Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/114173
Editorial Retailers on wholesalers Is the one mistreating the other? Dealers speak out T he tire wholesale distribution channel and ran out of tires, but that has changed this year. has changed a great deal in the last 10 Trough the frst few months of the year, so far, years. Te big got bigger. And the larger so good. But that can change. You just have to distributors stopped being just "tire wholesalers." stay on top of it." Manufacturers put the responsibility of deliverDealer No. 4: "I'm sure the wholesalers are ing tires to the smaller dealers in their hands. Wheel holding back. I think they should be a litle more and equipment manufacturers took advantage of aggressive in giving us discounts. We've asked for them, too. Tey have, in many ways, become a special discounts on things and sometimes we one-stop shop for tires and tire service equipment. get them, but not always. Signifcant price increases the last several years By Bob Ulrich "We're a prety good size dealership. About have afected margins at both the wholesale and 90% of our tires are purchased directly from the retail levels. And that brings me to a complaint a retail manufacturer, although last year, when the fll rate hovered dealer friend of mine shared with me at the 2013 Goodyear around 65%, we had to buy more from our wholesalers. Dealer Conference. "We do some wholesaling ourselves, and compete with "I don't think our wholesalers helped us with price American Tire Distributors with the car dealerships. Tey increases last year," he said. "Tey could have absorbed can undercut us a litle. It's a litle upseting, but we have more of the increases." to buy from them, too, once in a while." Interesting statement. I wondered if my friend's atitude was widespread, so I asked dealers from across the country I also talked with a representative from a large wholesale what they thought about the relationship. distributor, and voiced my friend's concerns to him. "We are not holding anything back," he said. "It's all about value. Dealer No. 1: "I don't think they're cheatWe ofer more than just tires. ing us, I think they are in the same position We have a lot of programs as we are. that make it easier for our "Margins were down for everyone. All the customers to do business. spifs are gone. Te guy saying 'You want to We try to keep costs down, go golfng next week? Go to dinner?' It's all but we, too, have to get a gone. Te guys selling parts, same with them. return on our investment." Tey don't have budgets anymore. Te most Results from Modern Tire maybe you get is a free calendar. Dealer's exclusive "State-of"You still get volume discounts, but you the-Industry Survey" indidon't ofen see them give special pricing on cate that many wholesale disitems they want to get rid of anymore. tributors sufered setbacks "Nobody's making what they did before. in 2012 vs. 2011. Although No one has the 2% to give. Te 2% that went 59% of the wholesalers said up is a survival 2%." their dollar sales were up (by Dealer No. 2: "In my opinion, some of our an average of 19%), that was wholesalers have not been coming to the table. Tat has down from 75% in 2011 and 82.3% in 2010. Close to 30% been going on the last few years. of the wholesalers reported their sales were down (by an "Do you think they are concerned about the litle guys average of 10%), compared to 16.7% in 2011. like us? I don't think so. I think they are more concerned Only 35% said their botom-line proftability was up; with big box stores. in 2011, 58.3% said it was up. Even more telling, 56% said "Our best wholesaler is our smallest. He delivers to us their proftability was down in 2012, compared to 18.4% every day, but not all of them do. I also wish the larger the previous year. wholesalers could help us a litle more with our advertisAccording to the 2013 Modern Tire Dealer Facts Issue, wholesale distributors (and, to a lesser extent, tire manuing, like they used to." Dealer No. 3: "In 2011, one of our wholesalers held back facturers) account for 77% of the tires sold through the compared to 2010, but they more than made up for it last consumer tire distribution channel. As long as they work year. We did make a fuss — sometimes you have to make with their customers, their role will continue to expand. ■ things happen yourself. Another one of our wholesalers had a lot of specials and promotions and did an excellent If you have questions or comments, please email me at job last year, too good, actually. Tey had inventory issues bob.ulrich@bobit.com. 'Trough the frst few months of the year, so far, so good. But that can change.' 4 MTD March 2013