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May 29, 1995 02:00 AM

WHOLESALER BUILDS BUSINESS BY AIDING SMALL DEALERSHIPS

Kathy McCarron
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    ST. LOUIS-Community Wholesale Tire Inc. says it doesn't buy the ``myth'' that the single-outlet dealership is a dying breed. Rather, the St. Louis wholesaler is working hard to be a valued partner to these businesses. Community Wholesale-a division of 60-year-old Com-munity Tire Co.-knows about small dealerships. A majority of its customers are single-outlet operations in Missouri, Illinois, Kansas and Iowa.

    In addition to selling a variety of tires, including one private brand and two associate brands, the wholesaler conducts a lot of business counseling for dealers who request it. These services include developing business plans to track operating costs, sales and profits on a daily and monthly basis; conducting market analyses to assess the competition and market potential; and creating effective advertising campaigns and budgets.

    The objective is to help a retail store increase profits to an optimum 10-percent net, according to the company. The rationale is simple: ``If they're not viable, we're not viable,'' said Community Wholesale President Phil Berra.

    Community Wholesale expects its wholesale revenues to top $25 million this year, up from $24 million last year.

    In March the wholesaler combined its annual brand-specific dealer meetings into one day-long sales and training meeting for all its St. Louis area customers. The meeting drew 325 people from 130 dealerships who listened to motivational speeches, learned about new products and met with supplier representatives and Community Wholesale personnel.

    The annual dealer meetings and the business counseling services are part of the firm's goal to be a full-service distributor and add value to the basic job of supplying tires to dealers. Otherwise, ``we'd be like everyone else,'' according to Mr. Berra. ``We want to be viewed as (the dealers') partner.''

    Also, ``it's our answer to some of the programs out there,'' Mr. Berra said, referring to such dealer marketing groups as American Car Care Centers. But the difference here is that there are no membership fees or common identification/signage requirements.

    Mr. Berra said Community Wholesale at one time had entertained the idea of joining such a distributor group, most of which offer marketing programs and custom brand tire lines. But ``we feel we can offer such services without having to be involved in an affiliated organization,'' Mr. Berra said. Plus, the wholesaler is well established in the three non-flag brands it carries: Hercules, Remington and Monarch. ``We're not looking for another brand.''

    However, the company is testing a new store format it may eventually market to its dealers. In March, Community Wholesale opened its third company-owned retail outlet, in Macomb, Ill., under the name ``Factory Tire Outlet,'' a tires-only concept that sells both new and used tires. Community Wholesale is developing a uniform color scheme and signs for the stores, which are designed to be two-person operations.

    The company chose the tires-only concept to avoid the high capital investment and ``headaches'' of automotive service, Mr. Berra said.

    From its warehouses in St. Louis and Kansas City, Mo., Community Wholesale distributes to 800 dealerships in both rural and metropolitan areas. However, location isn't the key to a dealership's profitability, according to Mr. Berra. It's how the dealer manages the business that counts most.

    As part of its business counseling, Community Wholesale provides dealers with a logbook to chart daily sales and expenses and the costs of doing business. ``It's surprising the number who need help in that,'' Mr. Berra said.

    Another service is helping dealers set up an effective marketing program, including developing an advertising budget and interpreting surveys and demographic data to determine market potential.

    To help them compete against mass merchandisers and warehouse clubs, Community Wholesale has organized a group of 37 St. Louis-area dealers who run joint ads in regional newspapers.

    The wholesaler has an in-house marketing department that designs tire ads and price sheets, in addition to point-of-sale materials and quarterly promotions.

    But Mr. Berra quickly acknowledges that the company also is looking for ways to improve upon its existing services.

    This year, during the dealer meeting, the firm persuaded about 15 of its customers to become new members of the National Tire Dealers & Retreaders Association by offering to fund 100 percent of their first-year dues from their co-op account with Community Wholesale.

    The company made the offer because it believes dealers benefit from the NTDRA's insurance and other membership programs, Mr. Berra said.

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