K&M Tire Inc. added warehouses, expanded commercial and farm tire offerings, grew the Mr. Tire and Big 3 Tire marketing programs, and improved its Web-based tire ordering system in 2013.
The family-owned company shared plans for growing business and improving customer service at its annual dealer meeting. More than 700 dealers and their guests, a record number, attended the event in Chicago in mid-January.
2013 in review
The company grew sales 10% to 15% in 2013 over 2012 mainly through expansion, according to President Ken Langhals. Although newer warehouses are driving most of the growth, sales increased about 5% at older, long-established locations year-over-year.
In 2013, K&M opened a 50,000-square-foot warehouse in Barneswell, Minn., to serve the Fargo, N.D., market. A 50,000-square-foot distribution center was built in Bismarck, N.D., to replace a 14,000-square-foot leased facility. The company moved its Dallas distribution center to a larger 201,000-square-foot facility. A new 48,000-square-foot distribution center in Mustang, Okla., began operating at the end of February, enabling K&M to serve tire dealers within a 150-mile radius of Oklahoma City.
The company operates 16 warehouses, with others located in Des Moines, Iowa; Omaha, Neb.; Chicago; Minneapolis; Houston; Madison, Wis.; Kansas City and Wichita, Kan.; Detroit and Grand Rapids, Mich.; and Delphos and Toledo, Ohio. K&M also added about 6,000 square feet of office space to its corporate headquarters in Delphos.
Commercial truck tires were the company’s fastest-growing revenue segment in 2013. Langhals attributes the success to becoming “more aggressive” in the truck tire market by hiring a commercial sales manager and three commercial specialists. In 2014, the company began carrying commercial tires from O’Green Tire & Wheel LLC and Double Coin Holdings Ltd. and Cultor farm tires from Mitas Tires North America Inc.
K&M increased membership in its dealer marketing programs in 2013 by 34%. More than 600 locations are part of the Mr. Tire and Big 3 Tire programs compared to just over 400 at the end of 2012.
Preferred partners are the “heart and soul” of the Mr. Tire and Big 3 Tire programs, says Jeff Wallick, program and marketing manager. “I look at those two programs as focusing on helping our dealers improve their business, whether it’s saving them money on their car parts, providing them with a website or connecting them with a great private label credit card program.”
K&M introduced a mobile-friendly version of Weblink, its Web-based online tire ordering system, in 2013. K&M dealers place 60% of all orders, or about 800 orders a day, through the Weblink system. More improvements are in the works, including a feature scheduled for the second quarter that tracks dealer participation in all K&M programs.
What’s ahead in 2014
K&M plans to expand distribution routes through its entire service area, especially in the newer markets of Houston, Dallas and Oklahoma City.
“This year our focus will be in Texas and Oklahoma to grow those areas,” says Cheryl Gossard, vice president. “They’re our newest areas and we would like to build them up a little bit more. We are looking at possibly acquiring some other small wholesalers in those areas.”
At the end of January 2014, K&M purchased the assets of Mid-Tex Wholesale Tire LLC in Waco, Texas. “K&M has spent the last year laying the foundation in Texas to be ready and capable of significantly increasing our sales in this market,” says Gossard.
“We moved into a larger warehouse, increased our tire inventory levels, along with hiring and training sales staff and drivers. Customer service is our number one priority, so it is extremely important for us to have everything in place before we focus on adding sales in our newer markets.”
The company will continue to focus on “out-servicing” the competition, according to Gossard. “We do a very good job gaining customers because of our customer service.” ■