Lawn and garden tires offer a good diversification strategy for tire dealers ®“ who learn about the market first
What could be better than the smell of freshly cut grass in the springtime? How about the sound of your cash register racking up another sale?
Many say lawn and garden specialty tires offer tire dealers higher margins than traditional passenger tires, are relatively inexpensive to carry and offer new profit potential. So, why not jump at this opportunity? What could possibly go wrong?
Not much ®“ if you do it right, says Patrick D’Auria, marketing manager with specialty tiremaker Duro Tire, based in Springboro, Ohio. There are real benefits to stocking a few dozen of each size, he says. "I’m not talking hundreds of tires; just having the most popular sizes and styles would be helpful."
Potential customers for lawn and garden tires include golf courses, lawn-maintenance contractors, parks, local municipalities and schools, and consumers.
According to David Bender, product manager for lawn and garden and golf tires and wheels for Carlisle Tire & Wheel Co. (Aiken, S.C.), the most popular front-tire size for riding lawn mowers is 15×600-6 on a six-inch rim. For rear tires, the most popular sizes are 20×800-8, 20×1000-8 and 18×950-8. "Dealers should carry all of the popular sizes and a couple of tread designs," says Bender.
Ross Kogel Jr., director of marketing for Tire Wholesalers Co. in Troy, Mich., says, "A point-of sale display will often trigger a customer’s memory that he or she needs lawn and garden tires. Over time, your business can become known as a place to buy some of the ‘oddball’ tires that local companies and consumers need. Most compelling, lawn and garden tires often command higher gross margins than traditional passenger and light truck tires."
Often, with these so-called "oddball" tires, consumers are not as concerned with price as they are with availability. So, just having a few in stock could impress your existing customers and perhaps earn you new ones.
Duro Tire’s D’Auria says that lawn and garden tires typically don’t take up much space in the storeroom. "When we ship them, we bind and compress them so they take up minimal space," he notes. And, they are relatively inexpensive units to purchase at the wholesale level, he adds.
Carl Miller, sales manager for Monitor Manufacturing, a subsidiary of specialty tire manufacturer Kenda, feels that dealers considering carrying lawn and garden tires should target primarily the commercial ®“ not consumer ®“ market.
"The commercial turf market is an area where growth has been fairly constant over the past several years," he says. "With more dual family incomes and longer work hours, people are contracting their yard work to commercial lawn-care companies."
Of course, to serve this segment effectively, a dealer needs to become familiar with standard sizes for commercial mowers and local market demand. "Dealers should learn about the commercial turf industry," says Miller. "The tires used are four-ply rated and higher. These tires also have a higher rubber-to-void ratio than the standard residential turf tire, which helps with puncture resistance. The standard two-ply rated residential turf tires on the shelf at Wal-Mart and Home Depot generally are not in demand at the dealer level."
A Word to the Wise
Any new business venture, no matter how inexpensive the startup costs and attractive the profit potential, deserves careful consideration. The same rule applies to getting into the lawn and garden segment.
First, it’s wise to keep in mind that this market is extremely seasonal, particularly in the Northern half of the U.S., according to Kogel.
So, these tires sell only during specific months of the year. What’s wrong with that? For starters, seasonal products are more challenging to plan for and inventory. Even though these tires take up little space, any product collecting dust in your storeroom does nothing but drain profits and waste space.
You can choose to analyze the market in your area and plan your procurement around its particular trends. Or, you can try a somewhat simpler approach. To avoid the complex inventory planning and forecasting that accompanies the specialty tire business, some dealers are passing that responsibility on to their wholesalers.
Carlisle is primarily a two-stage distribution business, according to Bender. The company sells product to wholesalers, which then service tire dealers. "If a dealer is associated with a wholesaler that stocks this product, the dealer can usually get the units within a day or two," says Bender. Under this strategy, the wholesaler supplies specialty tires to the dealer on a just-in-time (JIT) basis, and the dealer holds no inventory.
The lesson here if you’re a wholesaler: If you’re not already carrying this niche product, you may want to consider it. "A dealer does not want to overstock or stock the wrong sizes and hold inventory for the following season," says Kenda’s Miller. The solution is to be a supplier that can deliver product to dealers at the right time, right when it’s needed.
Some wholesalers take on even more when it comes to the specialty tire market. "In most markets, there is a wholesaler that will offer lawn and garden tires, and most will provide training, education and reading materials about entering the lawn and garden market," says Kogel. "Some wholesalers will arrange classes or ‘sit downs’ with their manufacturer representatives and the customer. This will help the dealer learn about the products and marketing methods in a short period of time," he claims.
If you’ve explored the lawn and garden market in your area and concluded that you want to go green, it’s time to take some initial steps.
First, decide if you are going to have the product in stock or order it JIT from a wholesaler.
Then, let customers know you offer lawn and garden tires through point-of-sale displays and racks, flyers, mailings, posters and newspaper ads. Bender recommends sending promos to local turf-care companies and nurturing relationships with gated communities and commercial lawn-care companies.
Dealers also need to research local competition to ensure the market is not already saturated. Then, they need to educate themselves about the product so they can sell its features and benefits, advises Miller.
"Just like passenger tires, there are different grades of turf tires," he explains. For example, "one of our premium tires has 60% rubber on the contact surface for puncture resistance and siped lugging for excellent traction on wet or dry surfaces," he says.
Also, it’s wise for dealers to keep geography in mind. "There is probably more of a market for turf tires in the Southeast U.S. than in the Southwest," Miller says.
The key to success, according to Kogel, is appointing a dedicated individual at the dealership who is thoroughly knowledgeable about the lawn and garden market. "The specifics of the business, from applications to correct ply ratings, tread design to understanding the equipment for which each tire is made, are critical areas of knowledge," he insists.
D’Auria recommends dealers survey their customers to find out the most popular tire sizes, front and rear. "Start by carrying some tubes and tires and look into tire sealants and foam-fill service," he suggests.
As far as equipment needed to service these tires, D’Auria says mounting and demounting can be done with simple, fairly inexpensive hand tools. "Contact the tire manufacturer to find out recommendations for load ranges and inflation," he adds.
Though it won’t rival their consumer tire business, the lawn and garden segment can be a good profit generator for many dealers, says Bender. It’s a matter of sizing up the landscape and then going for it.