Jim Smith is in an enviable position. He doesn’t have to pursue customers; they come directly to him. Smith’s dealership, Exit 11 Truck Tire Service Inc. in Richfield, Ohio, is located next to a Pilot Travel Center that sees hundreds of trucks each week. When those trucks need replacement tires, they simply roll across the lot to his shop. What’s more, Smith owns the land on which the travel center sits!
This unique arrangement “has opened up a lot of opportunities,” says the veteran tire dealer. With a built-in clientele, he has time for other profitable pursuits, like round-the-clock highway service and oil changes for trucks.
Truck stop triumph
Smith, who turned 50 last year, didn’t build his empire overnight. He started changing truck tires for another commercial tire dealership while in high school. In 1981, that company closed.
“I went out and bought a service truck at an auction and started doing mobile service for all of the people the dealership had been serving,” says Smith. “I got started on a $5,000 note.” His truck cost more than $3,000.
At the time, Richfield, which is halfway between Cleveland and Akron, was a huge trucking hub with a number of high-profile terminals, including a major one operated by Yellow Freight, which turned out to be one of Smith’s first customers.
Smith needed a base of operation and soon began working out of his dad’s gas station. “He had a guy who would answer the phone for me and then page me. I’d call in and get my message and then call the customer, all from a pay phone,” he says.
He began storing tires in a trailer. “I started maintaining tire banks for companies.”
Business grew and pretty soon “I was bursting at the seams at the gas station. I needed more space.”
Smith, his father and three other investors formed a partnership, pooled their money, bought a plot of land near the old Exit 11 on the Ohio Turnpike, and built a tire shop. Smith eventually bought out his partners and began buying adjacent parcels of land.
“I joined them together, split them into lots and sold the lots.” During this multi-year buying-and-selling phase, Smith even bought a motel and restaurant next to his shop and leased them back to their owners.
His next business deal would change the complexion of his company. “I approached Pilot about putting a travel plaza here.”
Pilot had been trying to build a plaza in another part of Richfield, but couldn’t get the proper zoning approvals. “The president of Pilot flew in and looked at our site. He liked it; I didn’t have to convince him.”
Smith helped Pilot navigate Richfield’s somewhat Byzantine zoning code and in 2002, Pilot opened the new center several hundred feet away from Exit 11’s front door. “It took them 157 days from putting the first shovel in the ground to the day they opened for business.”
The center has 10 fuel bays, several truck scales, a convenience store and even a Wendy’s fast food restaurant. “It’s been good for driving traffic to my door,” says Smith, applying a large measure of understatement.
Inventory plus teamwork
The travel center’s proximity opened new doors for Smith. It enabled his company to join Michelin North America Inc.’s program for tire dealers who service travel plazas, which gave him direct access to Michelin products.
Exit 11 began selling Michelin X One wide-base truck tires several years ago. The X One program is starting to take off, says Smith. “They’re expensive to inventory, but we’ve devoted a fair amount of our resources to carrying them.”
Truckers who run X Ones are more likely than traditional truck tire users to seek immediate help in the event of air loss, he notes. “The X One is really easy to gauge.”
Tire work isn’t Exit 11’s only revenue stream. The dealership performs a lot of preventive maintenance for truckers who visit the plaza. “Some of these guys are parked for 10 hours. If we can do an oil change, they don’t miss any time.
“We’re not too deep into mechanical work; it’s a different animal. But we’re going after oil changes on tractors.”
Exit 11 performs around 12 oil changes a month. To boost that number, he plans to charge $199 for an oil and lube, which he says is $50 less than the going rate. (Each oil change requires 11 gallons of oil, he says.)
“It’s the cost of building some traffic. I’ll be able to make a small mark-up. Once we get some volume, we’ll put in bulk oil tanks and bring the price back up.”
The dealership’s most profitable offering is 24/7 road service. The company runs three trucks staffed by veteran techs. “One has been with me for 15 years.”
Smith credits the success of his road service business to two factors: inventory and teamwork.
The dealership stocks at least two of each tire it sells. “When you’re broken down on the side of the highway at 2 a.m. you can’t wait for a tire to be ordered. My guys have access to anything we stock.”
All emergency calls are routed to a voice mail paging system via a single phone number. (“We only have to advertise one number. We don’t need a day number and a night number.”)
Techs, who take pagers home with them nights and weekends, call the customer back, usually within 10 minutes, and proceed with the job.
“My guys know what’s in inventory, how to quote the job, how to complete the job and how to process the transaction. They generate a lot of overtime. Even if they don’t get a road call at night, they get paid a minimum rate to monitor the pager. If they get a call, it’s minimum two hours overtime.”
No tech is on call two nights in a row, except on weekends, which they take turns working. “You can be out all night on calls.”
Smith says he offers road service on an as-needed basis. “A lot of dealerships base their business on moving units. In a perfect world, when they get into the office in the morning, their trucks are loaded. We don’t have any trucks loaded up. When we get the call, we put the tire in the truck and go.”
This approach enables Exit 11 to pinch hit for other dealerships whose service trucks are tied up on calls. “We’ve found a niche in just being available.”
Before Pilot set up shop nearby, local trucking companies and terminals comprised the vast majority of Exit 11’s business. Drive-in business from the travel plaza now makes up more than 50% of the dealership’s total revenue.
“I don’t see big trucking coming back as it once was,” says Smith. However, his contract customers are fiercely loyal.
One of them, Dan Mongalier, owns 10 trucks that he leases out to a local FedEx hub. Mongalier says his business, Pistol Transport, does about $15,000 a year with Exit 11 “and that’s just buying tires, not repairs.”
Pistol’s trucks run cross country. “We pull doubles all the way to California. I have two guys who go from Columbus, Ohio, to Chicago.”
Mongalier says he doesn’t mind paying extra for top-quality truck tires.
“You spend more up front than you would on cheaper tires, but they last 65% longer. We once went 400,000 miles on a set of BFGoodrich tires we bought from Jim.
“When you do that many miles, you have to look at the big picture. You have to trust in the tire and you have to trust your tire dealer.”
Smith is banking on customers’ trust to move his seven-employee dealership forward.
He expects his clan to play a major part. His oldest son, Clinton, 18, already works in the family business, processing inventory and changing tires. Two younger sons — Justin, 14, and Jack, 11 — “are very tire-oriented, too,” he says proudly. (Smith’s wife, Linda, also works at the dealership, handling receivables, payables and other administrative duties.)
“What I’d like to be able to do is add business hours. I’d like to go to a second shift and then a third shift. It would be nice to have the volume to keep the shop open 24 hours a day.” ■