LYNDHURST, N.J.-While many dealers are grappling with ways to increase the service end of their business in search of higher profits, Englewood Tire Distributors Inc. is taking a different approach. The Lyndhurst-based dealership is attempting to boost sales of tires and tire-related service from 50 percent to as much as 70 percent of total retail sales.
It's all part of a new business philosophy for the company's retail outlets, according to Daniel Gillings, senior vice president of ETD's retail division.
``Independent tire dealers.*.*.have skewed toward the service side of the business,'' Mr. Gillings said. ``We are going to skew it back toward the tire and tire-related service side.''
All nine ETD retail outlets will have new signage, product mixes, ``aggressive'' pricing structures and dedicated ``fast lane'' tires-only service bays beginning July 1, he said.
The stores will be called ETD Discount Tire Centers and sport green, beige and red signage, in contrast with their former blue and yellow colors. ETD's wholesale distribution center in Lyndhurst and its Discount Tire Express division, which operates two satellite distribution centers, will be unaffected by the changes, Mr. Gillings said.
In an age of complicated, high-performance vehicles, consumers crave ``knowledgeable, experienced tire specialists'' who are able to provide them with correct information, he said.
That type of tire dealership-one similar to Goodyear's Just Tires outlets, Riviera Beach Fla.-based Tire Kingdom Inc. and Discount Tire Centers Inc. of Scottsdale, Ariz.-is absent from the New Jersey area, ETD contends.
ETD Discount Tire Centers will offer BF-Goodrich, Bridgestone, Firestone, Michelin and Yokohama brand passenger and light truck tires. But the company also has ``a distribution network in place that will enable customers to purchase any name brand product they are interested in,'' Mr. Gillings said.
Service bays called ``fast lanes'' will be dedicated to tire changes, alignments, balancing and other tire-related work. But the outlets will continue to offer radiator, air conditioning and scheduled maintenance service at other bays, Mr. Gillings said.
The task of implementing the changes have fallen on Mr. Gillings' shoulders. The 26-year tire industry veteran recently joined ETD's retail division after having served a two-year stint as president of Tire Service Co. Inc., which does business in Pennsylvania and New Jersey as Avellino's Tire and Service Centers.
Prior to joining Tire Service Co., he served as president, chairman and CEO of Somerset Tire Service Inc., a 51-outlet dealership based in Bound Brook, N.J.
``It's exciting to be in a situation to be able to fill a void that we feel exists and nobody is out there doing,'' Mr. Gillings said during a telephone interview held the day of ETD's new Lyndhurst store's grand opening. The Lyndhurst outlet is the first to sport the company's new retail look.
Conventional wisdom suggests healthy tire dealership profit margins come from an increased reliance on automotive service in the sales mix. But Mr. Gillings contends tire sales can be just as profitable-in volume.
``It's a function of the total number of units (sold),'' Mr. Gillings said, adding that the retail outlets will try to sell between 75 and 100 tires per day. ``If that's attainable, then it's substantially more profitable than (automotive) service.''
The company will offer a ``lowest price'' guarantee in its television, radio and newspaper advertising to help boost store traffic, he said.
``Low price is getting aggressive in the market place,'' he said. ``We will not be undersold-and that's not just lip service.''
The newly constructed Lyndhurst store sold 70-75 tires with total sales of $9,000 during its grand opening June 9, Mr. Gillings said.
All nine ETD Discount Tire Centers are in New Jersey. The company plans to open three additional retail outlets in central and northern New Jersey within a year, Mr. Gillings said.