Starting to sell tires and looking for advice.

[Hands On]

I am starting to sell tires. I picked up a new changer and balancer. I have valve stems, weights, patches and glues, lube and a scuffer for the rims. We have 4 lifts total, two techs. I am looking for any advice anyone has to give.

 

Right now my biggest questions are how much to mark up and how can i offer road hazard. Right now I am using US Auto Force as a supplier for my tires. The prices seem very good, but they do not offer a tire protection program that I am aware of. For pricing I would like to be at or a little above the dicount big boys like Big O and dicount tires. I dont want to get slammed with non stop tire work, but I also dont want to appear to be price gouging and start pissing off customers.

 

Also are there any special laws to folow. Do I need to log the serials in the computer? Does anyone use Alldata and is there a special set up in it for tires?

 

Thanks in advance guys, let me know if I am failing to ask the important questions.

[xrac]

If you have a discount tire near you you can actually check their pricing on line and see if you are competitive. Most tire people try to make about $100-$150 on a set of four tires.

[Mario]

Is that mount, balance and markup for 100-150?

[Tires Too]

Our average tire sale is $160 per tire, our average cost is $105. We make $55 per tire with mounting and balancing included. Road hazard can be a very significant profit center. The national average is under 5% payout rate on road hazard coverage. We do not do a good job of selling road hazard coverage because I am not someone who buys that type of insurance coverage. Make up an in house warranty pamphlet for road hazard coverage. We normally charge 10% of the tire price for road hazard coverage.

[Elon Block]

There was a pretty good conversation about tires and road hazard warranty here, you might also want to read:
http://www.autoshopowner.com/topic/9767-pricing-out-tires/

[xrac]

Our average tire sale is $160 per tire, our average cost is $105. We make $55 per tire with mounting and balancing included. Road hazard can be a very significant profit center. The national average is under 5% payout rate on road hazard coverage. We do not do a good job of selling road hazard coverage because I am not someone who buys that type of insurance coverage. Make up an in house warranty pamphlet for road hazard coverage. We normally charge 10% of the tire price for road hazard coverage.

I think that is an higher than average selling price. Do you do many tires?

[Tires Too]

Tires are a small, but important part of our business. We sell about 30 tires a week - 1500 a year. We are a Michelin, BFG dealer so many of our sales are Michelin brand tires. We sell very little of the cheap Chinese import tires and almost all of our sales are 16, 17 and 18" tires.

[mspecperformance]

I didn't realize you guys see such small margins are tires too. I am now incorporating all of my tire sales with the tire protection integrated. You can't buy tires from me without the getting a tire protection plan. This way I am keeping around 30% gp on a tire and I charge $40+ mount and balance for 1 tire.

[Elon Block]

Here's something to consider with tire pricing:

Tires are essentially a commodity. What that means is: tires are one of the easiest

products/services for your customers to price shop.

And because tires are a fairly sizable investment, your customers will compare your

pricing against your competitors.

Looking at the big picture...

Every single customer is worth tens of thousands of dollars to your business, over

their lifetime of vehicle ownership. That's where the real profit is.

So there's two ways to look at it: You can either sell tires and make a smaller initial
profit on that transaction with the big picture in mind. Or you can price your tires
outside of what the market will bear and hope for the best.

Once a customer price shops and finds your tire pricing is high, you'll lose them

for the rest of their service work because now they have a question mark in their

mind about all your pricing.

[alfredauto]

I sell as many tires as I possibly can, we price them at $30 above cost which includes mount balance valve stems grind and bead seal, free rotate, free flat repair, free roadhazard for a year. We store snow/summer tires free. My theory is when someone buys my tires they get me at their service for life. I charge tax, waste fee, and physical disposal on top of the price. If someone has a car with cheap 14" tires I might only make $60 on the sale, but 14" steel wheel tire changeover takes 10 minutes so no biggie.

 

To be competitive your mechanics need to bust their butt - 4 tires in less than 40 minutes, 20 minutes is ideal. Lazy bones that take 2 hours to put on a set of hoops will run you out of business.

 

Lastly, you can't sell tires that you don't have. Get a supplier that will give you consignment inventory of at least a couple hundred tires. We have about 500 tires on hand and get deliveries 3 times a day.

 

Tires are dirty work, but they rarely come back defective so its easy to gain happy customers.

[Mario]

4 tires in 20 minutes? I am assuming that is a wheel with no corrosion that doesn't need wire wheeled down?

 

I have an older machine, still takes me about 50-60 minutes to do 4 tires. If I get some bad corroded ones it can take up to 90 minutes.

[alfredauto]

I have a good 8" grinder with a coarse wire wheel next to my tire machine. Tire comes off, wheel gets grinded shiny clean, bead sealer applied, new tire on, balanced, rolled to car. 4 minutes tops. 35" super swampers take more time because they're heavy and require the cheetah but a regular 235/60r18 takes 5 minutes done. 195/60r15 takes like 2 or 3 minutes. Like I said your guy needs to be faster than the machine. When the wheels are off look at the brakes, once they are torqued check the tie rods etc. I've had guys take over an hour to do a set of tires, they were lazy plain and simple

[alfredauto]

I made a game of tire training, demonstrate on a spare wheel/tire, have your guys practice on a 215/70-15 until they can do it drunk and tired while blindfolded. Once motor memory is learned they will do tires fast and easy. I'm assuming you have an air powered rim clamp machine. Older center posts take way longer. You also need 150psi of air constantly at about 20cfm. A weak compressor will really bottleneck your operation.

 

You really need to train the guys on tpms, as in where to position the valve to prevent damage. Basically for removal position the stem across from the duckhead, install with the stem right next to it. If you install new tpms stems every time forget beating the clock. We reuse the stems if they look good as in we don't touch the sensor but we put in a new core every time. Rubber stems get yanked out with dyke pliers new ones pulled through with the tool. 10 seconds done.

 

I bought a wheel weight rack a few years ago, best investment ever. Every weight is arms reach from the wheel on the balancer. Trying to reuse old weights was the biggest time waster ever.

[Elon Block]

alfredauto,

That's quite an impressive system you've developed. It sounds like the way Nascar teams train their crew for pitstops. Nice!

 

I believe in systems for everything.

Marcus Lemonis says, "when you put processes in place, you automatically add margin."

Your results are evidence this principle works, in the real world.

[alfredauto]

Thanks Elon. Unfortunately I don't have good systems for anything else but I'm working on it. .

[CAZM]

The current law on DOT#S is that you must present the customer with a card they can fill out and send into the manufacturer. You should be able to get these cards from your tire supplier. We actually register all the DOT#S for the customer here and you should be able to do that by going on the manufacturers website. We are fortunate here as our new invoicing system registers them live with the manufacturer as soon as we close the invoice.

[AJFA]

$30.00 to $35.00 per tire mark up, $25.00 to $30.00 per tire labor for M&B, $40.00 for run flats.

Stems or cores at $3.00 each. TPMS kits charged accordingly at 60%.

Always clean wheels with a 4" wire cup grinder.

If they send Tire Rack tires we always perform the higher priced alignment.

It has been said selling tires is the highest margin job for the time spent in most shops.

Sounds like we are charging market prices.

We do lots of tires for our size shop, convenience to our customer.

Dave

[Elon Block]

Thanks Elon. Unfortunately I don't have good systems for anything else but I'm working on it. .

alredauto, the good news is: you're working on it. And you may have more systems, in place

than you give yourself credit for. Otherwise, you wouldn't have the packed calendar and

the loyal customer base, that you have. So, good job on that!

[Handson]

I checked ked with my local big tire shop he tells me sometimes they charge 10 to mb sometimes 40....

 

How do I find out about paying the extra tire tax?.

 

Elon I'm liking you more and more. Sure we can't talk after business hours when I can focus?

[Elon Block]

I checked ked with my local big tire shop he tells me sometimes they charge 10 to mb sometimes 40....

 

How do I find out about paying the extra tire tax?.

 

Elon I'm liking you more and more. Sure we can't talk after business hours when I can focus?

We do our best to model what we teach. Here is one thing we teach. "You must

stay true to what's important to you." For me, family comes first. I therefore, operate

my business during normal working hours. (I'm typing this early on a Saturday

while the rest of the family is getting ready for today's activities. However, above

and beyond that... I have normal working hours.)

 

The second thing we've learned is: If a business owner cannot set aside

devoted time to work ON the business instead of IN the business, he/she

will not have the devoted time to implement our coaching and training.

So, we may not be a match, until that commitment can be made.

 

Coaching and training is a participatory sport. Since our work with our clients

is action-oriented - not just theoretical conversations, we can only work with

business owners who are committed to carving out time to focus their attention

on the activities required to build their dream business - whatever that looks

like for them.

 

In case you didn't see it, here is my answer to your other question about this:

http://www.autoshopowner.com/topic/10134-service-writer-training/?p=25888.