Note to tire manufacturers: ‘You can’t have your cake and eat it, too’
Each month we ask members of our National Advisory Council (NAC) a question or questions on a current hot topic. This month we asked, “Goodyear was the first tire manufacturer to begin selling tires directly to consumers online. Now Michelin has a pilot program that includes tire installation. What are your thoughts on this development? How do you feel it will affect your business?” Here are some of their responses.
- Competition in this industry is already overwhelming without manufacturers going directly to consumers via an online portal for tire sales. Tires sell service, service sells tires — anybody in this business knows that. Our concern is that with more ways to close that tire sale transaction — more ways for consumers to source tires in other ways — the fewer vehicles we’ll see in our shop and on our lifts. All this equals fewer opportunities to sell service, which really pays the bills, since profit margins on tires continue to erode every year. We’re being told the exact opposite — that this online sales program will capture new consumers, roughly 60% of customers we haven’t had before. We are extremely hopeful that this holds true.
- Bridgestone will be next tire manufacturer to sell tires online. It all depends on where you are in the food chain. As a distributor you need to continue to focus on your larger accounts. The small ones are sinking into the sunset. They do not know how to compete with this change in distribution as well as the growth of retail chains such as Monro Muffler Brake Inc., Mavis Discount Tire , etc.
- Typical greedy manufacturers. For reasons like this we are losing our respect and loyalty for the tire manufacturers. This is bound to have a negative effect on all tire dealers.
- Just as Amazon and other e-tailors have taken market share, anticipate more of this from other tire manufacturers. All tire manufacturers want to move more units, and this would be a growth sector.
- Thirty years ago, your suppliers were your allies. Now, it seems your suppliers are your competition. You can’t have your cake and eat it, too! It’s a sad state for business. Local businesses must compete by being strong within their communities. It boils down to “Business 101.”
We also asked our NAC what was on their mind. Some of their responses included:
Now that the computer has taken over wholesale sales, distributors must figure out how to sell the right tires to their customers. An uninformed customer base usually resorts to selling the least expensive tire, not always the best option.
Jeff Cohen, Co-owner
Traction Wholesale Center
Asian imports of medium commercial over-the-road truck tires are affecting the retreaded truck tire market. Very aggressively priced (cheap) Asian truck tires can be bought, in some cases, for less money than a retreaded tire and its associated casing. Retreading volume continues to erode. Combined with consolidation, this may be the “death knell” for the independent retreader in North America.
Tripp Lee, General Manager
Frasier Tire Service Inc.
Are the stock market corrections likely to affect consumer behavior? We’ve seen some downward corrections which could develop into bigger corrections by fall.
Jon Shields, Branch Manager
Carroll Tire North Atlanta – C33
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The editors of MTD want to know what you are thinking. We rely on members of our National Advisory Council each month to track sales data (see Your marketplace on page 21), and to keep in touch with the hot topics that are affecting tire dealers. Our monthly survey gives you the chance to sound off. If you’d like to join this group, email firstname.lastname@example.org. You also can let us know your thoughts on subjects we write about online. See the “Post a Comment” box following each news item and article on www.moderntiredealer.com. Simply fill in the blanks, write your comment and hit “Submit.” We want to hear from you!
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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.