In an effort to help dealers control the costs of doing business and build sales, American Tire Distributors (ATD) Inc. has upgraded its dealer support program to include new contracts with non-tire vendors and allowances for certain brand purchases.
The Charlotte-based wholesaler added vendors Staples Office Supplies, G&K Uniforms and www.companyclothes.com to the ranks of companies with which dealers can do business through ATD's HeafNet online ordering system.
``We spent a lot of time with our dealers asking them what kind of support they need from us,'' Phil Marrett, ATD's senior vice president of sales and marketing, said in a prepared statement. ``With that feedback, we built our new programs around offering flexible benefits, individualized marketing support and assisting dealers in controlling their costs on the items they need to run a tire dealership.''
ATD already had offered dealers purchasing discounts from Valvoline, Interstate Batteries, TeleCheck and ADP, a provider of payroll services and employee benefits solutions. The company recruited more vendors to help dealers not worry about shopping for uniforms or how to save on office supplies and batteries while larger competitors take advantage of economies of scale, according to Jason Shannon, ATD director of marketing.
``It's all a move to provide more convenience, to help the dealers save time and ultimately to help them save money...,'' he said.
The program applies to all ATD dealers, including its 340 AutoEdge dealers, Mr. Shannon said. AutoEdge is a format ATD launched a few years ago that involves special services for dealers who commit to purchasing 51 percent of their total passenger and light truck products from the distributor.
Besides contracting with three more non-tire suppliers, the wholesaler also has created a program for its private brands-Regul and Winston-and for Bridgestone/Firestone's associate brand, Gillette. Since April, dealers who buy at least 75 units of one of these brands per month receive a ``development allowance'' from ATD that can be used toward advertising and equipment costs, the purchase of wheels or any investment that dealers ``deem appropriate toward helping grow that brand,'' Mr. Shannon explained. Dealers may buy different quantities of units, but they all receive the same flat percentage rebate, he added.
Mr. Shannon said ATD decided to offer the allowance after dealers told the company they needed more flexibility with ATD's requirements for using marketing funds.
``We have put together programs for all three of those brands simply to drive the dealer's investment equity in that brand...the possibilities are really limited only by his imagination,'' Mr. Shannon said, noting that a development allowance is specific to a particular brand.
So far, he said dealers seem to be embracing the ``improved efficiency and convenience,'' and ATD expects a positive impact on sales as a result.
Jeff Willingham, owner of Greenville, Texas-based Willingham & Willingham Inc., which does business as Discount Wheel and Tire, said the availability of non-tire vendors on HeafNet frees up his time and gives him a single source that helps him achieve the same discounts as if he were shopping vendor by vendor. He said he's pleased that he can be online ordering supplies for his two stores for only three to five minutes instead of spending half an hour on the phone with a vendor.
``Time is a commodity that's difficult to replace,'' he said.
Mr. Willingham said he uses HeafNet daily and sometimes hourly for his business needs. He would like to see ATD add even more choices of companies with which dealers can do business directly via the ordering system.
``It has added to my efficiency and my productivity, and more importantly, to my profitability,'' he told Tire Business.
As a member of ATD's Regul buying program, Mr. Willingham said he purchases about 1,500 units per month, receives a 2-percent rebate on every tire and appreciates the flexibility in how he can use those co-op dollars. So far, he has used those dollars from Regul to pay for a ``large portion'' of his radio, TV and print ads.
Wayne Tew, owner of Tire Barn of Lake Wales in Lake Wales, Fla., said he's been using his 2-percent rebate on Regul toward his bottom line to offset lower margins resulting from entry-level priced tires.
``I'm like everybody else,'' he said. ``With the downturn in the economy the last few years, we're seeing a lot more economy tires go out than premium tires.''