On Their Minds
For the past two years, Tire Review has brought you Dealer Diary, a monthly series that focuses on typical tire dealers and the ins and outs of their businesses.
Both Dave Schardt, president of The Wheel Source in Dayton, Ohio, and Barry Steinberg, owner of Direct Tire and Auto Service in Boston, have been profiled on topics ranging from hiring practices to safety.
We’d love to hear your comments on the series. Drop us a line or send us an email at [email protected].
For the past year, both Schardt and Steinberg have shared their thoughts and opinions on many of the things dealers have to contend with on a daily basis. In the final installment of this year’s Dealer Diary, both men participated in a Q&A forum that briefly touched on different aspects of the tire and wheel industry.
Each were asked the same 20 questions on topics such as the state of the industry, their personal retirement plan, what kinds of employees they look for and their views on the Internet. Each has his own unique view and their answers which follow here ®“ reflect how dealers in different markets view the same issue.
What is the greatest thing you have learned in all your years in business?
Schardt: You need to take care of the people who take care of you. By that I mean employees, customers, vendors and everyone else associated with your business.
Steinberg: I think the greatest thing I have learned in the last 32 years in this business is that if you treat your employees and clients with a great deal of honesty and passion you will more than succeed in your business and personal life.
What is the strangest thing you have encountered throughout your years in this industry?
Steinberg: I feel the strangest thing I have seen in this industry, not unlike many others, is the loss of caring by some of the manufacturers for the people who have helped them build their business the independent tire dealer. I do recognize the fact that selling to the Sears of this world would make sense to me if I were on the other side. But hey, how about the “level playing field”? We have earned it.
What would you tell someone who might be interested in getting into the tire and/or wheel business?
Schardt: Stick with selling quality brands. In the long run, the cheaper products will cost you customers and business.
Steinberg: I believe the tire business is still a great business for a young person to get into. He or she would obviously have to understand that there is a great deal of time and dedication involved in building any business and ours is no different.
Most experts believe we are in or at least heading toward ®“ a recession. How does the state of the economy impact your business?
Schardt: A lot of my business could be classified as “want” and not ®need.® A recession could really impact our business negatively. So far, the economy has only impacted the medium-priced segment. The premium products are still selling well.
Steinberg: I have always said that we are in a recession-proof business. I think, with the average age of the vehicle being over 9 years old and the fact that we are in a recession, people are going to keep their vehicles longer and, in turn, spend more money with us to fix them. Customers are going to be more price-sensitive, but they are also going to want better value and safety, which is a big issue now.
How big of a role do you think a tire dealer needs to play in the local community?
Schardt: I think any business that supports its community will reap benefits. I think that goes back to taking care of the people you want to take care of you.
Steinberg: Community involvement should account for a portion of everyone’s marketing and advertising budgets. You make your money in the bays and you create your great name on the streets of your community.
Do you feel that customers need to take a more proactive role in tire care and maintenance?
Schardt: Absolutely. Time after time we see damaged wheels and tires, as well as cars, that could have been corrected with a little maintenance.
Steinberg: Ford and Firestone can’t take all the blame. All the public does is change their oil. Our industry should have done as good a job promoting tire pressure and safety as Jiffy Lube did with oil changes and I bet the recall may never have happened.
What are some things you’d like to change about your primary supplier?
Schardt: Better control of Grey Market product. We come up against more and more Grey Market product that is sold much cheaper than we can possibly sell it for sometimes below our cost. The end user doesn’t know the difference and our business is hindered, as well as our reputation.
Steinberg: My primary suppliers Toyo, Cooper, Falken, Pirelli and Vredestein ®“ do a great job and treat us wonderfully. If I could request one thing of the industry, it would be to reduce our SKUs and maybe ask the retailers and wholesalers what products we really need and want. Price is important, but having the right tire for the customer is a lot more important than having the newest, flashiest product. Keep it simple guys, this is only the tire business.
What do you plan to do with your business once you decide it’s time to “hang it up”?
Schardt: My business is still quite young, and I must say I haven’t thought about it too much. I guess I would like to see it taken over by my employees.
Steinberg: What to do with one’s business at the time of retirement is probably one of the toughest questions. I would consider selling as long as the buyers would share my business practices with regards to employees and customers. I have spent 27 years building a brand and I take great pride in what we have produced. I would also consider selling it to my key people if they were interested. Time will tell. I am 56 years old and I have a lot left to give.
What kind of people do you look for when hiring new employees?
Schardt: I look for people who are willing to do whatever it takes to get the job done. In other words, I look for “team players.”
Steinberg: I look for people who are looking for a career and not just a job. I try to find people who have long-term plans and are looking for Direct Tire to be part of those plans. I am a firm believer in the Good Apple/Bad Apple Theory. A person must fit into our organization and learn to be a part of our family.
Talk about some pros and cons when it comes to tire/wheel packages. Why should dealers handle with them?
Schardt: Tire and wheel packages are a great way to increase sales because you are making two sales instead of one. You can also dramatically improve the aesthetics of a vehicle with a plus-size application.
Steinberg: We are in the tire and wheel business. All of us should realize there are great profit opportunities and every customer with a hot setup is a billboard for your business. It takes some training, some equipment and some inventory, but don’t not do tires and wheels because you’re afraid of it. Learn about it. The Internet is full of information and so are your suppliers.
Should dealers be working to sell these packages instead of tires and wheels individually, or does their market really dictate what’s best for the dealer to do?
Steinberg: You and your sales staff have to be able to read the customer to see if he or she is a tire and wheel customer. Some people want the look, some the performance and some want both.
How do you think the Internet can help/hinder the average tire dealer?
Schardt: The Internet can help the dealer by supplying information on his own and his competitors’ products and services. It can be used as an extension of your business and a way to get new customers and leads. On the other hand, the Internet has made it easier for customers to get information. But a lot of that information is wrong. There are also a lot of Internet sites selling wheels and tires at significantly lower prices, making it harder and harder to cover your overhead.
Steinberg: The Internet is a great tool for both buying and selling. It is here to stay, so either get with it or you will be left behind.
Do you try and stay on top of industry news or do you simply take what comes your way?
Schardt: I try and stay on top of the news by reading the trade journals we get every month.
Steinberg: I am on the Internet everyday checking all the available news from our industry. You would be surprised, but there is a lot more information out there than just Firestone and Ford.
If you had the ability to address the industry as a whole, what would you say to it?
Steinberg: Don’t be afraid to make a profit. Members of our industry are so afraid of losing a sale that all they know is price-price-price. We must learn to justify our pricing to our customers by educating them about what services we are providing and the quality of work we are performing. Look for customers, not consumers.
Both of you attend the SEMA/ITE show in Las Vegas. What, if anything, do you feel you get out of attending that show, or trade shows in general?
Schardt: It’s a great way to see all of your vendors and any new products as well as the competition. Trade shows keep you on top of what’s going on.
Steinberg: I always look forward to the SEMA/ITE shows to not only see new products and equipment, but to see old friends. I also try to attend as many of the seminars as possible.
What kind of value do you see in being a member of an industry association?
Schardt: Associations like SEMA and TANA are great places to get sources of information. They’re also a way you can help support your industry.
Steinberg: I feel involvement in the associations of our industry can only bring me closer to being the most successful I can be.
What is this industry’s biggest asset?
Schardt: The people. Since I have been in business, I have met a lot of great people who are always willing to help and offer advice. We all have one thing in common and that’s our love of the automobile.
Steinberg: The industry’s biggest asset is that we build a great product. It is the best it has ever been.
What is the biggest problem with this industry?
Schardt: In my opinion, there’s too much product in the market, especially wheels. Manufacturers are dumping product everywhere, sometimes directly to the retail customer, making it tough to sell inventory at regular pricing.
Steinberg: Our problem is that we don’t know how to get a decent price from our goods and services.
What is the greatest test that faces this industry in the years to come?
Schardt: Getting a fair price for products so everyone can survive. With offshore, as well as domestic, companies cutting prices and selling to the discount mail-order houses and even direct to the public in some cases ®“ it’s hard to remain competitive and still make a profit.
Steinberg: Competing with our suppliers is going to be a major challenge in the future.
Where do you see this industry going in the future?
Schardt: This industry will continue to grow. Consumers will continue to want new sizes of wheels and tires. We were told 23-inch tires were the limit, but I know of three wheel and two tire manufacturers releasing 24-inch product at SEMA. The aftermarket provides new and exciting things that the OE manufacturers will never do.
Steinberg: I see more consolidations in the future and a tremendous amount of over capacity. The fewer players there are, the more risk the small dealer has of being a meaningful player to the manufacturers. I think the industry thinks it needs to bring its product to the public through the Home Depots and the Walmarts. I believe John Q. Public really wants to deal with the independents. Time will tell.
Tire Review is greatly appreciative of both Barry and Dave and their respective staffs for their involvement, openness, support and insight in providing (and putting up with) the interviews and material for the Dealer Diary Series. We wish everyone associated with Direct Tire and Auto Service and The Wheel Source nothing but the best. Eds.