Profit Handbook

Get Some Wheel Salvation

Picture this scenario: Sometime during the process of dismounting, servicing and mounting a tire, the customer’s expensive custom wheel gets seriously damaged. Or this scenario: The wheel comes in damaged, unbeknownst to the customer.

Every tire dealer has lived at least one of these situations in the past. And maybe all too frequently. Damaged wheels – custom aftermarket or OE wheels – can cause a big problem. And take a big divot out of a dealer’s bottom line.

Let’s face it, wheels aren’t cheap – especially if the dealer has caused any of the damage.

In the past, there really weren’t a lot of options available to resolve the problem. There was little choice but to replace the wheel, but finding an exact match – especially with some OE wheels – was quite difficult.

Car dealerships don’t carry OE wheels. Scrap yards are inconsistent in both quantity and quality. Special ordering them from the factory took at least half a dozen phone calls, and a good, long wait if placing the order was successful. If they were aftermarket custom wheels, you often had to pray the supplier could still lay his hands on that particular model and size.

But what if there was a way to trade a damaged wheel for a new one, or have the damaged wheel repaired within a few days? At a fraction of the cost of a new wheel?

One company that performs such a function is Keystone Automotive Industries. Keystone specializes in the collision repair parts industry, supplying remanufactured parts to repair shops. But after noticing a clear need for some sort of wheel exchange program, the company decided to delve into the remanufactured wheel market.

"Most dealerships’ parts departments don’t carry wheels in stock," said Mitch Nunes, general manager of Coast to Coast Wheels, a subsidiary of Keystone in Tampa, Fla. "A tire store could deal with a hubcap vendor or salvage yard to get wheels. But mostly, a damaged wheel was a customer relations nightmare."

Coast to Coast was around at the genesis of Keystone’s innovative wheel exchange program and currently functions as part of its entire system that reaches tire dealers across the country. Originally founded in February 1989, Coast to Coast was first noticed by Keystone at a trade show in the early 1990s.

"Chris Northup (vice president of sales and marketing for Keystone) saw my trade show booth at the International Autobody Congress and Exposition in Atlanta," said Nunes. "A few years later, Keystone acquired a small wheel company that remanufactured alloy wheels. Then in February 1998, they bought us.

"Keystone thought it would be a good product to have remanufactured wheels. And if you have a good product, you have to be concerned about supply. And we were, basically, part of the wheel exchange program in its infancy."

Currently, Keystone only deals with alloy wheels in its exchange program. But that will soon be changing.

"Coast to Coast was bought to enhance the program because we did hubcaps and wheels," Nunes said. "Keystone wanted to add wheel covers to the program, and now we’re going to expand to steel wheels and wheel covers."

Finding someplace that deals in wheels and covers can save a dealer a lot of time – not to mention money. While dealers don’t want to see any damaged wheels, the ability to track down a replacement quickly should be a comforting thought.

"Keystone’s program provides three key options for a tire dealer," said Nunes. "The first is a reduced expense to the dealer due to employee error. The second is an add-on sale. Sometimes customers are missing a hubcap or have a bent wheel. And the third option is to provide better customer service."

Finding a wheel in the Keystone system is a fairly easy process. There are over 100 locations – like Coast to Coast – across the country, along with nine wheel refurbishing plants.

Every wheel handled by Keystone’s network is carefully inspected, repaired to the highest standards, and is recoated and/or polished as required to bring it back to like-new condition. In fact, it’s quite hard to tell the difference between a Keystone-refurbished wheel and a new one.

That means tire dealers can be assured that the exchange wheels they obtain will be high quality across the board.

"My primary customers are salvage yards and tire stores," said Nunes, who inventories some 20,000 wheels in various conditions at his warehouse. "When a customer calls me with a damaged wheel, if we have a good wheel, then we trade it to them. If we don’t have a good wheel, we pick up the damaged one, repair it and try to get it back in three days."

But not every wheel is eligible for repair. Wheels that are too cracked or missing pieces of metal don’t make the cut and are scrapped. "If the wheel is non-repairable – if it’s outside the limits we’ve set – then we try and pull inventory from another location," Nunes said.

Replacement of most wheels will run the dealer $125, the standard exchange fee. Exotic wheels will run more. Geographic coverage isn’t even a concern, as Keystone and locations like Coast to Coast can get wheels to dealers expeditiously.

"We cover the United States. We’re as close as an 800 number and a UPS truck," Nunes said. "The customer chooses how we send it, so if the car is unusable until the wheel gets there, we can send it overnight or next day."

Coast to Coast moves between 500 and 700 wheels a week to both customers and other Keystone locations. In contrast, the entire Keystone network exchanges and repairs more than 3,700 wheels per week.

As an affordable alternative for a dealer, Keystone could greatly reduce the downtime involved in replacing just one wheel. And making customers happy – especially if you caused the problem – can always be profitable.