Since announcing its intention to sell tires online, Goodyear Tire & Rubber Co. says the response from its dealers has been "overwhelmingly positive."

That is not my impression based on dealers who have contacted Modern Tire Dealer since Goodyear held its 2015 Dealer Meeting in Grapevine, Texas. Even one of the dealers who told me he will join the program isn't sold on the idea.

To recap, Goodyear will begin selling tires on goodyear.com later this year. Dealers who sign up to be preferred installers will get to keep the installation fee and receive a delivery fee for their troubles. It's sort of like a national account program.

When consumers buy tires on Goodyear's website, they will be directed to the closest preferred installer, regardless of whether or not the installer is a Goodyear company-owned store, says Goodyear. Any "authorized Goodyear dealer" can become a preferred installer.

Goodyear began testing the program in 2012, and leading up to the meeting, already had signed up 1,100 dealers, including company-owned stores, to be preferred installers. To date, that number is closer to 2,800, according to the company.

Goodyear claims anyone who climbs on board will come face to face with plenty of new consumers based on these test results:

* Nearly 60% of the consumers who purchased online were new consumers to the installing location.

* The additional service that accompanied the sale accounted for, on average, $280 in incremental revenue.

* Following the installation, 38% of these new consumers returned to the installing location for more service, and that additional service bill was, on average, $749.

Charley Gowland was not convinced. Owner of Chabill’s Tire Service LLC, a 14-store retail and commercial chain based in Louisiana, he sent out an open email to Goodyear to publicly pass on the program. He told me he has received an outpouring of support for his views.

Here is Gowland's email in its entirety.

"Why in the world would I want to sign on to a program that spells eventual doom to a large part of the profitability of my business? All you people are going to accomplish is to set in motion the need for other manufacturers to follow suit with direct to consumer programs for 'competitive' reasons. In the end, another distribution channel will be established, in a static market place, with the loser being the independent dealer channel. In the end, Goodyear and the rest of the manufacturers who follow suit aren’t going to produce one additional tire because of this program.

"Do you see car manufacturers rushing to allow these same internet shoppers the opportunity to buy cars and trucks from them on line? That may happen someday, but for now car manufacturers seem to be smart enough to respect, and honor, the substantial investments that business people make in the brick and mortar, people, inventory and training needed to market their products. You should do the same.

"I would remain the responsible party in the customer's eyes, and I would get to handle adjustments, ride complaints, low mileage claims, etc., and you would sit back and reap the profits!!!??? WOW, what a deal!!!??? Are you, or your customers, going to pay me extra for having to deal with after-market wheels that require special care and $10,000 tire changing machines to do the work correctly? Are you going to be able to explain those special circumstances to your customer before he, or she, shows up to get the tires installed? What happens when either you, the customer, or your wholesale distributor, makes an error regarding the size or service rating required to fit the vehicle properly? Guess who’s facing the customer when something goes wrong. Not you, and not your distributor. We are.

"These are some of the reasons we require more than a $10 profit, or whatever you intend to pay, to make a tire delivery profitable. It's why it is so important that the dealings on tire pricing, and the cost of the services to install tires, be left to negotiations between the delivering dealer and the customer. This program is an accident waiting to happen. If you want a program like this for these consumers, deliver the tires through your company stores. You have control over the workings of that channel. You own them, so you certainly can install any program you think would drive business and profits to those locations.

"We, the independent dealer channel, helped the car dealers in this country go from a 1% share of the replacement market to nearly a 10% share today. Most of the tires sold in car dealerships are premium products. This program, if it matures, will result in a far greater share of the replacement market moving away from the independent dealer channel than did the car dealer support program. I just don’t think the independent channel can afford to lose that large a share.

"Personally, I'm not interested in giving up additional premium product sales to my 'supplier' this time around. Especially when the program is disguised as something that’s beneficial to my cause and my business plan. I’ve always thought that crap could be covered with lots of sugar and honey, but it will always be a pile of crap. I’m hoping that this effort by you fails because of a lack of support from dealers like myself. It’s not easy to say no to a major supplier in this tire industry, but if there was a time to do it, that time is now. Manufacturers' loyalty to the dealer channel has evaporated over the many years I have been in this business, so I certainly hope there are many more dealers who feel the way I do, and who will say NO to you, and to this program."

What do you think of Gowland's views on the new Goodyear program? Will manufacturers selling tires online hurt or help your business? Let me know what you think by leaving a comment!

Author

Bob Ulrich
Bob Ulrich

Editor, Retired

Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

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Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

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