The New Reality – Tires as Loss Leader?

All Tires $5.00 over cost!

Tire Loss Leader pricing is becoming a prevalent form of advertising for large and regional chains as they work to maintain market share against like competitors and surging New Card Dealers.

Independent Tire Dealers are watching tire margins shrink  (further) as they struggle to match large and Regional Tire Chain pricing.  Once a strategy regulated to the Car Dealers, advertising “dollars off store cost” is now being  adopted by an alarming number of large retailers.  

How can an Independent Tire Dealer Compete with this strategy?

While the thought of competing with Large Chains head to head may be daunting for some Independants, I believe that the Independent Tire Dealer can still compete and thrive against the Big Guys.

 

Here are a few strategies that Independents are using to  fend off the competition:

  1. Figure out what your competitive advantage is – and leverage it! Offer value added services such as a complementary car washes, one stop shop,  pick-up/drop off, mobile workspaces or loaner cars.
  2. Cross promote your business with local vertical businesses.
  3. Match Pricing or offer a 110% price match guarantee.
  4. Join a buying group, Co-op or Franchise as a way to improve buying power.  I recommend checking out  ITDG.

When in doubt .. sell a tire.  Sure I realize that your margins may be skinny, but why lose a customer?   Statistically, the average customer buys tires every 3-4 years.   Lose a customer over a tire deal, and you may lose the customer forever.  Especially if you are NOT a full service shop.

Finally – let me know if I can help.  You can contact me here.

Good Selling!

About Patrick Murphy

I have spent the past eighteen years producing, coaching and mentoring retail teams. The past six have been in support of Independents across Western US. Although, I have worked most of my career in automotive retail, It hasn’t and never will be about “cars and trucks.” What it has been about is the challenge and satisfaction of helping people with all types of backgrounds to realize their potential.
I am very proud that many of my former teammates have gone on to do some pretty terrific things with their life. Several are currently running their own groups and a few have even opened their own businesses.
My assignments with Bridgestone Firestone and TBC Corporation has offered me the opportunity to work in and become familiar with many markets across the country. From my hometown of Philadelphia, to Boston, Arizona, Dallas, New Mexico, Florida and Southern California. Each market has presented its own unique set of challenges, but at the end of the day, it always came down to three things: people, process and execution.