OEC Blog

Increase Tire Sales … Not Carrying Costs

Increase Tire Sales … Not Carrying Costs

The industry is abuzz with the latest sales trend of replacement tires. Ok … every parts manager knows what a pain they can be. They’re low margin, slow-moving, high capital parts that take up a ton of space and compete in an already saturated tire market.

But wait, there’s good reason for today’s greater emphasis. Certainly, OEM competitive pricing programs have come a long way to making dealerships a viable choice for tires. But the real news is the technology that gives you the ability to have the right tire stock – in stock – at the right time . . .  with minimal carrying costs.

Marketable Inventory, Reduced Tire Management & Decreased Carrying Costs

Every technician knows the right tools make the job easier. Same is true for using the right tools to automate daily tire replenishment, with one or more distributors, based on previous day’s sales. The result is a leaner, more marketable, just-in-time inventory mix based on what’s selling at your dealership – and streamlines tire management to about an hour or two a month and carrying costs to just 4 tires deep per selection.

Set up as an automated ordering tool that works with dealership DMS products and OEM programs such as Ford’s Around the Wheel initiative, tire replenishment tools recognize stock-out, or low stock, thresholds established and maintained by parts managers. Once your tire inventory hits that pre-established threshold, the tool automatically creates a stock order – with the dealership’s preferred supplier – for same day or next day delivery. It also accommodates multiple suppliers allowing a parts manager to select multiple distributors based on authorized tire program brands stocked by the distributor.

At Town & Country Ford in Bessamer, Alabama, George Clarke, Parts Manager, relies on automatic tire replenishment for the success of his tire program. As the largest Ford parts wholesaler in Alabama and the go-to dealership for Roush Mustangs and customization, George services a varied clientele. He works with 5 different tire distributors to stock the most marketable inventory mix for stand-alone tire sales and the more profitable tire-wheel accessory package. A firm believer that tires are necessary to retaining service customers, it wasn’t until he adopted automatic tire replenishment that tire sales became a profitable – and pleasant – enterprise for him.

Today, he sells $13,000 – $16,000 worth of tires monthly, stocking 215 different tire sizes and brands, and spends only 5 minutes a day on tire management.

In addition, he’s investing the same amountin tire capital while gaining a 3% sales uplift from a broader, more marketable coverage. Where he used to stock fewer part numbers with greater depth to cover in-between shipments, he’s now converted to stocking more sizes and multiple manufacturers of the same size while maintaining 80% of his inventory at only 4 tires per part number.

Hot Shot Deliveries are a Thing of the Past

With distributors continuously optimizing delivery routes and reducing hot shot deliveries, automated tire replenishment is the only way to go to ensure a lean, just-in-time inventory that can be replenished daily.

How do you manage your tire inventory for maximum sales and minimal costs?