AKRON-Unable to efficiently and cost-effectively distribute their tires to retail dealers at every point of sale in the country, tire makers must rely on independent wholesalers. It's essential, therefore, for them to keep on top of the trends and conditions in the wholesaling market.
Manufacturers who elected to respond to TIRE BUSINESS' inquiry about the independent wholesale market agreed: Regional wholesalers are a viable force in today's industry.
That's not to say wholesalers aren't facing change.
For one thing, it seems sure wholesalers are entering a period of consolidation-``a shakeout,'' as Don Salyers, Kelly-Springfield Tire Co. vice president of sales and marketing, puts it.
``In certain markets where they are saturated (with wholesalers) there will be a shakeout,'' he explained. ``But just about any market in the U.S. needs a good wholesaler.''
Just being big doesn't make a wholesaler ``good,'' manufacturers agreed. In order to survive, today's distributors must add additional services.
``Historically, the manufacturers have provided the training, but they are training less, so retailers are looking to the wholesalers to fill that void,'' Mr. Salyers said.
Michelin North America, which responded to TIRE BUSINESS' inquiries in a prepared statement, even predicted the demise of those wholesalers unable or unwilling to add value to their services.
``Traditional wholesalers who rely upon economies of scale through buyer and warehouse logistics have lost touch with the needs of the independent tire dealer,'' Michelin said. ``On the other hand, wholesalers who have evolved through servicing strategy, multi-location warehouses, daily deliveries, training and co-op programs, merchandising support and utilize a comprehensive marketing plan with their authorized associate dealers have gained an edge in the marketplace.
``The servicing distributor will continue to grow at the expense of the traditional wholesaler,'' the firm continued.
Service-minded wholesalers who support the independent dealer will always be in demand from manufacturers, according to Edward Gallagher, Goodyear Vice President of replacement sales for North America.
``The question is who can more efficiently get a tire to the independent,'' he said. ``If it's the wholesaler that can get it there best, that's good for both he and for us.''