Is the Internet for you? Yes. But listening to what dealers with Web sites have to say will save you a lot of grief
Stop what you're doing and think like a tire-buying consumer for a second. Log onto America Online, or the Internet service provider of your choice, and enter a search for tire dealers. You'll find 15,729 listings just on AOL. Add the word "independent" and enter another search. You'll find 3,682 independent tire dealers just from one search engine. See how easy it is to get lost in cyberspace?
Serious questions remain about how to use the Internet to its best advantage. Since research began on this article last spring, Modern Tire Dealer interviewed tire dealers who have cancelled their Web sites, those who have just rebuilt their Web sites and those who do not intend to sell tires via their Web sites.
When it comes to the Internet, assessing the mindset of tire dealers is complicated. Some choose to maintain a Web site because they are concerned about perception. "If you don't have a Web site, your customers will think you are falling behind the technological curve," says one dealer.
Another dealer discontinued his Web site; still another found an ingenious way to link his Web site with his customers. Several dealers are very enthusiastic about "Net" marketing, while others are staying online because they want to see how it plays out.
The final chapter in Web site tire marketing has yet to be written. But chapter one is interesting enough.
A strong home page
Although Internet tire sales represent just 1% of his overall tire sales, New England tire man Tom Schonagel, sales manager for Tires Plus Wheels in Hartford, Conn., receives up to 100 e-mails a day at his single store operation.
"That's because of our very aggressive-looking high performance Web site that blares the headline: 'Let us hook you up; we have every tire and wheel on the planet,'" he says.
Schonagel, a self-professed high-end tire and wheel expert, warns, however, that even the most alert can get burned. "Not long ago, we shipped a $9,000 order to a banker in Florida who borrowed one of his customer's credit card numbers and then erased the entire transaction. It took us awhile to catch him, but we did and got things straightened out."
Did that deter Schonagel? "It did in the sense that we now only ship after we have the money," he says. "We take money orders and personal checks (after they clear). We no longer accept credit cards. In fact, I recently turned down $20,000 worth of business because I wouldn't accept a credit card. I'm not going to be burned twice."
His enthusiasm for the Net is unbridled. A slammed Ford F-150 with a full aero kit and big, bold wheels is prominently featured on his home page, along with store hours, a phone number, fax number and e-mail address.
The cost to build the Web site initially was about $2,000, plus $75 for the domain name, tirespluswheels.com. Monthly server fees are $45.
"We do $5 million a year, with just nine employees and three bays," he says. "There are about 20 jacks outside and we stay busy." Schonagel says his Web site address appears on company vehicles, business cards and his TV ads.
He also displays 500 to 600 wheels and speed-rated high performance tires up to and including 23 inches in diameter in his store. He doesn't use direct mail or advertise in the newspaper because those mediums reach an audience unwilling to spend the kind of money he demands for the tires and wheels he sells.
Lack of speed kills
Steve Craven, president of Craven Tire & Auto (www.craventire.com), presents a more traditional Web site for his eight stores: six in Virginia, one in Maryland and one in Florida.
Like Schonagel, Craven says Internet sales amount to about 1% of his overall business. "I believe that until the general public gets instant gratification from their computers, the whole concept of selling online is a waste of money. Currently, it takes too long for my Web site to load, and if the customer doesn't know my Web address, how is he going to find me?"
Craven says his site still gets a fair number of hits largely because of his coupons, and his online presence is growing, albeit slowly."Right now, we have four coupons on our Web site, one for a $19.95 oil change, a $49 air-conditioning special, a $64 cooling system back flush and 5% off any tire in stock." When MTD
Among the categories Craven lists on his Web site is his vision for his business, his photo and bio, his vice president's photo and bio, store locations, customer testimonials and a section on "Why Craven?" Also presented were sections on car care clinics, an auto tip of the month, and feedback.
He also shows pictures of his store managers, their store hours and the services they provide. Listed among his primary tire suppliers are Goodyear, Cooper, Dunlop and Michelin, along with his promise to get you any tire you desire.
Under the "Why Craven?" section, he lists 13 reasons for buying at Craven Tire, including fast turnaround on repairs, quick in-and-out routine maintenance, repairs done right the first time and expert technicians. He lists 15 Craven Tire customer testimonials; typical responses include "excellent service," "answers to all my questions," "reasonable fees," "good quality," "I'll be back."
Although the Fairfax, Va.-based tire dealer was going to drop about $20,000 to $25,000 into a new state-of-the-art Web site update, he is refining his plans. "It will be state of the art, but it will also be easier for the consumer to use," he says.
"There will be more consumer information, more information about my company, and it will be presented as text for fast loading; no pictures, or very few. I will continue with my coupon business and we will answer questions for consumers online."
Craven's largest supplier is the Heafner Tire Group, and he is very happy with his B2B Heafnet.com experience. But when it comes to selling to consumers online, it's an entirely different ballgame. "Until the online experience for me and my customers is as quick and easy as the telephone, people just aren't going to buy many tires from independent tire dealers on the Internet."
Information, not sales, tool
Georgia tire dealer Rich Hoffman, owner of Hoffman Tire & Alignment (www.hoffmantire.com) in Fayetteville, Ga., also believes his Web site is more of an informational tool than a sales tool. "We don't show prices. Rather, we tell people who we are, what we sell, where we are and what services we provide," he says.
Hoffman invites customers to ask for an online price quote. "We've had our Web site for three-and-one-half years. At first, we thought it would generate a lot of business, but that didn't happen. We learned quickly that people don't like buying tires and services online. They are hands-on, they want to see and feel what they are buying."
Hoffman, a 37-year industry veteran, has been a tire dealer since 1976. He sells Michelin, Firestone, Goodyear and General tires. "I know that there is a segment of my market that likes to do its homework online. Most of them will visit a tire manufacturer's site first and some of them will find their way to me through the tiremaker's dealer locator."
That's why Hoffman continues his Internet presence. "Even though my Web business amounts to about 1% of my overall business, it is a billboard, and it is a convenient purchasing tool for some of my customers."
Hoffman spreads his advertising dollars around. "Direct mail works best for me in my market," he says. "After that, it's TV, radio, my Web site and newspapers."
Hoffman reports a 10% return on his direct mail pieces. "That translates to physically seeing 30 to 40 people a month in my dealership."
He also spends about $800 a month on television advertising, where his ads appear on such channels as CNN, CNBC and ESPN every day.
"Typically, tire dealers don't like change," says Hoffman. "But tire buyers expect us to change and shift with market changes, and the Internet is part of that. Simply put, we want our customers to have a pleasant experience doing business with us, and our Web site is helping us achieve that goal."
Mark Yagour, general manager of Safeway Tire in Cleveland, Ohio, reports about 10 people a month come into his dealership because of the coupons he places on his Web site.
"We know we aren't updating the site enough and that we still have much to learn about how to use the Internet," he says. "We have learned also that we aren't going to sell many, if any, tires from our Web site."
Safeway Tire, which sells Bridgestone and Firestone brand tires, has been in business for 50 years. It claims that when you purchase four new tires from them they will mount and balance your tires and have you on your way in 20 minutes. "Our 16-bay store is like a NASCAR pit stop," says Yagour. "We have 24 tire changers (personnel), we have 13 tire changers (equipment) and four Coats tire balancers.
"Despite the fact that this information is on our Web site 24/7, we still aren't driving business through our front door. And we even provide a coupon offering a free alignment with every four new tires purchased. There must be something we're missing, so we're planning a review of our Web site in January 2002."
The Internet has not been a sales tool for Leon Powell, owner of Wickenburg Tire in Wickenburg, Ariz. Although his business is flourishing, he has elected to pull down his Web site.
Powell does business in the retirement community of Wickenburg; population 5,000, where an active senior community is more connected to living life than staring at a computer screen. "My customer base, retired or not, knows where I am and knows what I sell," says Powell, who is located about 65 miles from Phoenix.
"I also can say that the dealer locators provided by Goodyear, Cooper and Michelin haven't helped. In the one-and-a-half years I've had a Web site, I have received just three phone calls... from people who already knew me and only wanted to confirm a special I was running."
Powell, who has been in the tire business since 1978, operates out of 14 bays with 17 people. He will save only $100 a year after the cancellation of his Web site, which he describes as the cheapest form of advertising he has encountered."Despite its low price, it is still unable to do for me what our ads in the Wickenburg Sun
Mark Kaufmann, executive vice president of Kaufmann Tire Service, headquartered in College Park, Ga., was soft spoken and deliberate when asked how the Internet was impacting business in his 37-store organization in the Southeast (Kaufmann has 48 total outlets). "I consider our site to be more informational and more advertising-oriented than anything else," he says. "We do get some play off our Web site, what I would call incremental business."
Asked how helpful the site has been to his business, his response was to the point: "I don't know if anyone has the answer to that. I can say we are sticking with it because the Internet is going through its infancy, a trial and error period."
For the moment, Kaufmann says his ad dollars go first to radio, second to TV, third to newspapers and fourth to direct mail. A seller of Goodyear, Toyo, Pirelli and Mastercraft tires, Kaufmann says he has no sense of how dealer locators provided by those companies may be drawing attention to his stores. "They may be, I just don't know."
A similar point of view came from Chad Niezgocki, store manager for Granite City Tire in St. Cloud, Minn. "If you're asking me if I have a sense of how many additional calls we've gotten since putting up our Web site, I'd have to say it's flat," he says. "In other words, there has been no jump in business, no new activity from the Web site despite what I call a very aggressive on-line coupon campaign.
"We put coupons on our Web site advertising a $19.95 oil change for $11.95. Only marginally successful, we did about two jobs a week based on those coupons. We also put on a coupon advertising a $44.95 two-wheel alignment for $12. The response: zero."
Niezgocki says he receives about five to 10 phone calls per month from people who say they are looking at his Web site and have a few questions. "That's a positive, but it isn't translating into sales. No doubt some of that is our fault for not promoting our Web site more than we do."
Granite City Tire can be pulled up on both the Goodyear and Cooper dealer locators, but Niezgocki says he is unable to determine if that is helpful or not. "People don't come through the front door and announce that they found me through the Goodyear.com dealer locator."
Rick Lang, consumer division manager for Tire One headquartered in St. Cloud, Minn., says his company's Web site is meant for consumers. That's important, because Tire One says it has 210 dealers in its program in the upper Midwest.
"We want to get our e-commerce business moving," says Lang, who lists his dealers online at no cost and creates a one-page Web site for $49 a year.
In Lang's view, his dealers are competing online with The Tire Rack. "Buying from the Rack is fine," he says, "but our dealers can and do compete on price and back that up with installation, balancing, alignment, the whole works. Tire Rack cannot do that."
He says Tire One dealers already are known and trusted by consumers in the Midwest. That would explain the 7,000 hits a month Lang's dealers now receive, collectively, since he put them all online -- double the number of hits they were getting three months ago.
"It is not a stretch to say our online business represents 3% to 5% of our overall business," he says, again speaking for all of his dealers. "Just as exciting, we have noticed that customers are qualifying themselves as private brand buyers, or high performance buyers. This simplifies the transaction process for our dealers and consumers alike."
Lang advertises his Tire One dealer Web site addresses in every piece of advertising and collateral material he produces. "The newspapers in our marketing areas are our first choice for ad dollars," he says, "and we put our Web address in every ad. TV is next, followed by billboards and radio. We even put our Web site address on wearables.
"Everything pushes the consumer to our Tire One Web site, including Minnesota's DMV (Department of Motor Vehicles) mailings informing citizens that they owe 'X' amount of dollars for their new license plate tabs." A Tire One coupon for $30 off the price of four tires, its 888 toll-free number and tireone.com Web address rides along with every DMV mailing to citizens. "So we have 100% promotional coverage for our Web site in Minnesota."
But does any of this translate into dollars? "Our numbers are going up," says Lang. "We know the Internet is part of our future, we are advertising that fact to consumers, we are educating our dealers and we have set up promotions that tie our dealers to consumers through the Web site."
From its single location in Junction City, Ore., Bob Dickman Tire Center has attached itself to the thriving recreational vehicle industry in its own backyard.
"Our total dollar volume is skewed toward the RV segment," says Rob Dickman, president. "It stands at 70% RV and light truck tires, 30% passenger in terms of wholesale dollars."
So there is no confusion, Dickman wholesales to his giant RV customers, among them the nation's largest RV builder, Monaco. "We also do business with another nearby RV builder, Marathon, and are located in what you could call the motor home Mecca," he says.
To service the RV part of his business, which now extends across the country, Dickman has set up www.dickmantires.com. "We discourage buying RV tires online," he says. "We prefer to have our customers drive to our location so we can do the job properly. If I ship tires, that guy is stuck with four tires. He still needs installation, balancing, proper inflation pressure recommendations and a whole host of advice that RV tire buyers may not be able to readily find.
"We are willing to quote tire prices on the phone or the Net and make tire recommendations. But after that we direct them to one of the 330 Les Schwab tire outlets in the West (Bob Dickman tire is an independent Les Schwab member-dealer), or to an appropriate dealer in other parts of the country whom we know and trust."
Many of Dickman's customers drive more than 1,000 miles to have him put new tires on their motor homes. "Understand that these coaches start at around $200,000 and work their way up to $2 million," he says.
Dickman and his people also travel with Monaco to its four annual rallies, in Wisconsin, Georgia, Arizona and Oregon. "We conduct seminars at these rallies on tire safety, inflation pressure, etc., for Monaco, and they have elected to link us to their Country Coach Chassis Web site," he says.
"It all adds up to an important business relationship for us and the RV builders.... We recently participated in the Family Motor Coach Association rally in Redmond, Ore., where more than 5,000 motor homes showed up."
Dickman says his business is growing because of online activity. "We invite RV owner questions and we have several employees dedicated to answering those questions. Every day we answer e-mails from people from New England to Florida to the Midwest. Our reputation is spreading fast on the Internet, and that's a good thing."
Dickman's single-outlet store employs 25 people, and includes five tire-changing bays, four alignment bays, two truck bays and two accessory center bays. Adjacent to Dickman's tire dealership is a new accessory center designed to handle pickup and auto accessories.
"Excluding our RV business, we are still a large independent tire dealer," he says. "Looking at our retail business only, we are 60% passenger tires, 40% RV and light truck tires. It all adds up to a $7 million a year business."
On the go with Big O
In Southern California, a colorful www.BigOTires.com Web site exists for the more than 50 Big O dealers in the greater Los Angeles market. "It's a good advertising tool for us," says Roger Anderson from Big O's Corona, Calif., district office. "It's out there trolling for customers 24/7 and that's good because we are shopped online. I know also that if we didn't have a Web site in the market, we would be out of step with our competition.
"Our Web site also allows customers to re-acquaint themselves with us and how conveniently located we are on their way to and from work."
In addition to its Web site presence, Big O executives back in Englewood, Colo., have decided the best way to reach customers in Southern California is a color flier to be inserted in local shoppers -- complete with the Web address -- and radio (which also invites customers to look up Big O on the Web site).
Is the plan working? "I don't get a ton of hits," says Larry McCray, a Big O dealer in Corona, Calif. "But the number is growing."
A 'virtual' dealer
Pull up www.all-tires.com and you will find a virtual tire dealership created by Rick Vannan, president of Distrinet Inc. in Columbus, Ohio. "We are the first and only 100% Goodyear Internet tire dealer," he says.
A former Goodyear manufacturing engineer in Lawton, Okla., Vannan created his Web site for one reason. "We want to help Goodyear improve its distribution system."
To help move the bubble, Vannan and his four partners have established relationships with large distributors. "We get our Goodyear tires from them and as fast as possible move them to tire dealers or consumers. The ultimate goal is to shorten the supply chain and get tires into the consumer's hands faster," he says.
The site briefly describes every Goodyear tire in the passenger and light truck categories. It also shows prices, how the order will be shipped and where the consumer should go for service.
What makes his Web business any different from a large distributor or The Tire Rack? "We have asked ourselves that question," he says, "and we have talked with many traditional Goodyear dealers. They tell us that if we deliver customers, they will service them, but we admit there are still many unknowns yet to be worked out."
Vannan says that no one at all-tires.com has yet to make a dime on the Web site, which went live on July 29, 2001. "We haven't quit our day jobs," he says.
But the upside is exciting to Vannan. "This operation costs just $500 to $600 a month, so we have minimal overhead, no bricks, no mortar. We can sell at prices under those offered by distributors and we have a Goodyear dealer locator on our Web site. Except for installation, we are one stop."
Vannan's vision is to create a system based on demand that doesn't require a central system to move tires from the plant to the dealer or consumer. "We think we can significantly reduce Goodyear's inventory needs and put some profit back into the tire.
"Think of us as a marketing tool for dealers. We can take some of the cost out of buying a tire and delivering customers to dealers. Once the customer is in the door, a traditional dealer may tack on an extra $20 to mount and balance the tires, plus alignment work if needed. It's a plus-plus kind of business.
"We think the tire buying process must directly connect the consumer to the Banbury. We believe a tire company must buy its raw materials on demand, must manufacture and schedule on demand and ship on demand. That is what we want to bring to the table for Goodyear."
At Arrow Tire & Wheel's Web site, 14 tire brands are listed on the home page along with the words, "and many others." Still, the core business for the Upland, Calif.-based business is wheels, according to its owners.
"We have been in business for seven years, the last three as an Internet company," says Manager Brian Allen. "Overall, 90% of our business is done on the Internet. We do $1.5 million a year and we are growing at a monthly rate of 35% to 40%."
Such a growth rate is possible because Allen has 1,000 wheel suppliers. "Thanks to my Internet transactions with them I have wheels that I bought for $100 that are in high demand on the East Coast, where they can be sold for $500 to $600. It's simple demand and supply made faster and easier because of the Internet." It also helps that Arrow Tire has just three employees and low overhead.
Allen says nothing is shipped until it has been paid for. COD and personal checks are not options, but he does accept credit cards that have been checked thoroughly before being accepted.
A Bridgestone and Dayton dealer, Allen runs Bridgestone RE730s on his slammed S-10 Blazer, size 285/40ZR17 front and 255/40ZR17 rear. "I am able to counsel people about what kind of tires they should buy based on my personal faith and opinion," he says. "My truck is on the road 125 miles daily. I should know."
Arrow Tire is not strictly an online company. "We mount and balance wheels here for customers who know us and know where we are," says Allen. "So there is some retail."
Allen says Arrow Tire provides the "personal touch" to its customers, even though they may never set foot in the dealership. "My job is to make certain that the customer gets the right tire and the right wheel for their vehicle. To do that correctly, you need to spend time with the customer. So, yes, we are an Internet company, but one with a lot of heart. I like sleeping at night and I can't do that if I've shipped the wrong tire/wheel combination to a customer."
Allen's Web site costs him very little. "We paid $1,250 to set it up, and currently pay $150 a month for maintenance and server fees," he says. "If I'm on vacation and want to make a change, I put it on my laptop, e-mail it to my computer guru and it's online before you can say 'file done.'
"I can tell you that our competitors are standing still, while we are moving ahead. I can also tell you that our margins are good, and that I see more and more tire and wheel buyers turning to the Internet to shop and buy."
For those of you who are considering retreating from your Web site strategy, it may be in your best interests to think of it as a new frontier that needs to be explored.
After 50 years of business as usual, computers and software programs are finally making B2B inroads and substantial differences in the profitability for all concerned. The same might be said about retail selling over the Internet a few years from now.
Perhaps you can't point to a measurable impact on your business just yet, but can you really say that the presence of your Web site has had a negative effect on your business? You may not know who sees your Web site or the effect it has had on their tire-buying decisions.
When thought of as a business tool to build your customer base rather than a way to sell tires online, the Internet can be an attractive and less expensive way to gain exposure. Welcome to the 21st century.
SOME INTERNET FACTS
* Nearly 100 million U.S. adults are online every month, half of all adults. --Media Mark Research
* 51% of all U.S. adult Web surfers are women. -- Media Mark Research
* 90% of all Internet users in the U.S. have an annual income of $25,000 or more. -- 2001 World Almanac and Book of Facts
* People over 50 represent the fastest growing segment on the Internet. The growth rate for this group from Dec. 1998 to Aug. 2000 was 53% compared to 36% for all age groups. -- Commerce Department's National Telecommunications and Informational Administration
* 5.1 billion e-mails were sent in the U.S. in 2000 for business and personal reasons. -- International Data Corp.