TIRE BUSINESS

[69mach1]

read the posts down a few
"free tire rotation" would you rather give something away or break even
labor / parts it is no different if you give away $200.00 you will never make that up.
and yes i have researched this very hard you also have to look at the type of work you do, taking 4 tires off a car or 1/2 ton 4x4 is not the same as a 24' straight truck
our billable labor 4 to 1 on this and brake work is twice that.
the average brake job parts is $1200.00
labor up 4 hours get that from a mini van
and thats one axel, am i leaving money on the table yes, but i also took away 16 brake jobs from the guy down the street this month, by selling him the same tires he use to buy there. and if your worried about bring down gross put the tires in sublet has no effect on parts :]

[john]

I've seen this nut cracked a dozen different ways. Each one of us has a different market environment and a different problem to solve. I am not sure that there is one answer to this issue. And don't loose sight of the fact that this is not like selling cars. Sales "programs" work great for selling new cars -- selling service is about price and credibility - relationships - long term trust and good treatment (advisor professionalism).

I know a rural dealer (30 miles to the nearest competition)that gets a healthy 30% markup on tires and sells the dickens ($64/hr) out of steering, suspension, and brakes to boot. I also know a city dealer (tire store and dealership on every corner) that virtually gives tires away at cost just to get at that repair business ($85/hr). But in each case, the market is dictating what can be done.

This is a classic market driven problem that requires managers to earn their title "manager." We all have to run the numbers on the competition, the customer reaction to our pricing, the secondary sales created, and fold in the effect of factory programs and incentives in order to craft a sales policy that will generate the best revenue stream and yet be sustainable. Having said all that, the most favorable market does not excuse unprofessionalism in service advisors - and professional, discisciplined advisors will turn an unfavorable market into GOLD.

So --- after all the market analysis and sales strategies are developed (sales programs), good advisors will make almost anything work, bad advisors will cost you money. Customers buy from advisors they trust (relationship)and price is less an issue. That is the bottom line.

Spend time developing a professional, disciplined sales team and any reasonable sales program will work.

John
pika68@aol.com

[srvmanrick]

WE ARE A SMALL SINGLE FRANCHISE GM DEALER THA HAS ABOUT 30 COMPETITORS WITHIN 20 MILES
WE SELL OUR TIRE AT 25% OVER COST & 15.00 LABOR. WE STARTED SELLING TIRES ABOUT 12 MOTHS AGO. WE WERE SELLING ABOUT 12 TIRES/MO. NOW WE SELL ABOUT 12/WEEK. THE KEY IS GETTING YOUR TIRES AT THE RIGHT PRICE. ALSO ALL OUR TIRES ARE CONSIGNMENT.
NO INVENTORY COST. (WE GET OUR TIRES FROM JACK WILLIAMS & ARE WITHIN $3-$5 /TIRE FROM THEIR PRICE INSTALLED!!!) TIRE SALES ARE A MATTER OF CONVIENIENCE NOT PRICE) I ASKED ABOUT 25 CUSTOMERS, IF I COULD GET YOU TIRES FOR YOUR CAR, THE SAME DAY THEY WERE HERE FOR OTHER SERVICE. HOW MUCH MOORE WOULD THEY BE WILLING TO SPEND? THE ANSWER WAS $5-$10 PER TIRE.

[Mike Vogel]

Customer convienence is definitly the key.
70% of customers will buy tires from the firt person that recommends it to them.
More importantly is that 70% of customers will service their vehicles at the place they bought there tires from.
I'll take a little less now for more service & repair business in the future.

[Richard]

I understand free rotation. It is supposed to be an opportunity to sell brakes or chassis parts. Same for a reduced price oil change. We mark up our tires $15, and Service charges the same to mount them. We don't stock ANY tires, as the local tire warehouse is 20 mins away.

[This message has been edited by Richard (edited 11-07-2005).]

[This message has been edited by Richard (edited 11-08-2005).]

[STEVEH]

We mark up tires about 20%. I see alot more work involved in stocking tires or picking them up locally than it is to grab a oil filter off the shelf. especially with the understaff issues we all face today.

[NEWBMANAGER]

HOW MUCH DO YOU GUYS PAY FOR A SPIFF ON A
SET OF TIRES?
THANKS

[Mike Vogel]

We are on teams. We pay each tech on the team(3) and the asm $1.25 each tire.
They have to meet a minimum of 50 tires sold per team/asm per month to qualify otherwise no spiff/bonus is paid.
This has helped double our tire sales.

[NEWBMANAGER]

THANKS

[David Cates]

I think a real key to this business is following up on vehicles that have been in the shop but were not quite ready for a new set of tires.

If the depth is measured, and recorded (as an opcode or perhaps denied work), then we should be able to gauge, based on mileage, when those tires should be replaced, and contact the customer accordingly.

Seems like this would always give us a steady flow of potential customers who need tires and who have been in our dealership doing business with us, making them more apt to return for work.

I think, as a consumer, I would like that kind of service.