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April 26, 1999 02:00 AM

'NET PROFIT: TIRENETS TO ACT AS ONLINE BROKER FOR INDEPENDENTS

Vera Fedchenko
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    MORGAN HILL, Calif.—In early 1998, Richard Howard, a tire dealer in the San Francisco Bay area, sat down at a kitchen table with his aunt and uncle, Jane and Al Howard, former dealers, and casually discussed recent events in the tire business. Somehow the conversation shifted to the Internet and e-commerce, which sparked an idea among the three: Since people already are peddling products online, why not use the Internet to sell tires through a dealer network?

    The idea gave rise to a new venture, TireNets.com Inc., a Morgan Hill-based firm that sells tires to consumers online, with the tires being supplied and installed by local dealers.

    ``The Net is the thing of the future for purchasing,'' said Richard Howard, president of Bruce's Tire Inc. in San Jose, Calif., and a Tire Factory Groupe member. ``E-commerce is something we all need to look at.''

    The concept is simple—users looking for a new tire log on to www.tirenets.com, enter the size of their current tires and the make of their cars then browse through the features of different product offerings, said Jane Howard, TireNets CEO.

    The site also directs the user to the nearest participating tire dealership, providing an address and street map, she said. Once a customer enters an order, it is sent to the referred dealership, which is linked electronically to TireNets. The dealership, in turn, contacts the customer via e-mail or phone to schedule an appointment to pick up the tire and have it installed.

    ``We think that possibly tire dealers who are online will have a better advantage over dealers that are not and get another consumer that maybe they were missing completely,'' Mrs. Howard said.

    ``People just say, `I'm not going to shop for tires like we used to, going from store to store or making the phone calls. I'm just going to go online and get it done.''

    She acknowledged the concept for TireNets is similar to Tire Rack, the nation's leading mail-order tire outlet, but the plan for TireNets is to direct online consumers to take delivery of tires from local dealerships instead of shipping products directly to customers.

    ``We're trying to support the independent tire dealership and give them business,'' she said. ``It's kind of our philosophy.''

    Mrs. Howard and her husband were independent dealers for 33 years before selling their Howard Tire stores in 1995—one to their nephew; the remainder to Wheel Works.

    TireNets acts as a broker for participating dealers, Mrs. Howard explained. TireNets retains a portion of each tire sale as a commission and remits the balance to the dealer who supplies the tires.

    Dealers also are reimbursed for the installation service, but Mrs. Howard said those details still are being discussed.

    TireNets began when Mrs. Howard brought the idea from the kitchen conversation to her friend, Dr. Peter Gregor, a cardiologist who owns a Web-based business called Internets Inc.

    Dr. Gregor then assigned his computer technicians to develop the Web site for TireNets and the purchasing software, Mrs. Howard said.

    Her nephew rounded up two other Tire Factory Groupe members—McLea's Tire & Automotive Service in Santa Rosa, and Ramona Tire Inc. in Hemet, Calif.—to participate with his stores in a testing phase, which is now in its final stages, she said. The Web site is expected to be completed in the next few weeks.

    TireNets began as a division of Internets, a research-oriented collection of search engines, said Dr. Gregor, who also serves as chairman of TireNets, but the operation was incorporated as a stand-alone business in February.

    The company is starting out in California with a few stores, then plans to offer its services to other Tire Factory Groupe members as an added bonus for membership, Mrs. Howard said. Tire Factory Groupe also is part of the Tire Alliance Groupe.

    Eventually, Mrs. Howard wants TireNets to grow beyond California and become a nationwide operation.

    ``It's going to take a lot of work in terms of servicing the dealers and making sure the quality of the dealers and the product is maintained,'' she said.

    ``But just as Amazon.com started real small, we see that this could be quite the offering. It just makes purchasing tires a lot easier.''

    Amazon.com claims to be the nation's largest online bookseller.

    TireNets one day may also include wheels and some automotive service as part of its product offering, but will stick with tires for now, said Richard Howard.

    Mrs. Howard said once all quirks with the Web site are worked out, TireNets will begin advertising to consumers and dealers through the Internet, newspaper and magazine ads. She said she wishes the firm already had completed its launch, but is glad it's almost done.

    ``We're very excited about it. You kind of hold your breath and say, `OK, I hope this works; we think there's a need to fill.' It is close to launching and it is a little scary.''

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