What more did Tire Source need?: Counter space, cable TV, the right oil spouts
It took two years for Tire Source to build its fourth dealership, which Modern Tire Dealer chronicled in its November 2002 issue. All the ups and downs from the ground up were recorded for posterity.
One year later, are business partners Drew Dawson and Tom White happy with their decisions? More importantly, is the shop making money? We checked in with the pair to find out the answers.
The store, located in an affluent area in Montrose, Ohio, near Akron, is servicing an average of 40 to 45 cars a day; it sells an average of 25 tires a day, less than one of the other Tire Source outlets but more than two of them.
"I think our (customer) projections were pretty close," says Dawson. "We will make money here in 2003, our first calendar year in business."
To help build and retain their customer base, they rely on direct mailings almost exclusively. They also advertise in the local weekly newspaper, the West Side Leader. As a Goodyear Gemini dealership, Tire Source benefits from Goodyear Tire & Rubber Co.'s national radio and television advertising.
"We mail 4,500 pieces a month for our four stores," says Dawson. "We don't mail as much from (the new location), but we don't have the database yet. We get a great response and incremental gross profit.
"For example, in May, we sent out 500 pieces to our existing customers, and we generated 162 invoices, a 32% response rate, just from this store."
What would they do differently? Apparently very little, although they have tweaked a few things.
"We'd give the service manager more counter space," says Dawson. "We only have one small service desk, and could have used more service space for our clip boards. So we put up a metal racking system for them."
"At one point, we had the clipboards up front," says Brian Erickson, the shop's general manager. "We had them up there for a year, but functionally, it didn't work out."
Most of the changes were "small, operational stuff," says Dawson. They included:
* adding a computerized oil, lube and filter reminder system. The tags also can be used as marketing tools.
* adding a transmission flush machine and a tire repair station.
* changing the oil spouts. The supposedly no-drip metal spouts were leaking, so the same company replaced them with rubber flex spouts at no charge.
* buying a satellite dish. "We didn't know we couldn't get cable here," says White. "You take it for granted you can get it. We just dropped the ball on cable." Since they were going to have to wait up to 12 weeks to have a cable run underground, they opted for satellite service.
* installed a baby changing station in the women's restroom.
"Ideally, we would have liked to have 10 feet more of length and width," says Dawson. "We have the eight bays we wanted, but they could be larger. The space is too confined."
Six bays were out of the question because it didn't maximize their sales opportunities. "It came down to economics."
One thing that worked out exceptionally well was the way the building was heated. "It was a horrific winter, but it was really warm in the shop," says Dawson. Tire Source uses radiant tube heating, which heats objects in the bays, not the air. Heated objects retain their heat longer.
Also, the store's fresh air exchange unit doubles as a thermostatically controlled, 300,000 btu furnace.
"The only negative thing that happened is Super Kmart closed down," says Dawson. "But we hear they may be replaced by a Costco (there's also a Sam's Club nearby). That's fine. We'll take the traffic every time."
"Plus, a Costco or Sam's is limited to just tires," says White. "They do very little undercar and underhood work."
Would they build from scratch again?
"Under the right circumstances, yes," says Dawson. "But not on our next project," adds White. "I wouldn't build two back-to-back. It's a lot easier to buy an existing building with an established customer base. Your break-even comes much quicker."