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Dealer Diary: Commercial Crossover

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Commercial Crossover

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Dealer Name: Sparks Commercial Tire
Location: Findlay, OH
Years in Operation: 13
Number of Employees: 20
Repair Specialty: Brakes and springs
Average Number of Repair Orders per week: 105
Tire/Service Sales mix: 80 percent tires

This is the fourth installment of Tire Review’s Dealer Diary, a year-long series showcasing a typical tire dealer, his business, how he runs it, the many issues he deals with, and his thoughts on the industry in general.
This year, our Dealer Diary series, written by Managing Editor Craig Gifford, will feature two different tire dealers, alternating between one focused primarily on the retail side and another that handles mainly commercial accounts.
We’d love to hear your comments on this new series. Drop us a line using the reader feedback card in this issue, or send us an e-mail at [email protected]
This installment features Terry Sparks, owner of Sparks Commercial Tire in Findlay, Ohio.

Many independent tire dealers own multiple locations. It only makes sense because with good management and a solid business plan, more locations can translate into more profits.

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But, most of the time, when a dealer has more than one location, those shops are in the same market segment – retail dealers tend to open more retail stores, while commercial-oriented dealers stay on the "big tire" side of the market.

This pattern doesn’t always hold true. Just ask Terry Sparks.

In 1986, he purchased a commercial tire business that has thrived under his ownership. But back then, Sparks also had other plans. Namely the ownership of a retail tire store.

While a dealer that owns both commercial and retail locations isn’t unheard of, it’s also not exactly commonplace. Something that Sparks doesn’t understand.

So, in November 1989, Sparks bought a former Goodyear retail outlet located about a mile from his commercial shop. "To me, I think it makes sense to have both a retail and a commercial outlet," he said. "I think they work hand-in-hand. We try to stay strong in the community and it makes us more well-rounded to have both types of locations.

"It enhances our commercial business because we can totally take care of the customer. There was a commercial client we were trying to get and we couldn’t even get in the door. Then, one day the company’s chairman of the board was in our retail shop having his car worked on. He and I got to talking and he realized we also had a commercial location, and the door was opened."

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Because he feels that having both retail and commercial locations can greatly enhance a dealership’s name and position, the fact that Sparks eventually bought a retail location is a virtual no-brainer. But why buy a Goodyear-owned location so close to his commercial company?

The store that Sparks eventually purchased, was at one time a dual store (retail and commercial). "But they stopped selling commercial tires in 1975 and became purely retail," Sparks said. "And I’ve always been a firm believer that retail needs to stay retail."

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Not everyone seemed to feel that way. After a while, the Goodyear store Sparks eventually bought began to delve back into the commercial side of things.

"It seemed that every new store manager that came into that location decided they wanted to get into the commercial business without making an investment," said Sparks. "Goodyear was offering incentives based on total sales.

"In fact, I had one manager tell me that he didn’t care about making a profit, he just had to make the sale and that he was sorry for stepping on my toes. I got tried of that after two or three managers. I don’t mind if a location wants to be in the commercial business, but you should at least be dedicated to it."

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Since, he was already dedicated to a commercial location, Sparks decided to dedicate himself to the retail side, as well.

And, while Sparks’ retail outlet isn’t the largest ever built – it’s 8,000 square feet, has eight bays and employs nine – it is located on a main thoroughfare. An estimated 20,000 cars pass in front of the store every day.

Becoming the owner of a retail operation took a lot more than Sparks anticipated. He had to break down the barriers constructed by the former management before he saw the rewards of all the hard work.

"It was an expensive learning process, and it took a few years before we got our feet on the ground," Sparks said. "The fact that it was a company-owned store and that is basically had a ‘manager-of-the-month’ meant that we had to establish a sense of consistency and build a loyal customer base."

Like practically every shop owner, Sparks discovered that one of the hardest things was finding the right kind of help. "If a dealer is going to start a new location, you’ll have to make sure that you have your own people in house," Sparks said. "That was one of our biggest struggles. It took a while to get people in the right position."

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Both the commercial and the retail locations have a dedicated staff, but they do tend to help each other out. Tire techs and salesman can rotate between both locations as necessary. About the only thing that Sparks’ two locations don’t swap are service technicians.

And while it did take some time, a customer base has been established and Sparks’ retail operation is thriving.

Now that Sparks has played on both sides of the fence, his heart still lies on the commercial side of the tire business. But he does concede that the basic day-to-day operations of a retail shop can be easier. "From a management standpoint, the retail location is easier to handle because everything is in the house," Sparks said. "When you close the store, you’re done for the day. You don’t have to worry about those late-night calls. But from a customer base, I would rather deal with commercial customers. They’re more loyal and not unreasonable in their demands."

For the time being, Sparks isn’t actively pursuing expansion – on either the commercial or retail fronts. Collecting additional retail locations to complement his commercial shop isn’t something that he wants to get into. However, if the right opportunity came knocking, Sparks would be inclined to open the door.

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