Donnie Schilling has been selling tires for 20 years. He’s never seen it this tough. By “it” he means the economy of Cleveland, Ohio, where he does business.
Cleveland’s economy — which never recovered from the late 1970s, when the city declared bankruptcy after losing much of its industrial base -- is struggling.
From 2005 to 2006, Cleveland’s overall economic growth ranked 316 out of 363 metropolitan areas, according to the United States Department of Commerce.
Jobs continue to leave the city. In late September, Eaton Corp., Cleveland’s largest Fortune 500 resident, announced it may move its corporate headquarters to a suburb just a few miles beyond city limits.
Cleveland’s housing market is on even shakier ground. In 2007, the greater Cleveland area had the sixth highest foreclosure rate in the country, with nearly 49,000 filings on record.
Like their counterparts in other depressed urban areas, Cleveland homeowners who have retained their properties are struggling to keep up with basic expenses like heating, groceries and, of course, gasoline.
In such a challenging environment, few people have a lot of money to spend on expensive tires and custom wheels, says Schilling. However, his dealership, Cleveland Tire & Wheel, still manages to get a substantial percentage of the city’s tire and wheel business -- particularly large diameter combinations for light trucks and SUVs.
Schilling credits his success to hard work, perseverance and customer service. “It’s very easy to wash your hands of people once you have their money,” he says. “But I plan on being here a few more years! I need my customers to come back and bring their friends and family.”
Schilling has two locations: one on the east side of Cleveland and the other in Geneva, a Cleveland suburb.
He does most of his light truck/SUV tire work at the 10,000-square-foot Cleveland outlet, which opened four years ago.
Before that outlet came along, Cleveland Tire & Wheel operated out of a building on East 55th Street, a busy, north-south thoroughfare that slices through the inner city.
The shop opened in the year 2000, which Schilling says was prime time for exotic tire and wheel sales in Cleveland. “The tire business was great, the wheel business was great, any kind of vehicle customizing was great — no matter what you did, you made money.”
Cash flowed freely and for many customers, price wasn’t an issue. “Parents were even buying tires and wheels for their kids, dropping $2,000 or $3,000 on tires, wheels and accessories for their cars!”
Sales were good for everybody in the tire and wheel business, not just established independent tire dealers, he says. Speed shops were making money, too. One, Schilling recalls, catered to professional football and basketball players, and serviced “a lot of high-dollar vehicles.”
Fast forward to late 2008, and the majority of those shops are history. Those left are barely hanging on, relying on any work they can scrounge up. “I’ve seen so many of them drop off; they’re just folding.
“I think we all had it great when the economy was better.
“People just don’t have the money left over at the end of the month that they did in 2001 and 2002.”
Fortunately for Schilling, he was able to establish Cleveland Tire & Wheel as a “go to” source for tires and custom wheels before the economy plummeted. Because of this, a lot of his old customers from East 55th Street have followed him to his newer location.
Doing business in a down market has forced Schilling to embrace unconventional business methods.
For instance, he offers a layaway plan for tires and wheels. He requires 25% down and gives customers six months to pay off the balance at zero interest. Deposits are non-refundable. If the balance has not been paid within six months, “we’ll take 15% a month from whatever they’ve put down for account maintenance.”
Layaways are strictly cash transactions, he says. “There have been several occasions where a customer will put down 25% and then will disappear."
Other customers have enough money on hand to pay for the whole package and many of them want their merchandise now.
Schilling remembers a few years ago when a customer “with deep pockets” came into his shop looking for a tire and wheel package for his new Cadillac Escalade.
He settled on 30-inch Pirelli tires and a flashy set of chrome rims. Schilling wrote up the bill, which came to nearly $18,000!
The customer, whom Schilling says was probably a “street pharmacist,” didn’t blink.
Schilling knew that the wheel wells of the SUV would not be able to accommodate a 30-inch tire and wheel package without serious modification to the vehicle’s suspension. He recommended installation of a lift kit, which would cost an additional $6,000.
“The guy said, ‘We’ll just worry about the tires and wheels right now.’ I said, ‘OK, but you understand that the tires and wheels are not going to fit your vehicle unless we install a lift kit.’”
The customer said he’d take care of that later. “Well, I wasn’t going to let the guy walk out my door. We sold him the tires and wheels.” (In cases where customers refuse his advice, Schilling has them sign waivers protecting Cleveland Tire & Wheel should any mishaps occur after the sale.)
“He took the vehicle elsewhere to put the tires on. They had to cut away wheel wells and other parts -- just about everything until those tires and wheels would fit. They chopped up a $65,000 vehicle! It’s now probably worth $30,000.
“A lot of these guys are living for today and not thinking about tomorrow. That’s not my style, but I have kids who need shoes. I do what I have to do. That was my biggest tire and wheel sale.”
Cleveland Tire & Wheel still commands princely sums for large diameter tire and wheel installations.
“We do Hummers with 24- and 26-inch tire and wheel combinations on a regular basis.”
Cleveland Tire & Wheel charges up to $3,500 to outfit a typical Hummer with the proper tires and rims.
Schilling doesn’t see as many tricked-out SUVs as he did several years ago, but more of his customers are dressing up their pickup trucks with tires.
“Most car customers aren’t concerned with tread design, but truck customers want a good-looking sidewall because you can see the tire more on a truck. With car customers, it’s all about the wheel. With truck customers, it’s the wheel and the tire.”
Cleveland Tire & Wheel’s truck tire customers are paying more attention to brands as well. (The dealership sells Cooper, Nitto, Toyo, Kumho and other brands.) “Back in the day, we didn’t have to tell them what brand tire we were putting on. It was ‘What kind of wheel?’”
The company has installed quite a few lift kits on pickups. “There used to be few options for trucks. They pretty much had to go with the same option as what cars were going with.
“Now if someone comes in with a big pickup, you can throw a six-inch lift kit on it for about $2,000. It almost looks like a Tonka toy.”
Schilling buys lift kits from different sources. Over time, he has developed a preference for kits made by Super Lift, a leading suspension system manufacturer. “The cheaper the lift, the more problems you have with installation. If something doesn’t line up and you have to drill holes... it’s just nice to be able to put in this part and put that bolt in.”
There’s more to taking care of customers than selling and installing products, according to Schilling. Following up with them is just as critical.
Two weeks after every sale, Cleveland Tire & Wheel employees call customers to make sure they’re happy with their purchase. Complaints are passed along to Schilling, who speaks with customers personally.
“It’s simple, but it gives us an opportunity to say, ‘If something is wrong, we want to know about it. We want the opportunity to make it right.’”
Some customers are so accustomed to poor service that they expect it from everyone, he says.
“Sometimes people just want to hear that you’re willing to stand behind your products and service.”
That’s the customer-centric approach that makes Donnie Schilling not only a survivor, but a tire dealer with a bright future, no matter how gloomy the market around him presently seems.