Auto Service World
News   August 23, 2016   by Alan Beech

COMMENT: There’s gold in those tires!

Shops that are reluctant to get into the tire game need only crunch the numbers to see the opportunities it opens up.


Tire workBy Alan Beech

A lot of automotive repair and service shops have made the conscious decision not to get too involved in selling tires, preferring instead to sublet what they see as low-margin sales to tire specialists.

They’re working on the theory that tires are a lot of hassle for very little payback.

But that kind of thinking can have serious implications for a shop’s bottom line. As many generalists have discovered, if you don’t offer tires, you’re only hurting yourself.

It’s easy to fall into a rhythm of complacency while running your own business. Too often we prefer the status quo over the uncertainty and risk that change brings. Some people would prefer to leave things the way they are, even if they’re not great, rather than rock the boat with something new that could turn out to be disastrous.

But if you’re not in the tire game, I’d encourage you to take a leap of faith and see how much your business can grow.

Meeting a need

Tires are essential to maintaining a well-rounded shop.

Mechanical work pays the bills, but the only way to maintain a healthy client base is to meet all of your clients’ needs. About 78% of customers have their vehicle serviced where they buy their tires. If you’re not selling tires, you’re letting all of those potential clients walk away.

The automotive repair and service business has radically shifted over the past decade. Tires now drive peak business season. Years ago, aftermarket sales were spurred by winter tune-ups and air conditioning repairs. But today’s cars are built very differently, without many of the components that would go “out of tune” over time and cause the kind of running problems that necessitated a visit to the shop.

Without things like the distributor caps, points, and rotors, our busy “tune-up” season has morphed into something completely different. Now our busy season is based on tire changes. Our clients switch to winter tires in October, November, and December… and back to all-season tires in March, April and May. Ideally, we’d like to see our clients’ vehicles three or four times a year, like we used to. But those days are gone. By providing tires, though, we have a very good chance of getting at least two visits a year. And we can all-but guarantee those two visits if we offer off-season tire storage – either in our own facilities or through a third-party tire storage company.

Statistics show that people who pay for tire storage spend more than double on vehicle maintenance over the course of a year than those who do not. That alone should be encouragement enough for you to start offering this service!

Evolving business model

As for the sale of tires themselves, there’s a common misconception that they’re the domain of specialty tire shops. That may once have been the case, but no longer. These days, there’s a wide spectrum of shops in the tire game. Even new-car dealerships have recognized the opportunity.

I come from a unique background when it comes to tires. I used to run a specialty tire shop. At that time 60% of my business was tires. I eventually made the transition into a full-service repair shop, ith my tire volume steadily declining to where it sits now: around 18%. I made that transition knowing that the specialty tire shop’s business model was becoming  thing of the past. To succeed in the automotive aftermarket these days, you must be able to meet all of your clients’ needs. People with increasingly hectic lives demand convenience.

Don’t be intimidated about what you have to learn. There are resources to help you learn all you need to know about tires. I myself have offered tire workshops numerous times to help smooth the transition as much as possible.

It’s been shown that about 80% of clients will buy tires from the first shop that recommends them. In other words, there’s no secret formula to selling tires. You just have to go for it.

Get equipped

You will need to buy the right equipment to be in the game. The basic tire equipment, including a tire machine and a balancer, runs about $10-15k to get started. Whether or not you intend to make tires a top priority for the shop, this equipment is necessary to properly service your clients’ vehicles.

Financial success hinges on getting your numbers right, including covering all of your labor costs. I suggest you set a price for a “tire kit” that covers all of the extras associated with tire change-overs. Also set a firm but fair price for incidental services, such as tire repairs.

Tires-Filling Air-LRYou’ll quickly learn the basics of tire repairs. As you’ll find out, not every tire can be repaired, and you should never plug or patch tires from the outside. Always plug the tire from the inside, and then rebalance with a new valve stem. It won’t take long before you’ll know instinctively the best options for your clients.

The bad news is that you will not be able to make the same margins as you do on mechanical work. The good news is that the work can be done in a much shorter time period, and can be completed by apprentices. And by selling tires, you’ll have the opportunity to offer additional services such as alignments and vehicle inspections. Every time the wheels come off on a vehicle that enters your shop you should be doing an inspection. Most vehicles have work that needs to be done. You just have to find it and suggest it to your clients. Don’t leave that money on the table by neglecting the inspection.

About 40% of the service work you do in your shop takes place around the wheel. By adding tire sales to your repertoire, your mechanical work can’t help but grow.

Marketing your tires is fairly easy with a “tire finder” app that you can add to your website. This will allow clients to discover the different brands and models you have available in store. Most tire distributors will make the app available to you once you sign on with them.

Selling tires is a necessary step that your business needs to take if you intend to grow and expand in the future. In order to best meet your clients’ needs and to fully service their vehicles, you must be able to offer them tires.

Don’t continue to let business walk out the door. Once you start selling tires, you’ll never look back!

Alan Beech is a management consultant and the owner of Beech Motorworks in Hamilton, Ont. You can reach Alan at alan@beechconsulting.ca.

 


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