It's all about the buying power.
Bill Jansky, owner of Jansky Tire Service in St. Manitowoc, Wis., joined Bauer Built Inc.'s Tire Shop affiliate dealer program in 2000, a year after it was launched. He hasn't looked back since. The best part of Tire Shop, he said, is the selection and buying power, meaning the more you buy the bigger the discount.
``If you had a certain quantity you get a 1-percent discount,'' he said. ``It goes by your volume.''
Mr. Janksy opened his store in 1989. Becoming a Tire Shop affiliate member has definitely bolstered his customer base and helped make his business more recognizable. Customers are attracted to the Tire Shop logo and doing business with someone who's more than just a local independent tire dealer, he said.
Since its launch, the Bauer Built program has continued to grow, now numbering 200 dealers in six states, primarily in Wisconsin, Minnesota and Iowa, and also in parts of Michigan, Nebraska and Illinois.
Larry Hildebrandt, vice president of marketing for Tire Shop, said the company might continue to expand throughout the states where it already has dealer outlets, but at this time the program has no plans to move outside of its geographic region. There are no projected numbers on how many Tire Shop dealers Bauer Built would like to have.
Tire Shop is attractive to its dealers because of the flexibility of the brands that are offered and because of earned quarterly bonuses, which are not brand specific, Mr. Hildebrandt said. Tire Shop attracts dealers by adding additional economies of scale or marketing techniques to its program.
Mr. Hildebrandt said Tire Shop is Bauer Built's highest quality program, and the company is more concerned with the quality of its members' stores-not the number of dealers.
The growth rate is pretty steady, and Mr. Hildebrandt said the program's ``criteria are a little higher'' and ``we're a little more selective.''
Tire Shop dealers are required to meet some minimal purchasing requirements, including 100 units per month and 300 units of any brand during a quarter, but most dealers are substantially ahead of that, he said.
``We're looking for somebody who is basically progressive in the marketplace, who wants to advertise and promote their business,'' he said.
Dealers must do a minimum of two direct mail pieces a year-one in spring and fall, Mr. Hildebrandt said, and dealers can personalize it with their own logos and styles.
The Bauer Built affiliate program stands out from other similar programs because most Tire Shop locations are not only full service centers but also full service agriculture centers, according to Mr. Hildebrandt. With its emphasis on agricultural sales, the automotive customer is also often the agriculture customer, he said.
Tire Shop offers Michelin, BFGoodrich, Bridgestone, Firestone, Kumho, Hercules and Mastercraft passenger and light truck tires and Michelin, Firestone and BFGoodrich agricultural tires. The program also features exclusive territories for Hercules, Mastercraft and Michelin agricultural tire dealers.
No new products or services have been added to the program within the last 12 months, he said.
Since 2003 the Tire Shop affiliate dealer program has lost 43 stores. That loss, according to Bauer Built President Jerry Bauer, stems from restructuring the program, which changed criteria for enrollment and increased some requirements.
Despite the loss of some members, Mr. Hildebrandt said overall the program still attracts dealers and has gained three since 2005. ``There are always some that go out of business or get bought out or have some financial difficulties, and we take them off the program,'' he said. Others may be second generation owners who decide to leave the business because they have no one to leave their shop to, and yet another big reason, he said, is a shift in the marketplace.
``People may be gravitating to a larger city, and I'm sure that's across the country,'' he said.
Mr. Hildebrandt said he thinks a big problem for the independent tire dealer is the proliferation of SKUs.
``The number of SKUs in the marketplace (is) creating some problems,'' he said. ``The applications are so widespread that it's getting difficult to have coverage.''
Although sales this year are not terrible, Mr. Hildebrandt said the marketplace seems to be ``sluggish'' due to several factors including escalating gasoline prices.
Besides selection and buying power, Mr. Jansky said other features of the affiliate program are the employee uniform and parts discounts, as well as supply availability, which he claimed is better from Tire Shop than with other small area dealers with whom he has worked.
``I'm glad Bauer Built started the Tire Shop because it's excellent for someone like me,'' he said. Jansky Tire Service is 60-percent commercial, 30-percent retail and 10-percent agricultural. ``Some places out there are more aggressive than I am in terms of growth,'' he added, typifying his dealership's growth as ``slow but good.''
Kim Rumler, owner of Hanson Tire & Custom Exhaust in Hayward, Wis., said Bauer Built has been his primary supplier since he bought his shop in 2000. He signed on as an affiliate in 2004. It was important for him to remain an independent dealer, he said, and Tire Shop allowed him to do that. Like Mr. Jansky, he was attracted to the buying power the program provides.
``Probably the best quality is the bonus money. It's the primary and only reason I joined,'' he said, talking about the percent of sales he receives when purchases reach a certain volume.
Another great feature, he said, is the assistance Tire Shop dealers receive with advertising, which can sometimes get pricey.
However, Mr. Rumler said he does not think being a Tire Shop affiliate has improved his customer base.
``I feel very confident about my business here in this town,'' he said, noting that with a population of about 2,000, he attracts customers by word of mouth-not by a logo or by advertising.
Despite that, he said he wouldn't remain with the program if he wasn't satisfied, and he has no plans to leave.