AKRON-Patrick Tire & Auto Service President Michael H. Patrick does more research than he ever expected when he opened his Goodyear franchise in 1977. Each work day he dredges through price lists, newspaper advertisements and quotes to find ``the best deal'' to buy his tires. Perhaps ironically, it's not always direct from his suppliers. Sometimes, the Amarillo, Texas, dealer uses independent wholesalers from the area.
``I spend a major part of my week trying to find a better deal,'' he lamented.
In the competitive retail tire industry, finding the best wholesale price can make a dramatic improvement to a bottom line.
Different dealers in different situations find their ``better deal'' in different places. Maybe that's why it's hard to get a consensus from retailers when you ask for their opinions of independent wholesalers and their future.
For instance, dealers in concentrated population areas contacted by TIRE BUSINESS generally said they believe independent wholesalers will have to become larger and offer more value-added benefits to their retail customers in order to survive.
Some of the larger wholesalers along the East Coast have been doing just that by offering daily delivery programs, co-op advertising and additional product lines, including tire equipment, wheels and undercar parts.
``With the (wholesalers) I deal with right now I'm getting the lowest price and getting good service,'' emphasized Albert Harmon, president of Harmon Tire in Ellsworth, Maine.
However, he was quick to point out that even he might be looking at entering a buying group in the future to cut his wholesale costs.
Regardless of whether dealers decided to get their tires from a wholesaler, a manufacturer's distribution program or a buying group or cooperative, he said, ``in the future, it will have to be a win-win situation for both (the wholesaler and dealer).''
In Independence, Mo., John Sidney Jr., co-owner of American Quality Tire Co. Inc., said he joined the American Car Care Center group three years ago, in part, to help cut costs.
But Memphis, Tenn.-based ACCC also offers a host of value-added benefits established by the marketer's 18 wholesale distributor members. Services such as the company's road hazard warranty have helped him boost his margins, he said.
Buying groups definitely have taken business away from some independent wholesalers, said Mike Smith of Monteith Tire of Elkhart Inc. in Elkhart, Ind.
Mr. Smith's single-location, 10-bay dealership recorded about $1.3 million in sales last year. He credits his success over the past eight and a half years to the Zurcher Tire Group.
``They're basically why we're here,'' he said. ``Basically, (the buying group) is our lifeblood.''
In contrast, Lila Simas, owner of Riverside Tire Inc., runs her two retail outlets in Medford, Ore.-located about four hours south of Portland, Ore., and four hours north of Sacramento, Calif.
The relatively isolated area of southwestern Oregon makes it impractical for her to rely on direct shipments from tire manufacturers. Instead, she's turned to a few wholesalers.
Her reliance on wholesalers to stock her outlets has made her keenly aware of some of the changes they have gone through in recent years.
``They've had to adapt like everybody else; they are getting leaner,'' she said. Gone are the incentive trips and many of the co-op advertising programs.
But Ms. Simas is quick to point out she understands the predicament wholesalers are in.
She's in the same boat.
``It used to be a little more `You take care of me; I'll take care of you'-a little more personal,'' she said.
Ironically, part of what has made competition so intense at the retail level has been the ease with which service and gas stations can purchase tires from independent wholesalers, dealers said.
Ms. Simas said she has found wholesalers are offering multiple brands to multiple dealers in an area. Years ago, there was more exclusivity, she said.
In Macon, Ga., Bill Raffield of Raffield Tire Master said he's seen too many retail tire dealers struggle because companies whose main emphasis lies in other products or services can easily obtain and sell a tire.
``I personally am not in favor of every corner (gas) station selling tires,'' Mr. Raffield said.
``I like a lot of folks in the tire business, and I go head to head with them, but it ain't my desire for them to go out of business,'' he said, explaining he believes the market can be adequately serviced by ``tire dealers'' alone.