Why Amazon.com Will Have Problems Taking Over the Replacement Tire Market

Bob Ulrich
Posted on September 20, 2018

Amazon.com Inc. does not own a single retail tire outlet. But it suddenly finds itself with potential access to more than 1,500 of them.

Monro Inc. says it will eventually make its 1,174 tire dealerships and muffler shops in 27 states available to install tires purchased from Amazon.com. Sears Holdings Corp. also has partnered with Amazon.com to offer installation services at its Sears Auto Centers in the U.S. When the announced store closings are completed, there will be an estimated 356 Sears Auto Centers in all 50 states.

With the collaborations, Amazon has shown it is serious about selling tires. I’m not sure, however, how many more retail establishments in the U.S. it can partner with.

My understanding is that at the very least, the Big 4 – Michelin North America Inc., Bridgestone Americas Inc., Goodyear Tire & Rubber Co. and Continental Tire the Americas LLC – are not selling to Amazon. They also expect their dealers not to do so, either.

I know of a Tier 3 manufacturer who has refused to do so, and is watching its dealers closely to see if they break ranks. For now, installation-only services are acceptable.

As for Amazon, the big question is, where is it getting its tires? It sells Goodyear, Bridgestone and BFGoodrich, among other major brands. It also offers lesser tier tires. Sears admittedly sells its DieHard brand through Amazon.com, but other than that, no other manufacturer has officially partnered with Amazon.com.

Without the ability to buy Tier 1 tires directly from the manufacturers in order to take advantage of economies of scale, or indirectly through their independent dealer networks, it doesn't seem likely Amazon.com will ever rule the replacement tire market.

Related Topics: Amazon.com, DieHard, Monro, online tire sales, Sears Auto Centers

Bob Ulrich Editor
Comments ( 9 )
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  • Thomas

     | about 9 days ago

    Amazon gets its tires from wholesale distributors that feed sales to one internet seller in particular in Trevose PA. The internet seller has struck deals with wholesalers and Amazon acts as the seller for the internet seller. Other-words, the tires are getting stepped on a few times. How can they sell so cheaply? It's because wholesalers are getting deeper discounts, and the internet seller is offering the same price to pay as the tire retailer. This essentially replaces the installer retail pricing model. Amazon will reward the buy box sale to their own name, so if you wanted to get into this game you cannot since they control the pricing as well. Top brands are being sold under the same premise. To say that Amazon will not get ahold of these brands?? Ha... This will depend on how the MFG and distributors police the one internet tire seller in Trevose PA!

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