Mike Power says this about his retail tire shop: “We have the world’s worst location.”
His dealership, Bear’s Tires, isn’t on a main road. The business is tucked away in an industrial park where Power says no customer would even think to look for a tire store. And local regulations forbid him from hanging an oversized sign to try to catch the eye of customers who may be in the area.
But none of that bothers Power, who has owned Bear’s Tires since 1994 and has worked there since 1987.
Behind the shop’s two bay doors are four service bays. And for decades, the business was a tires-only operation. Only recently has Bear’s Tires added an alignment rack.
By virtue of its location in San Diego, Calif., Bear’s Tires is heavily focused on high performance (HP) and ultra-high performance (UHP) tires. At least 75% of its business is HP and UHP tires.
That number has been growing over the years, says Power, and he attributes that growth to original equipment fitments.
“I purely believe it’s the auto manufacturers. I always like to use Mini Coopers as an example. When they first came out, they had 15-inch (tires) on them. You can (now) get them with a 20-inch tire for a little tiny car. Most of them have 19s on them, which are still mostly ultra-high performance sizes. People like the look — the aesthetics.”
But that doesn’t mean consumers know much about the performance capabilities of those OE tires.
“There are people who are forced to go with summer tires” because tiremakers don’t yet offer all-season HP or UHP tires in their particular size. But even in sunny California, Power says there are customers who want the assurance their tires will perform in rainy conditions and an all-season HP or UHP tire is a better option.
Power says some consumers break it down this way. “’It very rarely rains here. I’ll just go with the summer tires.’ They like the way they handle — the performance aspect.”
There are times when treadwear and having a longer-lasting product is important to the customer.
“If we mention they have a summer tire and they’re only getting 15,000 miles (on them,) but there’s an all-season option and they might get 30,000 miles,” they could nearly double the lifespan of their tires.
And, says Power, “they’re more cost-effective typically because in most cases, the ultra-high performance all-season is a better value.”
As part of his customer interviews, after collecting the year, make and model of the vehicle, Power asks if there’s anything in particular they’re looking for in their next set of tires. Some customers flatly say they need the least expensive option. Others want more mileage. Some want the ultimate in performance. Those answers “will typically narrow down your options.”
Sometimes a customer has a specific brand of tire in mind. Power says he’s learned not to talk a customer out of that preferred brand.
“We have products we like and sometimes the customer has something they like that we don’t like. I’m not going to tell them it’s horrible. People like what they like and there’s got to be a reason. You don’t want to alienate somebody by telling them, ‘This is a better option.’”
But Power says it’s fine to ask the customer questions. And sometimes the answers to those questions can open the door to offering an alternative.
Pricing and tiers
Power typically keeps about 1,800 tires in stock, though his inventory is larger than normal now with about 2,100 units on the racks. Even with that many tires in stock, he says a large percentage of his sales are special orders. He gets twice-daily deliveries from a U.S. Autoforce LLC warehouse that’s 15 minutes away from his store.
Bear’s Tires is mostly a retail operation, but Power also works as a tire wholesaler to other automotive and specialty shops nearby.
And though his tire inventory includes products in tiers one, two and three, he describes Bear’s Tires as a mid-range shop. He says mid-range products generally offer the same technology as top-tier products, but don’t come with top-of-the-line pricing.
But pricing has become trickier in the years since the pandemic and subsequent supply chain disruptions.
Power says historically, “These price increases have always been across the board — and low-cost, mid-range and premium (tires) have all gone up. In this instance, yeah, everything went up like crazy, but at least the low-cost stuff is dropping down, where the mid-range and premium keep going up or they’re stabilizing.
“There’s a huge gap between low-cost and mid-range, especially in ultra-high performance.”
So, has that opened the door to more customers choosing the lowest tier products?
“Most people are saying, ‘I don’t want the bottom of the barrel. I want something good, but I can’t afford the top.’ A lot of people fall in that mid-range and that’s where our bread and butter is. We do a ton of Falkens because they have tires that fall in that market.”
New opportunity in alignments
In the last couple of months, Bear’s Tires has installed an alignment rack in one of its four service bays.
Power says he hasn’t even begun advertising the service but has offered alignment services to its nearby wholesale customers. And so far, Power says business has been brisk.
“It’s been crazy — way busier than I thought,” he says. “I always knew we referred a lot (of alignments to another shop) down the street. But I’ve always wondered how many showed up” and had the work done.
Adding alignments is just the latest evolution in the Bear’s Tires story.
For years, it was a business built on used tire sales and when Power took over as owner in 1994, he started adding some new tires to the mix. It took less than 10 years for new tires to take over the majority of the company’s sales.
Eventually, Power says the complexity of tire sizes, along with liability questions, made it a relatively easy decision to get out of the used tire business entirely.
And while other tire dealers have turned to automotive service as an additional profit center, Bear’s Tires refers all of that business to another independent repair shop that’s nearby. That same shop buys all of its tires from Power through his wholesale operation.
Power says he doesn’t have the space to add automotive service and thinks doing so could create many more headaches. He prefers to “keep it simple.”
Adding alignments seemed like an appropriate new revenue stream, he says. But Power has been a bit stunned by the prices some other automotive shops near him are charging for alignments. He’s even had another business owner, who charges $240 for an alignment, accuse him of undercutting the market.
Power says he’s charging other shops $60 for an alignment. He plans to raise the price eventually, but for now is using the lower price as a marketing tool to help drum up business.
“I think people are trying to get rich. People have their business models and that’s fine, but it’s just not ours. It’s probably an $80 transaction. That’s what it should be, if you calculate your man hours and the time it’s on the rack.
“Let’s say it (takes) a half-hour. If you charge $120 by the hour, it’s $60. (Charging) $240 for something that takes 20 minutes doesn’t make sense to me.
“If you treat people well and give them good prices and you’re not taking advantage of them, they refer your business.
“We’re not a sales shop. We don’t try to sell people anything. We’re here to help people out, meaning if they don’t need it, we need to let them know they don’t need it.”
