Truck tire sales are up, but what about profits?
Sales may be slowly inching upwards, but profitability remains a big challenge for independent truck tire dealers.
www.moderntiredealer.com recently spoke with some of the country’s most successful truck tire dealers to find out what’s inhibiting the generation of additional gross profit.
“We’re starting to see larger purchases,” says Dennis Dickson, president of Indy Tire Centers in Indianapolis, Ind. “Usually the national account guys come back first, but we’re starting to have other customers order in excess of 100 units, and these are people who have not done a tremendous amount with us over the last 12 to 18 months.
“Our challenge right now is profitability because of the margins we have to sell at. To move the ticker, you need to have pretty good sales.”
Jim Smith, president of Exit 11 Truck Tire Service Inc., in Richfield, Ohio, says his dealership’s gross sales have increased slightly, “but I think that’s due to an increase in the cost of the tires. Our costs have gone up and we’ve passed that on, so sales have increased, but the bottom line hasn’t.”
“We have customers who are buying and actually running short on equipment,” says Garry Heintschel, president of Heintschel Tire & Service in Texarkana, Texas. However, his customers, like many tire dealers and manufacturers, are operating on lower inventories, he adds.
“We have to work with our suppliers much more closely than in the past. It’s a balancing act.”
For more hard-hitting comments from truck tire dealers about sales, profitability and other topics, see the August 2010 edition of Modern Tire Dealer, available soon!