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How do you sell your tires?

 

I've heard many things like flat 30% over cost, $20 over cost to $0.00 if road hazard warranties purchased on top of etc.

 

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The first shop that I bought was a tire shop. In the 90's we charged tire cost + $15.00 each tire -mounted, balanced and installed. It made money because we were the only game in town.

 

In 2005, we charged tire cost + $40 each tire mounted, balanced, installed. In 2005 we now had two big tire discount stores that entered the marketplace. Each a few blocks on each side of me.

 

These two are in fierce competition with each other. They have the buy 3 get 1 free deal, they have the free tire rotation deal, they have the free flat repair deal, they have the "free diagnosis" deal, and the latest is free oil changes to anyone. I cannot make sense of this free, cheap, discount business model other than some business models are to focused on car count with hopes of constant and continuous up selling for profits whether vehicles need it or not. I believe in sales, but only of what's truly necessary and beneficial. I have to believe in the sale and it's greatest good to the customer and so must the service writer. Otherwise it's unjustifiable in warranting and can't be defended.

 

The bottom line at the end of the day is, was the business profitable or did we just see alot of people and alot of cars today. In my opinion, one way or another these discount places are overall profitable. Whether through up sales or kickbacks from tire manufacturers it looks like they are making money. They are selling "cheap, free, complimentary, discounted" the assorted wording is semantics.

 

Oh yeah, I forgot one of them was bought out a few months back by the other. Initially I viewed it as a game of who wants to go broke first. But then I realized that a business can save alot of money by being known as "cheap, discount, etc." and minimally spend on promotion and marketing, good sales people and technicians if you have "discount prices". Cheap is its own class. Cheap has its dedicated followers. Cheap is everywhere.

 

Just as people wanting high quality and demanding excellence and are willing to pay are everywhere.

 

I feel that quality of service and quality products should dictate my market share. I like things done in a proper sensible manner. I like to make money on time spent and products. I believe in profits for goods and services sold regardless of the competitions tricks and gimmicks or semantics.

 

Free, discounted, complimentary has never been my business model. Neither has cheap, inexpensive or any other form of discount. My business philosophy has been "does this make sense to me and how does it add up?", "will the customer be pleased with the final product?", "I'm not selling price." and others.

 

I only sell a couple hundred tires a month now and it only adds up to 17% of our total revenue. I want it under 20% because it is an extra $10,000 per year in shop insurance if it goes above 20%. That is alot of free work one way or another to pay that $10,000. if I hit 20% or above on tires. Less is more for my case.

 

As for pricing on tires as of 2012, I make no less than $40.00 per tire markup. With no less than $40.00 per tire mounted and road force balanced, installed. On a set of tires I make minimally $320.00 per 4 tires and up from there. That is the average car. On higher end and more expensive vehicles and tires we charge more due to higher risk factors. This may sound unbelievable but it is the truth. Some may think it's excessive profit on tires. I think not. I can afford to damage wheels, break tpms sensors, destroy beads etc., but the guys are so well trained on the best equipment on the market and we rarely have damages. I have paid for one tire out of pocket that an employee broke that I can remember in the last five years and one sensor.

 

I am my own sensible road hazzard insurance company as well. I strictly sell Michelin, Continental-General and Perilli when I sell tires. I piggy back off manufacturers warranties and otherwise I am my own indemnity company. I can afford to be because I am profitable. Once upon a time I was not and that's because I foolishly followed a non-sensical trend and bad advice as far as I was concerned.

 

Come to your own verdict, but I will never go home to tell my family "Sorry no money for groceries because I gave my time, money and potential earning capabilities away."

 

P..S. The phrase "Go for broke", is bad advice.

 

 

How do you sell your tires?

 

I've heard many things like flat 30% over cost, $20 over cost to $0.00 if road hazard warranties purchased on top of etc.

 

Sent from my SM-N900P using Tapatalk

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I use an Excel spreadsheet. If you have some basic skills in Excel you can set it up where you key in the size, quantity, and your cost to get the customer price. This gives me control to add more to low profile sizes due to the additional time required or big mud tires due to the extra cost in weights required. You could use a dollar mark up or a percentage mark up or a combination or as your cost goes up have the markup increase.

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I mark up every tire a fixed dollar amount. I do offer free flat repair and free rotation. Its not to be the cheapest joint in town, its to ensure my tires last as long as they should. My customers come in for an oil change and I rotate my tires for free. The tires last longer, I'm making sure their pressures are good, and any front end issues get resolved right away. Like Les Schwab said people don't buy Michelin tires they buy my tires.

 

I love doing tires, we can bang out 12 an hour and the comeback rate is so low I can't even measure it. There's no greater profit center than tires, period. $400/hr x 8 hrs = $3200/day profit. We don't do 500 tires a week but I'd love to if I could.

 

Tires are a commodity and as much as anyone wants to feel special a monkey can do them. Sure there's care needed with tpms but its popping a rubber tire on a metal rim, no rocket science needed. We break a tpms sensor at the rate of 1:1500 and we rip a bead 1:10,000. I invested in good equipment and I maintain it. When I started out we struggled with 30 series tires, a machine with a helper arm makes it so simple.

 

Back to pricing, my suppliers web site allows for $ markup, % markup, and markup per brand. In 2 seconds I can quote installed price, so can anyone else at the counter. There's no mystery, no gray area, its the same for everyone. There's guys that try to take over making $5 a tire, they fuzz out quick.

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  • 2 weeks later...

Here in my area we have dozens of tire suppliers. They are all in fierce competition with one another, and sell wholesale even to the public.So that means very good prices for us smaller shops which allows us to pass on some of those savings to the customer. I really only sell and stock 3 different tires here.

 

Continental ProContact - a run flat all season grand tourer which is the OEM mounted tire on many European cars.

 

Continental ExtremeContact DW - a summer performance tire which is not a run flat and provides much better ride, and grip. I offer this to the customer who is looking to increase the performance of their vehicle, or who is looking for an improvement over stock in many cases.

 

General Altimax or G-Max - I offer this as a cheap alternative to the factory tires on most applications. Budget conscious consumers are sold this tire. I can get this tire as cheap as 75.00 for a 19 inch wheel. This tire is cheap, but it has great thread life, provides a smooth, quiet ride, and is a decent performer. The downside is, it is not offered in a run flat which can pose an issue with applications that do not stock a spare tire.

 

Typically what I do is if a customer is looking to replace one tire or two, I sell them either of those 3 at list price, or a mark up. If a customer is looking to replace all four, I may provide a slight discount on the price of the tire, especially if they wish to bundle services. Keep in mind that since I acquire the tires at a deep wholesale price to begin with. My "list" or mark up is still cheaper than the dealer, and on par with many tire specialty shops.

 

I road force balance all tires no exception. I even have signage that states this in plain customer view, and my SW always explains that we do, and the reasons behind it. I added an extra 8.00 to the mount and balance charge due to the RF balance. Let me tell you that promoting the RF balance has really worked for me. I have customers that come in to buy one tire, and then ask if I can RF balance the other tires on their vehicle. Which I say of course.

 

As far as warranty goes, unless the tire falls off the wheel, or there is vibration, then I offer none. I used to offer free tire patch services if a customer bought and mounted the tires with me, but I quickly ended that because I was getting slammed with customers and flats, and it was a huge waste of time.

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Have you ever considered where your customers are getting their tires patched if you aren't doing it? We pick up at least one customer a week who's regular mechanic was too busy to fix a flat tire. I agree there's no profit in patching tires unless you charge $50 for it, but I'll take a half hour to keep or gain a customer. Its cheaper than advertising.

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Have you ever considered where your customers are getting their tires patched if you aren't doing it? We pick up at least one customer a week who's regular mechanic was too busy to fix a flat tire. I agree there's no profit in patching tires unless you charge $50 for it, but I'll take a half hour to keep or gain a customer. Its cheaper than advertising.

I have Alfred, but I just can't meet the demand. I'm basically a one man show at the moment. I'm the only one who knows how to do any kind of work on vehicles. My associate sells work, and helps me with the office stuff in between. When I first opened up, I was trying to get business through the door. Once that happened, I was quickly overwhelmed, and taking time away from say a N54 water pump, to patch a tire (free) for a customer who bought 4 tires from me months ago was killing me. I did away with that, and now charge the typical fee which is $25.00 in my area. That is kind of what sucks about a small operation, it is very easy to find yourself too busy with work. I need to hire help. That has been an adventure on it's own.

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