LAKE ORION, Mich.—After 28 years of going it alone against larger competitors in this rural Michigan community an hour's drive from downtown Detroit, Dan Clark decided last year it was time to find strength in numbers. "I read sometime last year that (Tire Alliance Groupe) was opening up membership to dealer groups capable of buying 50,000 tires a year," Mr. Clark said.
"After I spoke to (TAG President) Dan Beach and some of the Conti-General guys to see if they were really serious about the 50,000 minimum," he said, "I started talking with other small dealers in central Michigan, and by February I had enough interest to set up a meeting with TAG."
That meeting weeded out the merely curious, Mr. Clark said, and resulted in a group of eight serious, committed dealers with a total of 14 stores, including Mr. Clark's single-outlet Tire Warehouse Inc. in Lake Orion.
These eight dealers joined forces to form Great Lakes Tire Group L.L.C., which was accepted as TAG's 16th and newest member shortly thereafter.
"The impact has been immediate," Mr. Clark said. "My profit margins on tires have nearly doubled, and this has allowed me to start looking at various bonus and incentive programs for my employees."
Besides better margins on tires, Mr. Clark cited TAG's programs for roadside assistance, credit cards, training, medical insurance, 401(k) retirement plan, and other marketing initiatives as immediate benefits he and other Great Lakes Tire Group members are enjoying.
While the new group still is relatively small, Mr. Clark sees the potential to add dealers from all over lower Michigan. "We all are facing heavy competition from Belle Tire and Discount Tire, not to mention the Wal-Marts and other big chains," he said.
In addition, by choosing the name Great Lakes Tire Group, Mr. Clark and associates leave open the door for expansion into neighboring states. The group also fills a gap in TAG's nationwide distribution network.
Joe Myers, owner of Myers for Tires Inc. in Gladwin, Mich., concurs with Mr. Clark on the benefits of better buying prices, but said it's still too early in the program to comment on other aspects of the TAG product range. Mr. Myers, a third-generation tire dealer, was one of the first dealers Mr. Clark contacted about forming a buying group.
Myers for Tires is a Bridgestone/Firestone affiliated dealer, but Mr. Myers said he feels the need for two strong suppliers, considering the fill rate problems of the past year. Continental General Tire's strike-related supply problems have been a problem thus far, he said.
Separately, Mr. Clark is planning a 15,000-sq.-ft. store in Lake Orion to replace the existing 5,600-sq.-ft. location, and plans to open a second store next year in a nearby community. The new facility is being built at a cost of about $2 million, Mr. Clark said, while plans for the second store still depend on local zoning commission approval.
Great Lakes Tire Group is one of two buying group members to join TAG in the past year. The other is Tri-State Delta Tire Co. Inc., based in Statesville, N.C., with 130 dealer outlets in North and South Carolina and Virginia.
Tri-State Delta is a dealer-owned buying cooperative that started life in 1984 as a Delta tire distributor throughout the three-state marketing area, said President Earl Baynard Jr. The group still carries the Delta brand and remains affiliated with Del-Nat Tire Corp., as well as being a new TAG member.
Tri-State Delta has 53 stockholders, primarily consisting of one- and two-store dealerships, but also including Colony Tire Corp. (27 stores) and Frasier Tire Co. (14 stores). The outfit started with 17 members in 1984.
The Tri-State Delta members are excited about TAG's recent distribution deal with Yokohama Tire Corp. and the upcoming Prodigy private brand program, both of which will fill voids in most members' portfolios, Mr. Baynard said.
The group's members also are benefitting from TAG membership by being able to share information with and learn from other dealers, and take advantage of TAG's credit card and equipment purchasing programs.
Tri-State Delta operates its own mixing warehouse in Statesville, where it packages members' orders for shipment once or twice a week, Mr. Baynard said. The company handles brands such as Double Coin, YKS and Ceat directly, he said. Business this year is up by about a third over 1998, he added.
Besides serving as president of Tri-State Delta, Mr. Baynard is co-owner of Lebe's Tire Service in Statesville.