Sources of Supply, Showroom Merchandise Layout and Sources of Information on Store Decoration and Product Display - Tire Reviews, Buying Guide & Interesting Facts

Last Updated on 06.08.2024 by hrushetskyy

Table of Contents

SOURCES OF SUPPLY

The following list is representative but not a complete compilation of the manufacturers and distributors of tires and related supplies. New companies are coming into the market all the time and you should make it your business to watch for the announcements of their development. Do this by subscribing to relevant trade magazines listed in the Start-Up section of this report and examining their ads and editorial content.

Study the pages of the NTDRA Dealer News for names of suppliers to the trade. Typically when you write to the sales or marketing department of a national company you will be put in touch with the tire distributor nearest you. Shop around, get to know the people in the industry and help them to know you. Your business-to-business Yellow Pages is another source for local suppliers. Check the listings under “Tire Manufacturers & Wholesalers.”

Tires

Armtec Corp. Armstrong Tire Division 500 Sergeant Drive New Haven CT 06536, (203) 784-2200
Uniroyal-Goodrich Tire Co. 600 S. Main Street Akron OH 44397, (216) 374-3000
Cooper Tire & Rubber Co. 701 Lima Avenue Findlay OH 45840, (419) 423-1321
Dunlop Tire & Rubber Corp. RO. Box 1109 Buffalo NY 14240, (716) 773-8200
Firestone Tire & Rubber Co. 1200 Firestone Parkway Akron OH 44317, (216) 379-7000
Goodyear Tire & Rubber Co. 1144 E. Market Street Akron OH 44316, (216) 796-2401
Kelly-Springfield Tire Co. Lee-Tue & Rubber Co. P.O. Box 300 Cumberland MD 21502, (301) 777- 6000
McCreary Tire & Rubber Co. Inc. P.O. Box 749 Indiana PA 15701, (412) 357-6600
Nissho Iwai American Corp. Tire Division Broadway Plaza 700 S. Flower Suite 1900 Los Angeles CA 90017, (213) 688-0600
Sumitomo Tire 601 Gateway Boulevard Suite 650 S. San Francisco CA 94080, (415) 583-5555
Toyo Tire Corp. 300 W. Artesia Boulevard Compton CA 90220, (213) 537-2820

Tire Supply Houses

Oliver Rubber Co. P.O. Box 8447 Oakland CA 94662, (415) 654-7711
Truflex Rubber Products Co. 1667 N. Main Street Los Angeles CA 90012, (213) 224-6300
Hennessy Industries 1601 J.P. Hennessy Drive LaVergne TN 37086-1600, (615) 793-7533
Myers Industries Inc. 1293 S. Main Street Akron OH 44304, (216) 253-5592
Grey Products Corp. HC-63 Box 40 Durand WI 54736, (715) 283-4263
Bandag Inc. Bandag Center Muscatine IA 52761, (319) 262-1400
Admiral Retread Equipment Inc. 689 Weber Drive P.O. Box 540 Wadsworth OH 44281, (216) 336- 3531

Ancillary-Sale Suppliers

AP. Parts Co. 31275 Northwestern Highway Farmington Hills MI 48018, (313) 851-8844
Champion Spark Plugs 900 Upton Avenue P.O. Box 910 Toledo OH 43661, (419) 535-2567

OPEN-TO-BUY

With no past performance to provide guidance the new retailer must calculate the open to buy the dollar amount budgeted for inventory purchases for a given period (usually one three or four months) in the same way initial inventory was calculated by determining the amount of sales needed to pay store overhead and cover the owner’s personal needs.

But after the business has been operating for several months to a year the store’s inventory-control system will indicate minimum inventory levels and monthly or seasonal sales volume. With this information the store owner can determine the shop’s open-to-buy position through the following formula (using hypothetical data):

Planned inventory	$25 000
Planned sales	25.000
	$50 000
Actual inventory	$27 000
Stock on order	13.000
less	$40 000
equals Open-to-Buy	$10 000

SHOWROOM MERCHANDISE LAYOUT

The following illustration shows an approximate distribution of floor-space values in a single-entrance small showroom. The diagram indicates the relative sales value (in either dollar or unit volume) of space on the display floor reflecting the movement and types of store traffic. Almost always the space nearest the traffic flow which offers the greatest exposure to customers delivers the greatest sales potential. Conversely the rear of the store normally has the lowest sales potential.

SAMPLE FLOOR LAYOUT

8il Floor Vitati by AmCustomers coming in your front door behaves like pedestrians on the street. Those who know what they want head directly for it while those who don’t know (the “just-looking” crowd) move from place to place as their interest is caught by goods on display. These two types of customers are often referred to as destination and shopping traffic.

Destination customers move in planned logical sequences. Shopping customers take a random approach usually drifting to the right after they enter your front door. Destination traffic will generally turn left to avoid crowds. As a result shopping traffic circulates through a store in a counterclockwise direction while destination traffic moves clockwise. This pattern provides a key to effective layout of goods not just near the door but throughout your entire selling space.

Window Display

Displaying your merchandise in three dimensions is an indispensable advertising tool. If any item in the window fails to give the expected volume of sales replace it at once even in the middle of a busy selling day. Display windows are not only the most valuable advertising space in the store they are the “face” of your store that impresses passing traffic.

Coordinate displays with national advertising whenever possible. You can do this in many ways. For example time your displays to appear during national campaigns and include pages from the national media or placards stating e.g. “AS ADVERTISED IN CAR & DRIVER.” Seasonal displays are usually effective. They offer opportunities for originality and related-item selling. They also help build the store’s reputation for merchandising alertness.

Interior Display

Interior displays should have price information on or by each item and informative signs directing customers’ attention. Mass displays are very effective especially jumbled displays arranged so there is nothing for customers to knock down when they make selections. Many retailers have found that the effectiveness of mass displays is noticeably increased by the addition of advertising placards calling attention to featured goods and giving the prices. If the offering has a special price feature and there is a time or quantity limit say so.

Use merchandising aids offered by manufacturers and distributors, they provide authentic sales information about the goods as well as space for pricing. Tire wholesalers often provide point-of-purchase display racks or stands when you place an order. These can be put on your showroom floor or outside depending on your needs. Customers look over the displays and when they choose the tires they want it is a simple matter to go into the storage warehouse and pull the right models.

Dealer aids represent extensive and often expensive studies undertaken to discover the appeal that works best in presenting a product to the public. Their tested pitch lines are bound to help sell the goods.

We covered the installation of tire tiers earlier in this report. There are other methods of displaying tires as well. You could build your own tire storage shelves out of sturdy lumber. Additionally tire suppliers have various inventory display pieces that can be useful. Up to 50 tires can be stacked on a tubular steel rack and wooden pallet combination.

Trimming a window or display area might seem to be a purely decorative aid to make a store look enticing but it incorporates much more than beauty. Attractive creative displays put customers in a buying mood and sell merchandise. Consider store planning a long-range investment rather than a source of immediate profits. You will be most successful if you regard your tire store as a theater that presents a performance each time a customer walks through the door.

SOURCES OF INFORMATION ON STORE DECORATION AND PRODUCT DISPLAY

Magazines Decorating Retailer National Decorating Products Assoc. 1050 N. Lindbergh Blvd. St. Louis MO 63132, (314)991-3470
Interiors Billboard Publications Inc. 1515 Broad way New York NY 10036, (212)764-7300
Stores National Retail Merchants Assoc. 100 W. 31st SL New York NY 10001, (212)244-8780
Visual Merchandising and Store Design ST Publishing Co. 407 Gilbert Ave. Cincinnati OH 45202, (513)421-2050

Available Book Lists

ST Publishing Co. 407 Gilbert Ave. Cincinnati OH 45202, (513)421-2050
National Retail Merchants Association 100 W. 31st St. New York NY 10001, (212)244-8780

Associations

Institute of Store Planners 25 N. Broadway Tar- Raytown NY 10591, (914)332-1806
National Association of Display Industries 470 S. Park Avenue South New York NY 10016-6820, (212)213-2662
National Decorating Products Association 1050 N. Lindbergh Blvd. St Louis MO 63132, (314)991- 3470
National Retail Merchants Association 100 W. 31st St. New York NY 10001, (212)244-8780

PRICING

If you are in less affluent areas you must be very competitive with your prices because most of your customers will be shopping price. If you are in an exclusive area the customers may not even ask what the price is in which case they are shopping service. Basically the markup in this business is 25 to 30 percent. This is not much considering the high-ticket and high-bulk nature of these items. A tire that costs you $35 might bring in only $50 in a strongly competitive market. Keep in mind that the discount chains with tire departments depend wholly on volume and are often willing to cut the bottom out of the market just to maintain high volume. You have to compete with service other things being equal. Just keep in mind though that a hot-shot radial that runs the consumer $100 may run you as much as $65.

You make the most money in add-ons: selling valve stems (12 cents cost to you $2-$3 replacement cost per tire for consumer), doing a spin balance ($6-$7.50 per tire). From the point of view of margin you can make much more money on the spin balance than on the tire itself.

Valve stems are one-way stoppers on the wheel which are replaced when a tire is replaced. Like the tires themselves they are subject to weather beating. If they are not replaced along with the tires the seal might not be tight and air might leak out of the tire.

There is a twofold purpose to doing a spin balance. When the rubber tire is produced it is conceivable that it is not perfectly weighted or round. You put wheel weights on in the spot exactly across the diameter from the point of roundness deviation. If the roundness is off on a tire this is picked up on the wheel balancer. You put a corresponding weight on the other edge of the wheel so the car will have a smoother ride. This also keeps the tire from “dishing “cyclic hop or “scalloping” (wearing unevenly). The digital readout on a spin balancer tells you how big a weight to put on the wheel. Though in the past tire dealers used to charge extra per weight this is not generally done today.

Some tire shops also offer an extended warranty program. Like car-care warranties these are insurance policies that provide the consumer with free or cut- rate replacement of tires or with a certain number of wheel balancers. You will find that for the most part customers who pay for these warranties rarely follow through on them. That is they stick them in the glove compartment or in some drawer at home and forget about them.

Fixing flats is another profit center. This is a fairly uncomplicated procedure. You use vulcanizing glue and chemical patch which combine to turn the patch into an integral part of the tire substance. The fee for this varies from shop to shop. Typical charges we found were from $6 to $9.50 depending on the operation.

Shock-absorber replacement represents an easy additional sale but with reduced profit margins according to distributors we interviewed. Brake jobs represent perhaps the most profitable ancillary service battery replacement an additional profit center. Shock-absorber replacement is less profitable due mainly to wholesale price.

Theoretically every item you carry should be priced to cover its wholesale cost freight charges a proportionate share of your overhead (fixed and variable operating expenses) and a reasonable profit. In reality some items will warrant a high gross profit and others require a low or no gross profit in order to move them quickly. As long as the aggregate gross and net profits are sufficiently high your business is successful.

Such factors as high overheads (particularly when renting in prime mall or shopping-center locations) unpredictable insurance rates shrinkage (shoplifting employee or other theft shippers’ mistakes) seasonality shifts in wholesale product costs and freight expenses and sales or discounts will all affect the final pricing.

COSTS

Overhead

We use “overhead” here to refer to all non-labor expenses required to operate your business. Expenses can be divided into fixed those that must be paid usually at the same rate regardless of the volume of business and variable (or semi variable) those that change according to the amount of business.

Fixed Expenses: No matter what the volume of sales is these costs must be met every month, a good example is the flat rent paid for the business premises. If the rent is $1 000 per month irrespective of profits it is a true fixed expense. Other fixed expenses are: depreciation on fixed assets (such as cars and office equipment), skeleton-staff salaries and associated payroll costs, liability and other insurance, utilities, membership dues and subscriptions (which can sometimes be affected by sales volume), and accounting and legal costs. All of these continue at the same rate with little or no relation to the firm’s revenues.

Variable Expenses: Most so-called variable expenses are really semi variable. They will fluctuate from month to month in relation to sales and other factors such as promotional efforts seasons and variations in the prices of suppliers’ products and services. Fitting in this category are: phone calls, office supplies and business forms (the more business the greater the use of these items), printing, packaging, mailing, and advertising and promotion. In estimating variable expenses it is common to ignore month-to-month variations (unless they are large and can be accurately predicted in advance) and use an average figure based on an estimate of the yearly total.

Cost of Goods Sold

Cost of goods sold aka cost of sales refers to your cost of purchasing products for resale or to your cost of manufacturing the products. Freight and delivery charges are customarily included in this figure. Accountants segregate cost of goods on an operating statement because it provides a measure of gross profit margin when compared with sales an important yardstick for measuring the firm’s profitability.

Normally the cost of goods bears a close relationship to sales. It will vary however if there are increases in the prices paid for merchandise that cannot be offset by increases in sales prices or if special bargain purchases are made that increase profit margins. These situations seldom make a large percentage change in the relationship between cost of goods sold and sales. Therefore the cost of goods sold is a semi variable expense.

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