Tires 101: Inventory
Have you ever stood in your shop, surveyed the space and thought about adding tire services to your business model? Maybe you’ve tossed around the idea of tire sales? If you’ve decided to add tire sales, that decision can give birth to many other questions: How do I know what to carry? How many should I stock? Where will I store the tires?
Though your shop may be service-oriented rather than tire-oriented, there are still viable tire sales and inventory options available to you, including partnering with a distributor.
“I started selling tires a month after I bought my business,” said David Haney, owner and operator of Oil & Lube Express in Magnolia, Arkansas. “The first Saturday I had it, three customers within the first hour, asked if I sold tires. I told the first two, ‘No, I don’t.’ To the third person I said, ‘Not yet but I’m going to.’”
Haney got on the phone and called a friend who put him in touch with American Tire Distributors.
“We serve various channels of distribution,” said Steve True, vice president of Sales for American Tire Distributors (ATD). “Our primary channel is what we call the independent tire dealer channel, the ‘mom and pop’ shops, though some are quite large.”
Because tire sales are an added service for these shops and not a primary focus, space may be the No. 1 issue for many operators.
“Quick lubes just don’t have a lot of space for tires,” True said. “If you are challenged for space, we see a lot of pods or containers that could be locked from the outside on the property.”
You could also take a page out of Haney’s book and try an out-of-box idea.
“I put a two post lift on the backside of shop behind my third bay,” Haney said. “I bought an RV canopy so I could pull cars in, the lift was out of the weather and I had my balancer and changer just inside the third bay. That worked great for me. I did that almost three years. It got to the point where I needed to build the building or stop doing tires. I couldn’t handle all the business I was getting on that two-post lift.”
Another challenge is the diverse customer base that rolls through the bays.
“When I started in this business, you could say, ‘These 12 tires might cover 70 or 80 percent of customers’ needs,” True said. “Today, with all the sizes, speed ratings and directional tires, the market is very fragmented.”
Despite space issues and market fragmentation, quick lubes have a certain advantage when it comes to knowing what to stock in this informed guessing game because they have a pretty good idea of what rolls into their bays.
“Quick lubes keep really good records of the traffic that comes into their facilities,” True said. “You could use invoices or repair orders of the vehicles if they have the make, model and the trim level. Then, do a study that lets you see what’s coming into your shop and the tire sizes that match them.”
The customers that a quick lube could potentially sell tires to is diverse. It can be difficult to know which tires to stock.
“You could stock 40-60 that could possibly be the ‘hottest movers.’ Realistically, I would say a quick lube needs 100 tires,” True said. “That’s an investment of between $10,000 and $15,000.”