If you’re one of the tire dealers out there who already has a reputable custom wheel business, consider yourself lucky.

Choosing to enter this market segment now is more challenging than in years past, due to a fairly heavy upfront investment, trying economic times, constantly evolving sizes and styles, and required expertise in the areas of service and TPMS.

It’s not impossible, and certainly a driven, knowledgeable dealer has a fair chance to earn profits where custom wheels are concerned. But be prepared for an uphill climb.

Changing Sales
While many dealers are still making fair profits on custom wheels, the types of sales they are dealing with have changed, forcing in-the-know dealers to adapt.

“Our sales are way up in terms of the number of custom wheels sold,” said Jason Williams, executive vice president of Jack Williams Tire Co. “But our dollars are about the same. People are buying smaller, less expensive wheels and we’ve seen the more pricey, higher-end and three-piece wheels sales decrease.”

With 26 locations in Pennsylvania, Jack Williams Tire is a trusted name in its market. The company began to focus on custom wheels five years ago, and has seen sales and profits from this segment grow each year since, Williams said.

“We have two regional stores that are larger than the average store,” he noted. “They have separate showrooms and salespeople for the custom wheel segments. We try to address this market in every store, though, by designating one person in each location as the go-to person that we train for wheels.”

Long Beach, Calif.-based Performance Plus Tire & Auto Superstore has been in the custom wheel business for 37 years, and in the process has gained a reputation for great service, a wide selection and for standing behind its products.

Owner Hank Feldman has seen many ups and downs where this market segment is concerned, and said he’s prepared to ride out the current economic lull.

“We always see these peaks and valleys,” he said. “Before last year, the wheel market had been moving along steadily. The increase in Chinese manufacturers had brought overall prices down, and that kept demand fairly strong because the product became more affordable.”

Being one of the well-known retailers in the area has helped Performance Plus Tire succeed in past economic downturns, and Feldman suspects this will be the case once again.

“Our wheel business is holding fairly steady,” he said. “When the going gets tough in this product segment, the fringe players are the ones who are affected. Most everyone sells wheels, but many dealers aren’t really focusing on it.

“When the economy suffers, all the business gravitates back to the primary players – those few retailers that are known as big wheel sellers in a given area. Even though the market has shrunk, because we’re perceived as a specialist we don’t really see much of a dropoff in our wheel sales.”

Fewer consumers today have the ability to purchase larger, more expensive packages, agreed Scott Blair, president of Wheel Works and performance editor for Tire Review. “Most of the economic issues started late last year. A number of retailers told me that the ‘selling season,’ which is usually from late January to mid-March for warmer climates, was extremely short this year,” he said.

Keeping Up
As with other aftermarket accessories, drivers see wheels as a way of staying trendy and personalizing their vehicles. As the days of large, chrome wheels appear to be fading, and tire dealers in this market must keep up with current trends in order to be successful.

Size proliferation of wheels has been a headache for dealers in recent years, as well. The key is to focus on what will sell in your area. Feldman noted today’s price-conscious consumers are generally aiming for smaller, less expensive wheels.

“The 22-inch and larger sizes are declining while 19- and 20-inch sizes seem to be holding steady,” he said. “We’re seeing increasing sales of smaller diameter wheels.”

“The proliferation of ultra short sidewalls a few years ago opened a whole new market for fitting dubs on midsized cars like Accords and HHRs,” Blair said. “I still see a lot of urban-style fitments on old Caprices and Impalas, but even this market has slowed.”

Williams said sales of factory sizes have increased dramatically, as have the popularity of painted wheels in colors like black and gunmetal.

“The styles have become more conservative and flashy wheels are dying out,” Feldman said. “Trends usually go in cycles; there are times when manufacturers come out with a lot of really wild styles, but then people get tired of them and go back to a more conservative design. We’re seeing more of that now.”

Last year, Giovanna rolled out painted wheels with different colored bezel rings that fit to the outer flange. Blair said this is a trend he expects other wheel manufacturers to follow to give consumers more design bang for their buck.

“Various types of bolt-on plastic accents have been around for decades, but this may prove to be the most effective way of getting the most usage out of a style,” he said. “Up until this, many contemporary styles only lasted about two years. We may see more designs that allow for slight variations that will give it a fresh look for several years.”

Performance Plus hasn’t heard any complaints about diminished fuel economy from the SUV applications they’ve sold in past years, but, at the same time, Feldman noted lightweight wheels are becoming increasingly popular.

“This is where better technology like forged wheels and lightweight alloys used in casting methods will prove their worth,” Blair said. “Each of these types of wheels cost more initially, but the variable cost of burning the fuel to turn them will pay the owner back relatively quickly when compared to heavier designs.”

Expert Service
One key to success in this market segment is to keep your techs up-to-date on how to service and install the components. Top of mind are issues involved with quality, safety and the latest hurdle – TPMS and their effect on custom wheels.

Keep in mind that 22-inch and larger cast wheel and tire assemblies result in huge amounts of unsprung weight, causing factory brake systems to lose stopping effectiveness, Blair said.

Another thing to keep an eye out for is any safety issue related to wheel and tire damage due to the size the customer wants on their vehicle. “For example, 20-inch wheels that require a 40 series tire or lower tend to become damaged much easier. This leads to more flats or destroyed tires on common pothole or railroad crossing type impacts,” he noted.

In the shift to TPMS compliance, most wheel manufacturers have made changes to accommodate the required sensors. There are still a few out there that are not TPMS-compatible, but this problem is easily fixed by using aftermarket adapters, Feldman said.

“It seems to be becoming less and less of an issue in terms of the fitment because suppliers recognize it as something that’s going to be on the majority of vehicles today,” he noted.

“Many wheels now have valve holes drilled to accommodate most sensors,” Blair said. “This means two valve holes in the same wheel in some cases – one for the inflation valve and the other for the sensor. There have been a number of adapters that are now available that allow valve sensors to be placed completely inside the tire. This works on some applications, but can lead to a destroyed sensor if the tire loses air completely.”

Gaining Respect
Entering the custom wheels market can be costly, especially for shops in areas where there aren’t many suppliers nearby.

“It’s a big upfront investment,” Williams said. “When you just have a catalog that you place orders through, customers who are big into wheels won’t take you very seriously. It’s important to have a lot of wheels in stock that you can physically show them and put on their vehicle that day. But doing that can be costly.”

In California, for example, entry into the market is typically less expensive because of many local suppliers and a strong demand for the product. “There’s so much product and all the suppliers are trying to move it, so it’s readily available in this market,” Feldman said. “Back east, dealers would need to have access to a distributor that can offer affordable pricing and be committed to providing the inventory.”

Gaining the trust and business of discerning customers – those enthusiasts who will spend nearly any amount to personalize their vehicles – is a must. Once you make the commitment to keep on top of trends and constantly build your knowledge base concerning this area, people will begin to get the idea.

“Reputation and word of mouth gains or loses customers in this market,” Blair said. “The aftermarket – especially the custom wheel market – is built around the lifestyles of the people who purchase these products. Cars and trucks are not just utilitarian, they are unique outward expressions that symbolize one’s personality.”

To generate a buzz, try attending local car shows, races and car club events, he noted.

“If you’re commited to giving good service,being educated on the product and educating the consumer, I think you’ve got a good chance of making it work,” Feldman said. “At the beginning you have to be willing to work on shorter profit margins just to develop a reputation. Then as you become an expert, sell yourself and the value you offer as a dealer.”