As if the tire business wasn't complicated already, dealers now have to learn to compete using the Internet. Electronic commerce, where consumers buy online, is still in its infancy, but it is expected to grow exponentially over the next few years.
From no sales five years ago, e-commerce in 1998 rang up $8 billion in sales. Some believe that will explode to $330 billion by 2002.
Tire dealers should not ignore the opportunities and/or potential impact the Internet could have on their businesses.
Already, mail-order giant The Tire Rack posts big sales over the Internet. Its site at www.tire-rack.com features tire and wheel product information, an interactive, visual wheel fitment guide and the ability to order online.
Consumer Reports magazine regularly encourages its readers to use mail-order houses to buy tires. The Internet makes that easy.
Nobody really knows how big or important sales over the Internet will become, but the potential is enormous.
From the customer's point of view, Internet commerce provides 24-hour access to a company's offerings and easy ability to compare products and prices, all in a non-pressure environment such as one's own home.
Consumers can make appointments and order products with a lot less hassle using the Internet rather than calling or visiting stores to shop for goods and services.
What all this means to tire dealers also is unknown, but one company in California offers some insight into what might be in store.
Former tire dealers Jane and Al Howard and their nephew, Richard, are building a Web site that sells tires online to consumers in the San Francisco Bay area.
The site, www.tirenets.com, encourages consumers to enter the size of their current tires and make of cars. It gives them a menu of available tires and prices and allows them to make a transaction online before taking delivery at a nearby dealership.
TireNets.com Inc. keeps a portion of the transaction as a commission.
The Howards are recruiting dealers to join the program and hope to take it national.
Wayne Croswell, president of software company ASA Tire Systems, said in a recent speech that dealers who don't embrace emerging technologies will find themselves playing catch-up.
Dealers, he said, must plan to get their share of electronic spending and look for ways technology can give them a business advantage.
Today consumers trade stocks, buy cars and make appointments using the Internet. As public acceptance of e-commerce grows, it will become increasingly more important for independent tire dealers to do business in this fashion.
Dealers should keep a close watch on e-commerce and look for ways they can capture their share of online business.