Bigger is better in the agriculture industry.
As farmers purchase larger tractors and combines for higher and faster yields, tire dealers who service them are forced to buy larger service equipment.
``It's a domino effect,'' noted Sam Nash, general manager for Piedmont Service Trucks. Manufacturers are building bigger, more sophisticated farm equipment. Farmers buy them to stay competitive, he said, and tire dealers have to upgrade to service them.
Representatives from three major tire service truck manufacturers-Piedmont Service Trucks, Iowa Mold Tooling (IMT) and Stellar Industries Inc.-agreed there is continuing development of larger and larger farm equipment, and tire dealers have to upgrade their equipment simply to stay competitive.
The trend is ``get big and get efficient or get out,'' observed Ron Upmeyer, IMT regional manager. ``Tire dealerships are getting bigger, equipment is getting bigger, and they are driving farther distances.''
Larger trucks, articulating cranes and high-output compressors are becoming essential equipment upgrades.
``Most any dealer in the farm tire market needs to upgrade,'' said Tom Formanek, manager of tire service products for Stellar Industries. In the past, a crane was a secondary item, he said. ``Now it's a primary requirement for good farm tire service.''
However, an upgrade can be expensive. Cranes with remote controls and other equipment upgrades can cost up to $20,000 and a fully equipped service truck can carry a $100,000 price tag. Most dealers expense the cost out over five to seven years, according to Mr. Formanek.
``We started purchasing boom trucks and jacks to jack up bigger equipment. And we increased inventory on larger tires and increased warehouse space and trained employees on the larger equipment,'' said Don Nebelsick, owner of Don's Tire & Supply Inc. in Abilene, Kan. ``We try to trade a truck in every seven years. We have five trucks, so it's an annual expenditure of $15,000.''
While the cost of new trucks can be a deterrent for small businesses, Mr. Upmeyer reasoned that the cranes and updated accessories offer more safety features and reduce physical exertion, thus curtailing injuries and insurance claims. ``That weighs into the price of the truck.''
He also noted that farm tire service trucks are not purely for the agriculture market but are used to service commercial and OTR tires as well.
Smaller tire dealerships that can't afford new equipment have the option of the secondary market-buying used or refurbished trucks from manufacturers. According to Mr. Upmeyer, the secondary market is offering newer used vehicles as larger dealers often trade in their trucks every three to four years.
Yet some tire dealers can't justify the expense and have left the farm tire market. ``I've seen lots of tire dealerships (in business) five to 10 years ago that are gone now,'' Mr. Upmeyer said.
The demise of some small dealerships has been a boon for others. Bree's Tire Service in Osage, Iowa, for example, has gained customers from tire shops that left the business. Now Bree's services a 50-mile radius and recently bought a larger service truck with a crane.
``A crane is safer and less back breaking, especially when doing dual-assemblies,'' said Assistant Manager Brian Bruesewitz. The dealership's old truck didn't have a crane, he said, so an upgrade was an easy decision. ``I go on-site with the service equipment, and I had a few dual-assemblies that fell on the ground and I couldn't get them up.''
Bree's used to run two trucks, but Mr. Bruesewitz said it was hard to find good employees and ``we found it was more cost-effective with one truck and to keep it running,'' since one of the two trucks was usually idle. Despite the extra mileage put on the one truck, the dealership keeps it in good shape with regular maintenance, he said.
``Now we don't buy service trucks unless they have a boom,'' said Roger Howland, owner of Country Tire Inc. in Blair, Neb. He has five locations with one truck per location plus a back-up vehicle. ``Before, (a crane) was an option that we would occasionally buy. Now we put one on every truck.
``Upgrading is a necessity if you want to stay in the farm tire business,'' he added. ``A lot of dealers need to do that, but they don't.
``If you're not going to get a good truck to do the work, it makes good sense to get out of the (farm tire) business,'' he said.
With larger farm tractors come more on-site service work. ``About 90 percent of our farm tire business is done on the farm,'' noted Mr. Howland, whose trucks travel a 40-mile radius from each store.
Mr. Howland said he couldn't imagine 20 years ago paying the current prices for service equipment. To offset the expense, he said, ``you have to increase business and be known.
``We do whatever needs to be done to get the farmer back on the field. Time is money,'' he said. ``We give the best service possible, and hopefully they'll remember that and come in for other purchases.''
``Your service area is going to grow if you elect to be in the business because fewer people are staying in the business,'' said Mr. Nebelsick. ``Quite a few people do farm tire business but aren't willing to do the field service work.''
Farm tires account for about 30 percent of Don's Tire's total sales, but each year the dollar volume has increased, Mr. Nebelsick said. ``In the last four years we've doubled our farm tire sales.
``Farmers are very loyal customers. They are still a very service-oriented business. If you're out there servicing them, they'll remember when you came out and they'll come in (to your store).''
John Dvorak, assistant manager of Bair's Firestone Store in Atlantic, Iowa, said his farm customer base is half what it was when the business started 30 years ago due to consolidation of farm ownership. But the farm acreage is still the same, so the dealership has increased its overall tire and dollar volume.
Once a dealer establishes a farm account, Mr. Dvorak said, he also gets additional business servicing the farmers' cars and trucks. ``Farmers are loyal. You take care of them, they'll take care of you.''