How do you find success as a small one-location tire dealership in a business environment increasingly populated by giant tire chains and franchises that seem to be growing in size by the day?
It's not easy. Running a profitable tire dealership never is. But Rich Jarvis, owner of Custom Tire & Auto Inc., a one-outlet dealership in Fort Myers, Fla., has found a formula that works for him.
His secret? He and his team at Custom Tire treat everyone who walks into his shop as family.
“Every customer who comes in knows all my guys' names, my guys know their names,” he said.
This approach, which equates to exemplary customer service coupled with quality work, is the type of approach it will take for smaller dealerships to make it in what has become a dog-eat-dog world of tire retailing.
To stand out, small dealerships must do something different. Offering the lowest prices and competing head-to-head with the behemoths simply won't cut it. The market will wean out the bottom feeders.
This has become clear as the tire industry evolves into a marketplace populated by tire chains extending their reach into more cities and towns, challenging the status quo.
How big is this tire retailing evolution? Compare Tire Business' rankings of North America's largest independent tire dealerships in this issue with those of 10 years ago.
Not only do the lists feature some different players, they show how fast change has been taking place.
Consider perennial leader Discount Tire/Americas Tire. It has continued its impressive growth into 31 states with 906 stores and $4.32 billion in sales. This compares with 635 stores and $2.1 billion in sales 10 years ago.
Monro Muffler Brake Inc., which was still in the early days of its by-now-relentless move into tire retailing, has grown its tire-centric business nearly five-fold to 521 stores and $507 million in sales compared with 115 stores and $120 million a decade ago.
Some of this industry growth has been fueled by private equity firms, which weren't much of a factor in tire retailing 10 years ago. These money firms have found the industry ripe for growth and are providing their cash and financial acumen to several firms—among them Mavis Tire Supply, which purchased Somerset Tire Service (STS) and its 156 stores in a deal that was supported by minority owner and private equity firm ONCAP Group of Toronto.
Franchising also has become a greater factor, led by TBC Corp.'s Big O Tires unit, which seems to have regained its mojo after several slow years. Other franchises are finding success, as well, including Car-X Tire & Auto, R&R Tire Express & Custom Wheels and Midas/Speedee.
This is today's retail tire environment—lots of large, aggressive, well-run dealerships looking to grow and expand their marketing territories.
Smaller dealerships can indeed thrive in this environment, but they must have that special something that makes their operations standout—just like Custom Tire with its family-first approach.