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Top 5 Revenue Boosters for Tire Sales

Top 5 Revenue Boosters for Tire Sales

It’s no secret. Tire sales are a hot topic in the automotive industry these days. Auto manufacturers and major dealer groups alike are launching aggressive programs to reclaim the $30.1 billion replacement tire business.

And, for good reason. Tire sales typically lead to expanded parts and service revenue for brakes, ride control and steering and suspension. In fact, according to a 2012 Automotive News article, Asbury COO Michael Kearney asserted, “For every dollar of tire sales in any given shop in the United States, the consumer spends $1.50 in additional sales.” That’s a powerful incentive to any hard-working fixed operations manager.

With that said, tire inventory can be a low margin, high capital sort of business if you don’t know what you’re doing.  The following provides the top 5 revenue boosters from successful dealers who have turned their tire sales into a profitable and steady revenue producer:

1. Follow the 100% rule often used successfully in F&I (Finance & Insurance) which states 100% of the customers receive a presentation 100% of the time.   For tires, that simply means that 100% of the cars in your service drive are inspected 100% of the time.  As the old adage goes,” 75% of customers buy tires from the first person who tells them they need them.”  Be the first person.

2. Take advantage of OEM price competitive programs.  GM Tire Price Match Guarantee and Ford’s Around the Wheel programs, to name a few, offer substantial incentives to dealers and consumers.  With consumer-friendly price matching and dealer volume incentives, these programs allow you to effectively and profitably compete against tire retailers.

3. Stock “good-better-best” options to provide customers multiple choices to match any budget.  To sift through the enormous array of tire brands and models, talk to your local distributor for advice on the most popular choices.  Or, better yet, many OEMs, such as Ford, offer local market data on the most popular tire selections based on that locale’s vehicles in operation.

4. Use technology for automated tire replenishment.   While OEM and large dealer group programs offer premium competitive pricing, they hold little weight if the tire is not in stock.  Fortunately, there are tools available today that integrate with dealer parts inventories and many of the OEM tire programs.  This technology enables dealerships to work with their preferred tire distributors to automatically replenish inventories on a daily basis.  Furthermore, dealerships can stock a broader, more marketable array of tire selections just 4 tires deep – all without “breaking the bank” on carrying costs.

5. Train on how to sell and display tires.  Surprisingly, this fact is often overlooked.  While staff needs training on tire knowledge and sales skills, they also need to emphasize the value of an OEM tire.  Car companies and tire distributors, on average, spend $1 million to develop and select specific tire attributes that enhance the vehicle’s safety features.  Helping the consumer understand this difference is essential.

When the rubber meets the road, you’ll find these tire tips will help boost your parts and service revenue.  Feel free to share some of your selling and stocking tips for revving up your tire business.