With costs associated with traditional tire retailing spiraling up-ward, where will your profits come from in the future?
Independent tire dealers seeking new profit avenues shouldn't overlook the possibility of adding a complementary franchise or an-other type of non-traditional profit center to their operations.
Just because something doesn't fit the normal ``tire dealer'' service and product offerings doesn't mean it can't be a successful addition to a dealership.
A number of dealers, for example, have found great success selling bolt-on accessories for truck and sport-utility vehicles, providing rental moving trucks and adding oil and lube franchises to their basic tire and service offerings.
Not all such profit centers are equally lucrative, nor do they require the same investment, but they do offer the potential to help the long-term viability of a tire dealer's business.
Several dealers interviewed for the non-tire franchise special section in this issue even went so far as to say the extra revenue generated by these added profit centers will become necessary for dealers to succeed in the future. As one dealer put it: ``One of the secrets for people surviving in the tire business is getting extra profits per (sales) ticket,'' because trying to take away business from the competition is so difficult.
But like any new venture, ad-ding a non-tire franchise, product line or service carries some risk and dealers should carefully weigh the pros and cons of each before entering one of these ventures.
Here are some thoughts gleaned from our special section.
In selling vehicle accessories, dealerships need someone on staff who's not only dedicated to selling those products, but also is enthusiastic about that business-because it won't sell itself.
When eyeing a franchise, consider those that have a well-known, well-accepted trademark. Also, do business with a franchiser that is more interested in selling its products and services rather than the franchise itself.
And before taking that franchising plunge, keep in mind the old dictum caveat emptor-let the buyer beware.
While owning a franchise can attract new customers and sales, it also can hamper a business if you don't do your homework about the company, fail to read the fine print and don't understand the various points outlined in the franchise contract.
Another consideration is the extra time an add-on business might require. Dealers offering moving-truck rentals, for in-stance, must stay open seven days a week to accommodate weekend customers and have enough space to park the vehicles.
On the positive side, the investment is minimal and dealers can earn a commission averaging 20 percent on each transaction.
Complementary, non-tire franchises are making money for many dealers. Don't dismiss them too quickly.