The tire business can be a seasonal one. It can also be geographical. Depending on where you’re located and what time of year it is, as an independent tire dealer, you may experience heavy sales periods followed by dry spells.
Things you can do to avoid a total drought:
• Have a “limited-time only” sale on certain tires and accompanying service. During a slow period, it may be more economical to sell merchandise at a discount rather than just let it sit on the shelf for several months. However, this strategy won’t work if customers are not aware of the reduction or if there is no time limit on the sale. Use special mailings, ads and signage in front of your dealership to announce the sale. Experts say it usually takes a discount of 25% or more to motivate customers.
• Offer flexible financing. Promotions such as “90 days same as cash” or “No payments until fall” can bring in customers who otherwise might have waited to buy their new tires or wheels. In some instances, “Buy a set of tires and get a free alignment” or “Buy one set of tires and receive wheels at half price” can be attractive to customers, but it is a more appropriate strategy for lower-priced items.
• Having a clearance sale (50% to 70% off retail) is typically a successful way to get customers into your dealership during slow periods. Display clearance items in the back of your store so that customers will see your full-priced or partially discounted displays as they walk through the showroom.
• Make your off-season sales part of your regular yearly plans and schedule them well in advance. If you wait until the middle of your off-season to start planning sales and special offers, you might be reluctant to part with money for advertising because cash flow is already down. It’s always smart to budget early in advance for the off-season and arrange advertising ahead of time. You might be able to negotiate a price reduction by paying for advertising several months in advance.