AKRON—Fifteen years ago, Ron Brutt decided he needed to do something different with his Goodyear dealership if he wanted to stay competitive in his market. He had established two tire and automotive service centers in Pittsburgh seven years earlier, but the city's economic climate didn't offer much potential for a small, independent retailer to grow.
But as some customers came into his stores looking for lawn mower tires, an idea dawned on him—why not carry specialty tires, which most people eventually need, but few tire dealers offer?
Mr. Brutt decided to gamble with the specialty tire niche, first carrying lawn and garden tires for a few customers, then gradually growing into a regional distributor of all types of specialty tires, including ATV (all-terrain vehicle), boat trailer, golf cart, industrial, farm, skid-steer and some construction equipment tires.
Today, Brutt Tire and Auto Centers Inc. stocks more than 2,000 SKUs in its warehouse and distributes specialty tires throughout western Pennsylvania, and adjacent sections of Ohio and West Virginia.
Mr. Brutt wouldn't disclose his company's sales, but acknowledged that 75 percent of total revenues come from specialty tires. He still sells passenger tires and offers auto service, but he's glad he chose to wholesale specialty tires instead of expanding his retail business.
``I think that my logic was pretty much on the money, because I don't see any new independent tire dealers coming into western Pennsylvania,'' he said. ``I see some price clubs and NTB (National Tire and Battery) and all these mass merchandisers coming. I don't think I was wrong.''
Brutt Tire distributes to golf courses, industrial equipment dealers, implement dealers and tire dealers, Mr. Brutt said. The firm doesn't wholesale any passenger or light truck tires.
Tire dealers make up the smallest part of his specialty business, because specialty tires are ``a very small piece of the pie'' in the overall tire industry, Mr. Brutt said. Not too many dealers want to deal with specialty tires, even though the profit margin can be as much as 30 percent higher than passenger tires, because they don't want to be experts on a product that usually takes months or even years to turn over, he said.
``You don't necessarily get the turns off of this business as you get off of passenger tires, and you don't necessarily get the large returns like you do off the auto service business,'' Mr. Brutt said.
``You have to look at it as a niche, and you get into it and provide excellent service, and you provide people with the information they need, and you have to be an expert at it. There's not that many people who are interested in knowing about farm tires or forklift tires. It's not an exciting business.''
Most of Brutt Tire's customers hear of its specialty tire business by word of mouth, from its Web site or by Mr. Brutt's presence at trade shows, such as boat shows, where he promotes boat trailer tires. However, Mr. Brutt said he is careful to refer consumers to his dealers rather than sell his tires directly.
``There isn't a tire dealer in western Pennsylvania that's not going to, sooner or later, cross my door, because we've done such a good job of being in the business,'' he said. ``And they appreciate that. We're their friend, because we're not their competition, and we have the tire they need to take care of their customer.''
Like Mr. Brutt, Carl Peevey, president of Green Oak Tire in Brighton, Mich., also decided to venture into the specialty tire business 15 years ago. Primarily an off-the-road tire dealer, Mr. Peevey knew he needed to offer other products because of the OTR market's competitiveness and cyclical nature, with seasonal slumps.
Some of his customers inquired whether he could replace a lawn mower tire or a flat tire on an ATV. Mr. Peevey slowly began to stock some specialty tires, particularly for lawn and garden applications. His investment paid off as construction of subdivisions proliferated in his area, creating demand for landscapers.
``If you've got the merchandise to serve (landscapers), they'll give you their business,'' Mr. Peevey said. ``And they're in such a hurry that they don't squabble over price.''
About 30 percent of Green Oak Tire's annual sales of $2.8 million now come from specialty tires.
Green Oak Tire offers industrial tires, skid-steers and farm tires, and sells a ``little bit to everybody,'' but its primary specialty tire customers are landscapers and residents who own a few acres of land and use riding mowers.
Green Oak Tire's specialty business is at its height during the warm-weather months, but, like any other business, "it's up and down,'' Mr. Peevey said.
Although he has no regrets about entering the specialty tire segment, Mr. Peevey admitted the business does require knowledge of the equipment the tires fit, which he and his employees had to learn on the job. He said customers often will call asking for a tire for a specific piece of equipment, but don't know the size they need.
Mr. Brutt agreed the specialty tire business is complex, even though someone has to offer those types of tires.
``It is not a business for everybody,'' he said.
``It's a business everybody can benefit from by using a specialty tire wholesaler and working hand-to-mouth. But for very many people to try to be in this business, they'd go belly-up quickly, because it's a very complex business.''