Current Issue
Published on December 6, 1999

Time for tire dealers to go online

Do tire dealers need their own Web sites? A year ago, we would have answered no. But today going online is no longer a question. To compete in the coming century most tire dealers will need a presence on the Internet or risk the erosion of their market share.

Independent dealers have faced many challenges as the No. 1 sellers of tires.

From company-owned stores, to mass merchandisers, to warehouse clubs, dealers have beaten back the competition to retain control of more than 50 percent of the U.S. replacement tire market.

But as we enter the next century, dealers face a new kind of competitor—one far different from the brick-and-mortar businesses they've known.

Those selling tires and service over the Internet—known as e-commerce—will compete aggressively.

How these Web challengers will look and the impact e-commerce will have in the tire industry remain to be seen.

But judging from the recent startups of several such companies, it's clear they are serious about becoming important participants in the retail, wholesale, commercial tire and retreading markets.

These firms include: software developer ASA Tire Systems Group that has launched a Web site—eTirePlace.com—to link dealers with retail tire buyers; and Ocoee, Fla.-based Treadrubber Corp., which is using its site, treadrubber.com, to sell rubber to independent retreaders.

The latest startup is TireDex.com., a Web site that seeks to become the central market for tires and wheels, allowing wholesalers to peddle excess inventory and dealers the chance to buy at bargain prices.

Dealers should not dismiss Web retailers lightly. They have the potential to shift large numbers of buyers away from traditional distribution channels and to alter customers' purchasing habits.

If you don't think the Internet has such promise, consider that:

Internet users in the U.S. now exceed 100 million—or half the country's adult population. That number is expected to reach 170 million by 2003;

Business-to-business e-commerce will total $109 billion in 1999 and grow 99 percent annually to $1.3 trillion by 2003, according to one research firm; and

Online sales to consumers are expected to reach $330 billion by 2002.

These are big numbers offering huge sales potential. Dealers cannot afford to ignore these market changes.

No one knows how many customers will buy tires over the Internet. But it's clear that a growing percentage of the population is becoming comfortable purchasing online. What won't change is the fact that tires and wheels still must be installed on the vehicle.

Dealers must use the Internet to retain and draw customers to their dealerships. Then they can provide the type of service that has kept them the public's No. 1 choice for decades.

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