Skip to main content
EVENT TRACKER
Keep track of rescheduled, canceled industry events with our COVID-affected event tracker - Powered by Snap Finance
Close
Sister Publication Links
  • Rubber & Plastics News
  • European Rubber Journal
tb-logo
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • OPINION
    • CORONAVIRUS
    • AUTO INDUSTRY
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • FACTORY FIXES
    • GOVERNMENT & LAW
    • INTERNATIONAL
    • MOTOR SPORTS
    • NEW PRODUCTS
    • RETAIL TIRES
    • SERVICE ZONE
    • SEMA/AAPEX
    • SMALL BUSINESS
    • TIRE MAKERS
    • SPONSORED CONTENT
    • New round of Paycheck Protection Program funding opens
      Vaccine may usher sense of normalcy
      Cover-up: More retailers requiring face masks to curb COVID
      USW alleges COVID-19 violations at Kumho plant
    • GM banking on 'BrightDrop' EV to build commercial van business
      Stengel promoted to president of NAPA parent Genuine Parts Co.
      Former auto exec Tyrone Jordan joins Cooper board of directors
      Bridgestone crafts virtual city to showcase sustainable-mobility initiatives
    • New round of Paycheck Protection Program funding opens
      H&H broadens precure OTR business with Continuum mold acquisition
      Apollo to raise prices of Vredestein brand, effective March 1
      Taiwan tire makers propose settlement of import duties case
    • Conti adding light-duty products to General Tire OTR tire lineup
      GM banking on 'BrightDrop' EV to build commercial van business
      Gary Price to head Love's Truck Care operations
      TA opens 6th Oregon location, bringing 50 jobs to area
    • New round of Paycheck Protection Program funding opens
      Taiwan tire makers propose settlement of import duties case
      Wireless auto data debate continues
      World rubber demand in 2021 to recover to 2019 levels — IRSG
    • Hankook gains OE fitments on Audi RS Q8
      General Tire Canada renews sponsorship deal with Raceline Network
      GRI expanding ag tire capacity at 3-year-old Sri Lanka plant
      Point S Canada adds 61 stores to network in 2020
    • Goodyear Racing staying on track
      General Tire Canada renews sponsorship deal with Raceline Network
      Indy Autonomous Challenge: High-speed, head-to-head, no drivers
      TGI secures Cosmo-brand naming rights at Fla. race track
    • Conti adding light-duty products to General Tire OTR tire lineup
      Goodyear-brand belts back on the market under licensing arangement
      Kumho launches commercial LT, performance tire lines
      The new One: Nokian unveils all-season passenger tire
    • Goodyear-brand belts back on the market under licensing arangement
      WTC hosting webinar Jan. 20 on load-capacity standards
      Bauer Built completes expansion at Neb. facility
      Point S Canada adds 61 stores to network in 2020
    • Shocks/struts maker KYB unveils video training series
      Bauer Built completes expansion at Neb. facility
      Marinucci: Basic steps to email efficiency
      Point S Canada adds 61 stores to network in 2020
    • WTC hosting webinar Jan. 20 on load-capacity standards
      Denver's Brian Sump named AAPEX Shop Owner of the Year
      DUB, TIS Wheels founder Myles Kovacs is SEMA Person of the Year
      AAPEX: Using social media to promote your business
    • Vaccine may usher sense of normalcy
      2020 Review: PPP loans give boost to small businesses
      Latest COVID relief bill includes $325B in small-business support
      AAPEX: Do more cars in the shop mean more profit?
    • Hankook gains OE fitments on Audi RS Q8
      Goodyear Racing staying on track
      General Tire Canada renews sponsorship deal with Raceline Network
      Apollo to raise prices of Vredestein brand, effective March 1
    • Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
      Sponsored By Yokohama Tire Company
      Stocking Tires for Crossover SUVs
  • SHOP FLOOR
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Video: Balancing Tire
      Safety tips for wheel balancing
      An introduction to wheel balancing
      Wheel weights: Balancing form with function
    • Video: Demounting
      Tire changer types, tips and trends
      How to clear rim rust and corrosion
      An introduction to demounting, mounting and inflation
    • Video: Safety
      Customers
      Considerations for shop safety policies
      Introduction: Creating a culture of safety
    • Video: Tire Repair
      Essential tools, materials and equipment for tire repair
      An introduction to tire repair
      How to properly patch a puncture
    • Video: TMPS Service
      The life-saving work of TPMS
      An introduction to TPMS service
      The importance of proper relearn procedures
    • Video: Training
      Internship ideas to attract tech talent
      Choosing the right auto service tech school
      Intro: Finding and training technicians
    • Video:Vehicle Lifting
      The gravity of proper lift points
      Safety essentials when using jack stands
      An introduction to lifts and lift safety
    • Video: Wheel Torque
      The importance of torque specifications
      Introduction to proper wheel installation
      Torque check and recheck recommendations
  • Multimedia
    • VIDEOS
    • PHOTOS
    • PODCASTS
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Data
    • DATA STORE
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
  • ADVERTISE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
June 10, 1996 02:00 AM

CASH - NOT CREDITFOR NATIONAL AC COUNT BIZ?: DON'T COUNT ON IT, GOODYEAR EXEC TELLS COMMERCIAL DEALERS

  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    AKRON-Will tire manufacturers ever break with tradition and pay commercial tire dealers in cash rather than credits for their national accounts business? Never say never, but don't hold your breath. The chance of that happening is probably remote, despite the decades-long practice that some dealers claim is cash-strapping their companies and could threaten their very existence.

    Robert O'Donnell has been Goodyear's manager of national accounts for four years and an almost 24-year tire industry veteran. Providing dealers with credits toward more product purchases instead of cash has been around as long as he can remember.

    And it's that way because that's how national account customers want it, he explained during a recent interview in conjunction with TIRE BUSINESS' special report on commercial dealerships, published in the May 27 issue.

    Customer criteria

    Mr. O'Donnell's working definition of a national account is: a customer looking to leverage purchases for volume sake, while also in need of a consistent or everyday pricing program for new or retreaded tires, tire maintenance or automotive service throughout North America on a daily basis.

    That customer seeks centralized billing, though not necessarily centralized purchasing, he noted.

    Goodyear actually has a dual approach to national accounts which, despite the ``national'' designation, can also refer to large regional carriers.

    The tire maker offers programs to commercial accounts-for-hire carriers, private fleets, utility companies and truck-leasing fleets, for instance-and to what it calls ``consumer'' accounts-such as car leasing and car rental firms.

    Besides the logical requirement that a company be credit worthy, both types must fulfill certain volume criteria set by Goodyear: for consumer accounts, the potential for $100,000 in purchases of manufactured products; for commercial, a minimum of $250,000 in potential annual purchases.

    However, there is and must be flexibility built into each contract, Mr. O'Donnell pointed out.

    A trucking fleet on a national account may make daily purchases from independent tire dealers and be a ``great customer,'' but doesn't necessarily purchase a lot directly from Goodyear.

    ``So I would not hold their feet to the fire,'' he said, because ``the bottom line is they're buying Goodyear product-that's the important thing.''

    Pricing

    The tire maker provides a national account price list covering products and services, and Mr. O'Donnell said dealers participating in the program contractually agree to support it as well as honor the set prices. They do have the option of negotiating prices down-not up. And he insisted that in some markets dealers actually have asked for lower prices in order to better compete.

    ``National account pricing is the bible,'' he said. ``That's what customers are expecting to pay. However, it's very competitive with the same pricing that dealers advertise on their walls.''

    Cashless transactions

    It is because of centralized billing for national account customers that commercial dealers receive credit from tire makers toward more product purchases.

    ``From the national account's standpoint, it's really their request, more times than not,'' rather than tire industry policy, said Mr. O'Donnell. ``They want one invoice or statement per month.''

    A car leasing company, for example, has ``hundreds or thousands of vehicles purchasing something every day,'' he continued. ``The simplicity of a national account program for each vendor is to have centralized billing, with the rationale being one statement (paid with) one check.

    ``It's always been that way.''

    Mr. O'Donnell believes cashless transactions will always be the norm, though he does envision the advent of a type of ``vehicle management card'' for national accounts. It would be similar to fuel credit cards issued by the oil industry and used by trucking fleets throughout the country.

    ``But it still gets back to centralized billing. Only, instead of, say, Goodyear's billing procedure, it will be a bank doing the billing.''

    As long as national account customers want data and want specific vehicle information that they can feed back to their customers, ``I don't know that it will ever change,'' he added.

    `Consumer' accounts

    Car rental firms or companies that lease a fleet of cars, perhaps for their sales or marketing staffs, fall under the umbrella of Goodyear's so-called ``consumer'' national account program. Like the commercial variety, supply points are also Goodyear's dealer network.

    ``And a lot of our dealers love them,'' Mr. O'Donnell said. ``It allows them to do a lot of mechanical service, and helps their customer base.'' Typically, those national account customers also have personal vehicles, and dealers often land that service business as well, he said.

    He estimated that while these consumer accounts might represent between 10 and 20 percent of an independent retail tire dealer's business, some commercial dealers may have up to 50 percent or more in commercial national accounts.

    Changing landscape

    The commercial aspect of the business has ``changed dramatically over the last five years,'' according to Mr. O'Donnell. ``I feel for the independent dealers out there, because it has totally changed their business.''

    Small regional or local trucking fleets are being swallowed up by national truck leasing companies and fleet operators. ``That's the dilemma,'' he said.

    An organization called the ``Truck Rental and Leasing Association'' currently represents more than 40 percent of all Class 3 through Class 8 vehicle operators, he said. A lot of small companies-and many public and state agencies-have also turned their fleets over to leasing programs.

    ``Our objective is to serve customers the best we can,'' he stated. ``We're aware of all these issues, and are working on them. But it's an evolutionary, not revolutionary, thing.''

    Typical complaints

    While the credit-instead-of-cash situation is a common complaint among dealers of both consumer and commercial national accounts, Mr. O'Donnell said another issue is delivery commissions for manufactured products-that is, the amount a dealer is issued in credit for handling a transaction with a national account.

    ``Dealers say the commissions are pretty low. But.*.*.*we also get calls (from dealers) asking us to be a little more competitive to meet a competitive situation. Regardless of what the commission is, many dealers feel it's not enough.''

    Negotiated pricing, chiefly for automotive repairs, is another issue. ``And we hear more complaints about service pricing for emergency road service,'' he said.

    Goodyear evaluates each of its national accounts annually, Mr. O'Donnell explained, with pricing based, in part, on a company's history and potential purchases.

    ``The only change I see happening is what's already happening today in the industry,'' Mr. O'Donnell said. That is:

    Large carriers are going to get larger; leasing will continue to grow; and private fleets will evolve toward leasing.

    In order for tire makers to better serve their national accounts, he sees the development of closer strategic relationships with those customers, especially in regard to tire technology and development.

    Often times, he said, rather than wait for a complaint, ``we typically tell them our tires aren't working'' in a certain application, then work to develop solutions.

    ``Our engineers and technical people are tracking all our tires with fleets. If a tire is not fitting the bill, we're up front with them, and work to change that-whether that means providing a new tire, or a better one.''

    With all this sharing of information between manufacturers and customers, ``there are no secrets,'' Mr. O'Donnell noted. ``They know what our tire is doing just as much as we do.''

    ``And I tip my hat to our field service organization-the independent dealers and our company-owned truck tire centers-for the service they provide our national account customers,'' he added.

    ``They're very dedicated, and do a super job for us.''

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    tb-logo
    Reader Services
    • Contact Us
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber & Plastics News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • List Rental
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • CORONAVIRUS
      • AUTO INDUSTRY
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • FACTORY FIXES
      • GOVERNMENT & LAW
      • INTERNATIONAL
      • MOTOR SPORTS
      • NEW PRODUCTS
      • RETAIL TIRES
      • SERVICE ZONE
      • SEMA/AAPEX
      • SMALL BUSINESS
      • TIRE MAKERS
      • SPONSORED CONTENT
    • SHOP FLOOR
      • BALANCING
      • DEMOUNTING
      • SAFETY
      • TIRE REPAIR
      • TPMS
      • TRAINING
      • VEHICLE LIFTING
      • WHEEL TORQUE
    • Multimedia
      • VIDEOS
      • PHOTOS
      • PODCASTS
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Data
      • DATA STORE
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
    • ADVERTISE
    • DIGITAL EDITION