AKRON (Sept. 21, 2000) — It´s not exactly a conversation piece for the next family reunion, but for tire dealers the logistics of obtaining and unloading product translates either into dollars or empty pockets.
Business-to-business (B2B) Web sites have arrived upon the tire industry and have promised to help dealers with those logistics through the speed and global marketplace created by the Internet. Two sites that want to connect dealers to other dealers, wholesalers and manufacturers are TireDex.com and TrucktireXchange.com.
Both firms still are fairly new to the tire industry—TireDex launched a year ago, and TrucktireXchange debuted May 1 at the International Tire and Rubber Association´s World Expo. But both want to become the industry´s premier online exchanges.
"We really feel we can change people´s lives here, that we can improve the overall way these guys (dealers) operate," said Cort Jacoby, chief operating officer of TrucktireXchange.
In just four months, Chicago-based TrucktireXchange has signed almost 600 members and had $750,000 in online transactions to date, Mr. Jacoby said. A flat commission of 3 percent is collected on sales.
The company´s plan is to reach profitability within its first 16 months of operation, Mr. Jacoby said. Founded by Mark Imyak, principal of City Tire Inc. in Chicago, TrucktireXchange connects small- and medium-sized fleets to dealers across North America.
Fleets can search the Web site, find a deal on a set of truck tires or retreads and have those products shipped to them and installed by a local dealer. They also can search for products in the region a truck is traveling through, make the purchase online and direct the driver to that dealership, Mr. Jacoby explained.
He noted that among fleet operators, "technology has really been rocking their world" because more than 200 B2B Web sites that focus on transportation and logistics now exist.
On the tire industry´s retailing side, Newport Beach, Calif.-based TireDex has signed more than 2,200 members from 75 countries and has roughly 200-300 of those members posting inventory on a regular basis, said Steve Schultz, marketing communications director.
The site charges a commission ranging from 1.5 to 3 percent for tire sales and a 6-percent commission on wheel sales, Mr. Schultz said. He declined to disclose sales figures but admitted that TireDex isn´t turning a profit yet.
TireDex´s goal is to make online trading as comfortable as possible for dealers, Mr. Schultz said, by providing a forum for parties to negotiate directly or privately. One of TireDex´s services is to hold payments in escrow until the buyer receives a satisfactory shipment of the agreed upon product, he said.
The firm also is working to improve the exchange by developing what it calls MegaSites—a platform where dealers can log on, look up a tire manufacturer´s inventory and order tires. Mr. Schultz said TireDex currently is implementing a MegaSite with an undisclosed tire maker.
He emphasized that although tire dealers may be used to obtaining inventory directly from manufacturers and distributors, a B2B site opens up a worldwide inventory network.
"The whole idea of an independent B2B is that your Rolodex' just exploded, and all of a sudden you have contacts upon contacts you never knew you had," Mr. Schultz said.