Growing fish in a small pond: Virginia dealer 'targets' customer needs
Randy Elliott Jr. (right in photo, with Target Tire Branch Manager Terry Carlon) manages a one-store tire dealership in rural Tappahannock, Va. The area is predominantly farm country, with a population of 1,629.
How rural is it? The local Wal-Mart doesn't have a tire center.
But Elliott has a lot going for him. Tappahannock, the Essex County seat, also is a growing commercial center, within 60 miles of Fredericksburg, Richmond and Williamsburg, Va. His dealership, Elliott's Tire & Auto, has been in the same location in one form or another for more than 58 years and has a strong customer base.
Last but not least, Elliott doesn't have to go it alone despite the size of his business.
Wheel barrows to wheel chairs
Randolph Elliott Sr. worked in the tire business for 20 years before opening Elliott's Tire in 1969. He remains president. The dealership is the successor to Elliott's Garage, the company his late father, Lewis, founded in 1943.
Randy Jr. started as a tire buster in 1976. "When you start at the bottom, you can help out an employee when he has a problem in the shop," he says.
Retail tire and custom wheel sales make up 60%, or $300,000, of their business. Commercial sales, which include everything from wheelbarrow and wheel chair tires to skidder, rear tractor and loader tires, make up 40%. The Elliotts have one service truck, but are in the process of getting another.
Elliott's Tire buys its tires through Target Tire Inc., a wholesale distributor based in Jacksonville, N.C. The Elliotts used to purchase their tires direct from the manufacturer. The direct approach is no longer practical from either their standpoint or the manufacturer's.
"When you buy direct, you have to buy so much quantity at one time," says Randy Jr. "I can buy as many tires as I want from Target, and they are close to direct pricing. If I had two or three stores, I would buy direct where it was feasible to do that."
A wholesale distributor gives him more control over his inventory. "If inventory is sitting idle for a while, it's like money sitting around," he says.
"If it costs 1% more to buy from Target, it's worth it. You don't have to overload yourself with items that will sit idle, and you don't have to have as big an inventory."
Wholesale distributors also can keep him supplied with hot sellers. "If a size takes off all of a sudden, I could be in trouble because I'm a smaller dealer. But Target is able to compete with someone like Sears when it comes to getting product. No way could I do that."
Elliott's Tire is an American Car Care Centers (ACCC) associate dealer through Target, which means 51% of its tire sales must be ACCC product (Target Tire is one of the largest ACCC distributors with 105 associate dealers). He also is a member of the local Farm Bureau co-op.
The store's inventory includes Michelin, BFGoodrich, Uniroyal, Bridgestone, Firestone, Dayton, Hankook and ACCC's American brand. TBC Corp.'s Multi-Mile brand and some associate brands from Goodyear Tire & Rubber Co. also are kept on hand. Elliott says the American Silver, a 60,000-mile tire made by Michelin Americas Small Tires, is his biggest seller.
"When you're in a rural area, you're not going to have a customer buy a Michelin tire selling anywhere from $80 to $100. The average person in the rural area will pay somewhere from $60 to $65."
Elliott says he can make $23 a tire when selling a private brand, not including mounting and balancing, which is usually more than one of his major brands.
He sells what meets the needs of the driver by asking the following questions:
1. How many miles do you drive in a year's time?
2. Where do you drive (off-road, on-road)?
3. How do you drive?
"If you try to meet people's needs, they appreciate that. They are trusting you, and will come back to you."
Elliott says his competition includes fellow independent tire dealers both large (Big L Tire Centers, based in Harrisonburg) and small (Sanders Tire in nearby Warsaw) within seven miles of his location. He also hears Wal-Mart is looking for 18 acres on which to build a larger store -- with a tire center.
Could he survive without a wholesale distributor selling him tires and, in some cases, equipment? Elliott says yes. "But I'd have to do my homework."