From workhorses to show ponies: Dealers can corral bigger profits selling lawn and garden tires
OK, pop quiz. What's round, black and can be part of a tire/wheel/vehicle package that costs as much as a college tuition?
If you said ultra-high performance tires, you'd be correct, of course. But there's another correct answer -- lawn and garden tires!
Some dealers are getting their cut of the blossoming business of customizing golf cars, which may cost as much as $25,000 (complete with 12-inch lawn and garden or ATV tires and alloy wheels)!
"They have to buy their tires and wheels for these vehicles from someone, and it might as well be me," says Gary Fehrenbach, vice president of Golden State Tire in Escondido, Calif., who alerted us to this dazzling trend.
And although the vast majority of lawn and garden tires are more workhorses than show ponies, there's money to be made in all aspects of this niche.
Golden State has been specializing in lawn and garden tires since 1979, three years after opening for business. The reason was quite simple -- demand. No one else in his market was concentrating on them.
His company sees lawn and garden tire opportunities from every angle -- it sells to other tire dealers, it wholesales the tires (from a warehouse in Riverside, Calif.), and it sells them at retail.
"Most tire dealers don't want to have a lot of them on hand," says Fehrenbach. "They have a lower dollar value, and they take a considerable amount of product knowledge to sell. Most retail customers ask for what they want, not what they need."
Golden State Tire sells most brands of lawn and garden, utility and ATV tires, such as those from Greenball Corp., Tireco Inc., Carlisle Tire & Wheel Co., Titan International Inc., Nanco, Goodyear Tire & Rubber and others.
This market can be a little "squirrelly," according to Fehrenbach. "A lot of tire dealers might think that this niche is a gold mine. They think you can mark up the tire 50% to 60%. But you have to keep in mind that you're starting out with a tire with a small dollar value.
"Also, this is specialized merchandise. You may have to sit on the inventory for a while."
It can be a profitable market, but "it's a double-edged sword," he says. "Typically, you can't mark up lawn and garden tires the same as you could a high performance tire, because you're dealing with a different dollar value to start with."
The sale of a lawn and garden tire also can be quite time-consuming.
"It may take 20 minutes to explain to a customer what type of tire they need, and when you've made the sale, it's for an $11 item. It's not like the customer typically rolls out with $2,200 tires and wheels."
Retail is OE driven?
If a new tread comes out on a John Deere lawn mower, next year you can bet that tire will be popular in the replacement market, Fehrenbach notes.
"However, lawn mower manufacturers don't know in which geographic location their equipment will be sold. And what works on the East Coast may not for the West Coast."
For example, a lawn mower that is sold in Danbury, Conn., has to work on one-half acre lawns. The tires have rounded shoulders so they won't leave marks on the lawn.
"That same lawn mower with the same tires is also sold in Riverside, Calif., where we might get seven to eight inches of rain a year. That mower is now subject to thorns, dry bush and stubble damage. Owners are using them more for weed abatement than cutting grass lawns." So the two locations need two different tires.
And there is the "one-sy and two-sy" aspect of the market, he says.
"Say Mrs. Jones comes in with one tire that went flat on her lawn mower. She wants one tire, not a set. She wants to match the other tires. You have to spend time with her to match up the tire with the purpose, and inform her why the OE tire may not be the right choice for her situation."
And after spending the time educating her, she still may just want the one tire replaced that matches the OE tire.
"Also, when we work with municipalities, we see other factors coming in. A golf course or cemetery, as an example, is looking for tires that offer extended hours. In residential use, the tires will dry rot before they wear out.
"To do the lawn and garden market right, you have to be application specific, the same as a high performance tire. You have to match the tire to the purpose. That's what we're all about. And you have to sell what the customers need, not what you have on hand to sell.
"We have customers come in and tell us, 'The tire dealer who sold us this tire told us it would work' and we say, 'Yes, it will fit on the rim and hold air. But it's not the best tire for the job.' We match the tire to the task."
Scott Highfill, president of Great Western Tire (wholesale) and Specialty Tire (retail) in San Diego, Calif., has a contrasting opinion.
He feels that that lawn and garden and other specialty tires are pretty easy sells.
Most retail customers want the same tire that came as OE, so all you have to do to make them happy is match what they have, he says. "You don't have to sell, and it's very profitable. The margins are higher for specialty tires than for passenger or light truck tires."
He says "availability is the key issue to success." Since relatively few companies sell specialty tires, the customer has probably spent a lot of time calling around trying to find the tire he or she needs -- and is thrilled to discover you have it in stock.
"It's not like there are 50 places in a nine-block area selling these tires, and the company with the best prices wins. If you have it in stock, you make the sale."
Highfill sells mainly Cheng Shen tires (imported by Greenball Corp.), Carlisle and some others.
Jim Sniadecki, in sales at Maxxis Wheel Co., does a lot of work with OE customers.
What are his OE customers looking for in the way of lawn and garden tires? "Good tires at cheap prices," he says without hesitation.
The lawn mower companies are not asking for new tread designs, but are inquiring about run-flats, which are "at a dead-end so far," says Sniadecki. Some customers are requesting foam-filled units, which are available from some companies such as Carlisle Tire & Wheel or from tire dealerships that offer this value-added service.
He says commercial accounts of his OE customers are mainly looking for tires that grip on hills, are light so they are fuel-saving, and offer longevity since down-time is a major problem. They buy an abundance of 12-inch tires.
Residential customers buy more six, eight- and 10-inch tires and demand tires that are turf-friendly.
Dealers seeking success in this niche need to look for greener pastures -- at least mowed ones -- in their market area, says Patrick D'Auria, marketing manager for Duro Tire & Wheel.
The commercial end of this business encompasses accounts from lawn care professionals who cut grass at golf courses, colleges, hospitals, city parks and recreation divisions, cemeteries, office complexes, etc. And professional landscaping businesses are currently flourishing, the experts say.
As with other tire segments, these accounts are looking for tire dealers who can reduce their downtime and control their costs. Successful dealers offer the best service and package lawn and garden tires with trailer tires and other tire types for the convenience of the customer, says D'Auria.
"A dealer should carry tires especially for the commercial turf market," agrees Hank Chang, Kenda USA's sales manager. "The commercial turf market is an area where growth has been fairly constant over the past several years.
"With more dual family incomes and longer work hours, people are contracting their yard work to commercial lawn care companies."
Another benefit to selling tires to the person in the commercial lawn care service is "this person may also have tire requirements for a skid steer or possibly an ATV unit, and definitely needs trailer tires for his trailer. By also carrying the turf tires, the dealer has become a 'one-stop-shop' for all the tire needs of the lawn care professional," Chang says.
"The drawbacks are that the business is seasonal; the dealer needs to know the standard sizes for the commercial mowers and his local market size. For example, there is probably more of a market for lawn and garden tires in the southeast United States than there is in the Southwest.
"A dealer does not want to overstock or stock the wrong sizes and hold inventory until the following season."
In conclusion, the lawn and garden tire business can be a profitable niche, but the dealer needs to educate himself and perform some research before taking on this segment, says Chang.
"However, it certainly is a line that can help a dealer to grow and extend his business."
The latest trend in lawn and garden tires: Would you believe -- customizing golf cars?!
The lawn and garden tire niche has never been "trendy," says Gary Fehrenbach, vice president of Golden State Tire in Escondido, Calif. But for the last two years he has been watching with interest a burgeoning market -- customized golf cars!
Customers are not only adding bigger, wider lawn and garden and ATV tires and wheels; they're putting on lift kits, redoing suspensions and even switching to gas engines.
Some customers actually bring their own dolled-up golf cars to golf courses, but many are "taking them to play in the desert and trying to out-do each other," says Fehrenbach.
"Everybody wants something different. They have to have tires that are one inch taller or wider than everyone else, or they have to have aluminum wheels instead of chrome.
"This is where you step out of the utilitarian segment and into 'toy.'"
And the desires vary greatly.
"One guy will want his ride to be pillow soft. The next guy will want his golf car to be knarly and nasty.
"This is hard for me to work with," admits Fehrenbach, "I'm strictly a utilitarian kind of guy. I just can't stop thinking I've got two kids in college, and these people are spending more on their tires and wheels than I spend on their college tuition."
And don't think that this is just some wacky California fad. "CBS Evening News with Dan Rather" recently did a segment on residents in a retirement community in Florida who are caught up in the craze, customizing their golf cars to look like hot rods, pickup trucks and exotic import cars. The report quoted some residents as having put more than $20,000 in their rides, which they mainly use to cruise the streets of their community.
And Michael Hruby, owner of the Web site www.luxuryCarts.com, says he's shipped his customized $8,000 to $25,000 luxury golf cars all across the U.S. plus Russia, Japan and many other countries.
"This is a unique product. People want to put their stamp on them, to have an individual image. I have some customers tell me they always wanted a Hummer, but a real one wouldn't make any sense for them. So they order a golf car to look just like it. Or they want us to match their car, such as an Escalade. It turns out looking like a miniature version of their automobile. We're just capturing a little niche." He says he'll soon introduce three golf cars designed by hot rodder Boyd Coddington.
Steve Miller, owner of the Web site www.lostcreekcarts.com, says the market really exploded about four or five years ago. "People are buying new lawn and garden or ATV tires, along with aluminum wheels. There's tremendous growth!"
This might be a market worth checking out.
Little tires can have a big bite: Carlisle puts lawn and garden tires in their place
Carlisle Tire & Wheel Co., a subsidiary of Carlisle Companies Inc., breaks down its lawn and garden tires into these categories:
* Turf handlers. These tires have broad shoulders designed for traction on turf and grass with minimal lawn wear. They go on consumer and commercial turf equipment, golf cars and utility vehicles.
* Gripping performers. With specially designed tread patterns featuring two-way traction, these tires perform well on drive and free wheels. They go on utility carts, wheelbarrows, pressure washers, generators, hand trucks, lawn equipment and "fun-karts."
* Smooth operators. These tires can have a smooth tread, multi ribs and straight ribs and offer optimum contact with various work surfaces for easy-flowing traction and wide flotation. They go on wheelbarrows, transport vehicles, riding lawnmowers, garden tractors and farming equipment.
* Golf gliders. Tubeless tires that can carry loads without wear and tear on fairways, they ride smoothly on paved paths. They also work well as wide flotation tires for on-site transport or heavy-duty jobs. These tires are made for golf cars and utility vehicles.
* Big biters. With bar tread designs, these tires put power to the ground for equipment that demands traction in snow on hard and loose soil. These are designed for riding mowers, garden tractors, snow throwers, tillers, ATVs and utility vehicles.
To be successful in this niche, a dealer has to be willing to learn about the product, since there is a great variety in treads and sizes for a multitude of applications, says Brian Preheim, Carlisle's product manager for consumer and commercial lawn and garden tires.
And having the tires on hand is a must for commercial lawn and garden tire accounts. "This market is very competitive in nature. When you're working with commercial accounts -- those who make their money cutting grass -- they can't afford downtime. You have to carry the inventory.
"The commercial accounts want you to have the tire in stock when they need it and want you to have the capability to service them. They don't want to wait even an hour."
Retail consumers tend to be more patient, he says. "They may cut their grass once a week, and might be willing to wait a week for you to get a replacement tire in.
"Not so with landscapers and cutters."