Inaugural Milestar program focused on dealer profits

GARDENA, Calif. — Three words might describe the impetus behind Tireco Inc.'s Momentum Associate Dealer Program: Preserve dealer profit.

Andrew Hoit, president of brand division for Tireco, said Milestar's new four-tiered program, which launches today (Oct. 1), said Tireco believes putting money back in the dealers' pockets is one of the key selling points of the new initiative.

The shift in the balance of sales is shift to lower tiers, Hoit said, is lowering payouts for dealers and wholesalers.

"Even if you're making 20 points of margin, that is on a $50 tire instead of 20 points of margin on $100 tire," Hoit said. "So there there's profit erosion. Everybody knows rents are up, salaries are up, fuel costs are up. Practically every expense associated with doing business today is up. So when your margin dollars are down, it just creates a spiral that's tough."

The Milestar Associate Dealer Program, Hoit said, addresses that. The program offers a suite of features and benefits similar to a Tier 2 tire, including quarterly bonuses based on sales performance. In addition, dealers will have access to marketing resources, including the Milestar Academy (milestaracademy.com), an online portal that provides distributors and dealers with in-depth product knowledge and marketing support.

Milestar is one of several import brands marketed by Gardena-based Tireco.

Dealers may monitor their sales with advanced tracking tools, ensuring they stay on top of their progress. The payout structure rewards dealers based on sales volume; bonuses increase as dealers reach higher sales levels.

Hoit called the program "one of the most comprehensive and competitive in the industry today, and I think it's really going to benefit the brand."

"We're equipping our dealers with additional marketing support to help them really grow with the brand, not just to earn quarterly incentives," Mike Park, assistant marketing director at Tireco, said.

The challenge, he said, was to differentiate this program from similar programs from higher-tier tire makers.

"In order for us to really create value was for us to go after Tier 1- and Tier 2 type-program, features and payouts, so that we created — added value for (dealers) and for Milestar. That's what really helps separate our program with the rest of Tier 3 and Tier 4 programs."

Hoit and his team have discussed initiating a dealer program for several years, but obstacles — including something called the pandemic — seemed always to get in the.

It was about 18 months ago when Park and this team oversaw the implementation of minimum advertised pricing (MAP).

Since then, Tireco has closely monitored the program, enforcing it with retailers when necessary.

"So we've been really good at just maintaining the integrity of the program," Park said. "We're not putting out prices that doesn't make sense in the market. We're being very reasonable, but we're also protecting our retailers, so they're making the margin that they need to make from the Milestar brand."

Once MAP initiative became established, Tireco decided on July 1 that it was time to initiate the associate dealer program. The next step, according to Park, was to seek input and feedback from the Milestar dealer network. He said dealers helped to drive the program's payouts, features and benefits.

"For us to launch a program that our dealers weren't excited about and weren't behind would be a waste of time and energy and resources, honestly," Hoit said. "So it was absolutely critical that our dealers helped us shape this program and mold it."

Hoit described dealer response thus far as "overwhelmingly positive."

"This is a true commitment to the long-term sustainability of the brand and brand value, brand awareness," Hoit said, noting the company is working on branding strategy that will be rolled out in 2025. That will include product expansion, advertising and marketing, with the goal of making the brand more easily accepted at the retail counter.

"We recognize that Milestar is not a household name today," Hoit said. "It's not a Tier 1, Tier 2 brand that's been around for 50 years."

So when a dealer recommends a Milestar tire, he said consumers researching the product online will find a robust website and social media presence.

"All those things tie together with our with the value proposition of Milestar," Hoit said.

Milestar covers 93% of the market today, Hoit said, while serving unusual aftermarket rim sizes between 37 and 42 inches.

"We believe that the dealers need better partners at the low end, because the market is gravitating towards more value type brands and products," Hoit said. "You need a true partner in that category, not just a widget that has no value other than a transaction."

Milestar soon will launch its inaugural, studdable winter tire product for the U.S. market, just in time for the 2025 selling season.

The line, which will be called Milestar Winter Guard, will be available for orders at end of the first quarter of 2025, and products will begin delivering in early 3Q of 2025.

The line will feature the severe ice symbol. It will also be available to be pre-studded from the factory.

Hoit said being able to order tires already studded "is a nice benefit for distributors, so they can order either traditional, not unstudied, or pre-studded from the factory, so they don't have to stud them in their retail store. And dealers have really responded well to that."