Kansas City, Kan.
As an independent dealer, I will be re-evaluating my association with Michelin.
Michael R. Smith, Owner
Woods Inc., dba Mike Smith Tire Pros, Lumberton, Texas
Woods Tire and Auto, Sherman, Texas
Question of the month
Each month we ask members of our National Advisory Council (NAC) a question or questions on a current hot topic. In August we asked: “It’s now down to Donald Trump and Hillary Clinton. Do you feel one of the candidates is more small business friendly? How do you feel the outcome of the election will affect your business? Who are you going to vote for and why?” Here are some of their responses.
1. Religion and politics are two combustible subjects that I learned years ago not to discuss in public. Having said that, and since names are withheld here, I feel free to say that our economy needs a change! The current Obama administration has hamstrung business to the point where 1% to 2% growth is considered the “new normal.” It’s evident that businesses have withheld from investing in growth development activities due to so many policies of this administration. Even former President Bill Clinton acknowledged this spring that the past eight years of leadership have negatively impacted our economy. I’m not sure that Donald Trump is the answer, however, our economy needs some type of change.
2. I am scared to death!!! With the population of the U.S. it is amazing we can have such terrible people running for our presidency.
3. Trump all the way. I have always said that with a budget of trillions of dollars each year the government needs a businessman or woman to run the country. It seems our politicians do not know basic economics. Fifteen percent business federal income tax, I’m for that!
4, Let’s face it, love him or hate him — small business loves him. Trump is different. He’s funny. He’s fresh and interesting, and he may even be a little crazy. But he’s taking a serious run at the presidency. There are between 20 million and 30 million small businesses in America, and they employ more than half of the country’s working population. Statistics also show that, in the last 20 years, two out of every three new jobs created here were created by a small business. This is a critical block of voters for any presidential candidate. And right now, Donald Trump is winning us. And for one big reason: Donald Trump is relatable. We know Donald Trump. Trump’s bravado, honesty and straight-talking is not what you get from a typical politician, is it?
Join Modern Tire Dealer’s National Advisory Council
Each month, Modern Tire Dealer is guided and influenced by a select group of readers — members of our National Advisory Council. These members’ opinions are the heart of the monthly Your Marketplace column, compiled by industry analyst Nick Mitchell. If you’d like to join this prestigious group, please let us know. We’d love to hear from you. Contact Editor Bob Ulrich at Bob.Ulrich@bobit.com or call (330) 899-2200, ext. 11.