Twist and Turn

Monster Profits On These Micro-Machines For Smart Dealers

Construction is slowly improving and the agriculture market looks reasonably solid this year. So does that mean the skid-steer market should do well?

If dealers look solely at those two factors, they’d be missing a big piece of the pie.

Yes, the skid-steer market is doing well. However, construction and farming are just a couple factors. Just as there are so many skid-steer loaders to choose from, there are many more tires to go on them.

Then consider that accomplishing the same job with the same piece of equipment in different regions may require different tires, and dealers get a taste of what the skid-steer market is really like.

But what dealers want to know is, how’s the market doing?

Market Outlook Solid
Expansion.
That’s the word to describe the skid-steer market. Or, more to the point, room to expand. The future of this market looks good, and there’s room to maneuver.

"In our opinion, the market for skid- steer tires will continue to expand in volume and variety," said Robert Sherkin, president of Dynamic Tire. "The versatility of these machines is making them more popular all the time. Manufacturers, equipment dealers and users are finding more uses for these machines.

"This versatility is creating increased demand for tires. There is also a big demand for a larger variety of tread designs and sizes to maximize the machines’ performance."

All of this is good news, especially considering some market segments are far from being able to say that. However, Sherkin’s opinion comes as an established veteran of the skid-steer market. What about a tire company that’s relatively new to the market? How does the market look to them?

"The skid-steer market is saturated with product," said Rhett Turpin, product manager of Carlisle Tire. "There appears to be two levels of product available – value and premium, with not much volume in the middle."

But whether an established or a trying-to-get-established company, there are certain indicators that each looks toward to predict what’s happening in the market. Pinning down the exact way the skid-steer market will break can be a little harder though. The wide range of tires and equipment can complicate things.

"There is no special indicator for skid-steer tires of which we are aware," said Sherkin. "Since there are such a wide variety of uses for these machines it is difficult to pinpoint. However, with more and more tire manufacturers increasing their offerings in this product segment, the dealer should be able to find the products necessary to meet the needs of his/her customer."

But even though there isn’t one particular thing to point to, there are subtle trends which can lead dealers and tiremakers in the right direction.

"When times get tougher and operating budgets get tighter, end users and owner/operators turn to basic ideas and proven products," said David Ashby, Firestone Industrial Tire’s product manager. "On skid-steer applications, we see consumers moving toward longer lasting, highly tested products with proven performance and productivity costs for greater value over the life of the tire versus looking for the lowest priced product."

Tackling the Marketplace
Much of selling skid-steer tires is knowledge. Dealers need to understand the products, the customers and the market as a whole. They must also provide superior quality and service and take care of every little detail.

However, just like any other market, some dealers seem to be able to fall right into skid-steer business, while others have to work for every single scrap. Those within the market have their "best approach" ideas.

"Dealers need to understand the product inside and out," Firestone’s Ashby said. "Not all skid-steer tires are created equal. You have to have a good understanding of offerings and performance levels of skid-steer tires available in the local market place. Some designs of skid-steer tires work differently in different regions of the country and may be designed for a variety of hard surfaces and/or soil conditions."

Dealers should also know the equipment inside and out, as well. A new model could have a different wheelbase length, horsepower or weight requirements. Of course, knowing all this is just one element of providing value to the customer.

"The success for the dealer is based on value and service," said Sherkin. "In order to provide these benefits to their customer, the dealer needs to learn about the products that are available and which products suit their customers’ needs.

"For example the needs of a farmer using a skid-steer loader as a utility machine are much different than a construction company using one at a construction site. Providing the right tire for the right application will create the confidence in your customers. It’s no different than offering the correct tire for cars, light trucks and SUVs."

Ashby agrees with Sherkin, in that knowing the correct application is just as critical in knowing the specs of the loader. "Understand the specific consumer’s application," he said. "Skid-steer loaders have hundreds of specific and unique applications, including usage on any combination of surfaces or terrain."

For dealers – and distributors – who just can’t seem to get started in the skid- steer market, Carlisle’s Turpin has a few "outside the box" ideas.

"Expand your market to local rental agencies and skid-steer dealers," he said. "Equipment rental dealers go through a lot of tires. It’s hard to guard against abuse from operators who may have little or no experience on the equipment.

"Local tire distributors may be able to offer skid-steer loader dealers advantages by buying through them, such as amount of inventory that they have to carry and variety. Skid-steer tires are hard to inventory as they take up a lot of space. This alone is often reason enough for a dealer to want to have a local source for the tires, rather than trying to carry inventory purchased through their OE programs."

Technological Advantages
One of the biggest things that could hit the skid-steer market isn’t a new tire, but a whole new track. That’s right, some loaders are coming equipped with tracks, much like on a tank. Of course, tracks aren’t high on the popularity charts yet, especially with the multiple sizes for multiple applications. But anything’s possible.

"The next big change in technology will not come from the tires themselves but from track," said Sherkin. "There’ll be more sizes and tread patterns for skid-steer tires coming on the market. But from what we see, there is a lot of work being done to develop rubber tracks as an alternative to tires. This may happen in the future, but with the large population of pneumatic-tired machines in the field this will not have much effect – if it does happen – for quite some time."

A lot of the technology involved in skid-steers is being focused on increasing productivity – making both machines and tires more useful and cost-effective. That’s precisely the way Ashby sees things.

"If there is anything to be said about the 2002, it will no doubt be called ‘The Year of Productivity.’ At work site after work site, everyone seems to be looking for improved performance on skid-steer loaders to increase vehicle productivity," he said.

"In the past, a machine was deemed underpowered if the wheels didn’t spin out on a skid steer. However, on today’s farm or work site, spinning wheels translate into lost productivity, increased work time, and reduced profit margin."

For dealers involved in the skid-steer market, there’s sales to be had. But between all the different sizes and applications, the dealer has to be on top of his game.

For Dealers, An Opportunity in Applications Unheard of a little more than 20 years ago, the skid-steer loader has become one of the most popular pieces of machinery on the market today. Like the Swiss Army Knife, loaders come in a wide variety of shapes and sizes for multiple uses and they can be found almost anywhere that work needs to be done. Skid-steer loaders are used in general construction for excavation; carrying, spreading and loading just about any kind of loose material; grading; site cleanup; demolition; recycling operations; mining; road repair and construction; landscaping; commercial agricultural operations; and snow removal. On farms, in parks, around construction sites, or in rock quarries, there are loaders made to fit almost any need. It is because of this versatility that the population of skid-steer loaders has exploded in North America. So what does this mean for tire dealers? Well, dealers sell tires and successful commercial tire dealers sell service and tire solutions. And a smart and successful commercial dealer realizes that different loader applications have different tire needs. A skid-steer loader in a paving job needs a different tire than one operating in on farm. This range of use enables tire manufacturers and marketers to offer a wide variety of tires today to meet the needs of your customers. Skid-steer tires don’t maneuver in the same manner as a regular tire, so dealers can’t expect the same kind of wear as a regular tire. With a skid-steer tire, one tire is actually working in reverse while the other is moving forward. This produces a "skidding" action – hence the name. However, the tires must withstand the wear and extra pressure on the sidewalls exerted every time a skid-steer loader turns. With the varying manufacturers and types of skid-steer tires on the market, skid-steer users are most mostly concerned with characteristics such as tread rubber compounds that extend tread life and sidewall durability and can resist snags and punctures that cause downtime. Tire life can vary dramatically from as low as 200 hours on a tough concrete pad to more than 2,000 hours in general service conditions. Even though there is a range of tire characteristics that skid-steer users should be concerned about, they usually tend to focus on price. It’s up to the dealer to understand the customer’s needs and recommend the correct tire for the application. Given the wide variety of skid-steer tires, a knowledgeable dealer can be an asset to the customer by recommending the right tire solution. Sometimes, spending more money now saves money down the road. Consumers always look for the best value for their money. It is the cost of use that counts, which is usually not the cheapest price. Dealers have been selling this way for a long time and their customers track their cost of usage – not their cost of purchase.