Lawn and garden tire dealers, manufacturers rake in profits
For Rob Slagle, general manager of S&S Tire & Auto Service Center in Peoria, Ariz., lawn and garden tires are more than just a supplemental source of income. "They're our secret to being profitable," says the second-generation tire dealer.
Lawn and garden tires will comprise 10% of the $5 million-a-year dealership's total sales this year (the four-store company also sells passenger and light truck tires). "That's because lawn and garden tires are all high-margin -- 50% or better -- items."
It's a market that's ripe for the picking, Slagle says. And he isn't alone in that thinking.
Lawn and garden tires are more profitable than ever, according to Glynne Miller, marketing director for Greenball Corp. in Long Beach, Calif.
Growth cycles in the niche segment normally last two years before slowing to a halt, he says. "We're entering our fourth year. It's unprecedented."
Lawn and garden tires make up 25% of the specialty tire manufacturer's annual sales, a 7% jump from five years ago. That's a significant gain, Miller says. He attributes sales growth to the following factors:
Strong economy. People still have plenty of disposable income, according to Miller. And much of that is being funneled into new home construction, remodeling and landscaping.
Size proliferation. There are more lawn and garden tire sizes than ever, according to Miller, and they're getting bigger. Greenball recently added 14- and 15-inch riding mower tires for home and commercial use (though the most common diameter sizes remain eight and 12-inches, he says). "As more sizes emerge, there will be more price points to pick and choose from."
Goodyear Tire & Rubber Co. has reduced its lawn and garden market production over the years, but says certain segments remain profitable, like large riding mower tires. "They've been a growth area for us," says Jim Bamer, Goodyear national sales manager for farm and specialty tires. Popular sizes in that niche include 44x14.00x20 and 38x14.00x20, non-radials.
Titan Tire Corp. sold its original equipment lawn and garden business to Carlisle Tire & Wheel Co. earlier this year but remains a big replacement player. Titan will phase out several small sizes over the next quarter in order to concentrate on larger sizes like 41x14.00x20 and 44x18.00x20, according to Ray Evans, executive vice president of engineering, marketing and sales. "There are some smaller front sizes we'll need to supply to our customers, but we're better-equipped to build larger tires."
However, Titan will be able to buy small, "custom-branded" tires from Carlisle "as needed."
Carlisle remains the dominant force in the domestic lawn and garden tire market. One company official estimates the manufacturer's replacement market share to be nearly 75% with some 200 lawn and garden line items currently available. "And we're still growing," says a Carlisle spokesman.
Gotta have 'em
There's more to selling lawn and garden tires than meets the eye, according to Slagle. "They require a significant inventory investment."
One size may be available in 10 different tread designs and two different ply ratings, for example. "You can easily get in over your head if you don't know what you're doing."
The key to selling lawn and garden tires is availability, he says. "Customers don't even ask about price."
Mark Long, secretary/treasurer of Gary's Tire Service Inc. in Martinsburg, Pa., agrees. "If you want to sell it, you have to stock it."
Each spring, the 15-year-old, single location dealership buys a 20-foot container of lawn and garden tires containing at least 2,000 to 3,000 units. "We order enough to last all summer."
In southern Pennsylvania, the lawn and garden tire selling season usually ends in August, Long says. "This year's season lasted longer due to all the rain we received." As a result, the shop's lawn and garden sales rose approximately 20%.
Most lawn and garden tire customers of Gary's Tire are involved in the agricultural industry, according to Long. But the 11-employee company gets its fair share of mom-and-pop customers, as well. "People come in from all over to buy them."
Both Slagle and Long admit that walk-in business can be erratic at times. So it's important to develop a network of regular customers. "You need people out there who will call on you," Slagle says.
When Rob Slagle's father, Bob, started selling lawn and garden tires some 15 years ago, the dealership had few regular clients who were interested in that segment.
"But there was a gentleman by the name of Mack McNichols who called on golf courses for a competitor," says Rob. After the rival dealership closed shop, the elder Slagle hired McNichols and put him to work doing the same thing.
McNichols, now retired, helped S&S build a client list of nearly 100 golf courses throughout Arizona. "We sell 50 to 60 tires a day to golf courses in our area alone -- cart tires, lawn mower tires, landscaping equipment tires. And there's a new course opening every six months."
Arizona, of course, is a golf hotbed, so Slagle has an automatic advantage. But what about lawn and garden tire dealers who don't get many opportunities to develop a built-in customer base and must instead rely on spur-of-the-moment sales?
Let customers know the tires are available first and foremost, says Greenball's Miller. Showroom displays are a must. "A lot of retailers have increased their sales significantly just by displaying what they offer. It opens up avenues since most customers prefer doing business with dealers they already know."
Also, supplement floor displays with peripheral literature like flyers, inventory sheets and brochures. "You have to let them know what else is available."
Failure to do so may send buyers to competitors "out of ignorance." And in such a small, specialized market, that's the last thing dealers want to do.