TIRE PRICING

We have a great wholesaler down the road from us. All tires are marked up 43% for a 30% profit margin.

Very competitive in my area with a tire shop being basically on every major corner. I have had okay results with just marking up $100 on four tires, or $50 on two. That includes mounting, balancing, and I add a $2 fee for tire disposal if they leave the tires with me. Some shops still install all four for what I can buy all four tires for at cost. I have no idea how.

I have an old machine and I don't mount tires fast enough to really make money over my hourly rate. I spend too much time with the wire wheel cleaning the wheels but I hate having to redo them over bead leaks.

Good luck!

Jeff,

I have spent the past 40 years providing services to other auto dealers particularly with used tires, wheels and waste tire services. Of course I tend to deal mostly with those who have found a niche and are successful in selling those items along with the related auto services. I am particularly impressed with those shops who do not bat an eye at the price they charge for tires and they always have the best used tires included in the waste tires they ask me to remove from their stores. One in particular has been a customer of mine for more than 20 years and I have seen two management changes but the business is very much the same today as it was 20 years ago. From the outside looking in it seems to me they approach the tire business from an auto repair standpoint rather than the tire shop perspective I have always known. That means to me that they are very particular about the work they perform and always put the customer first. They do not do partial work on anything and if you as a customer are trying to negotiate prices they tend to suggest other shops for the work. The shop is always full when I call on them about once a month and I get the impression that means they have people waiting to make appointments. The variety of customer vehicles runs from very old restored or classic vehicles to very late model high end luxury cars and includes a lot of everyday mid priced cars probably 5 to 10 years old. The cars all seem to be in good condition by looking at them and the tires I see coming off those that needed tires are normally taken off due to a maximum of 6 years on the date of the tires. That policy is consistent with the general impression I have of these businesses. They do not concern themselves with price on anything and simply insist on doing the best they know how to do on everything. By the way the tires I see them selling are also higher priced brand names.

Now none of that applies to those who sell tires primarily where price is everything and volume is the only way they can make enough to pay their help. That is not to say that this is not a good way to go but if your heart is in Auto Repair instead of tires I suggest you consider the previous style. Good luck, the tire business has been good for me and I am having some pangs in giving it up.

Just spoke with Kauffman Tire. Here is what they are told me:

• Deliveries 2x per day for free. Hot shot delivery for $25.
• Tires sold at the same cost their Kauffman retail stores pay. I found this hard to believe, but the numbers checked out. Kauffman has two distinct businesses ... wholesale and retail with separate business models for each.
• 20 different tire sizes will cover 85% of the vehicles on the road.

I walked into this conversation thinking that I would need to stock like the local Firestone to get decent pricing. Our Firestone keeps over 1,500 tires on hand at all times ... that's around $150k in inventory at all times. Not many shops can float that kind of cash.

However, after talking with Kauffman, it looks like getting into the tire game is easier than I thought. Keeping 2 full sets of each of the 20 sizes on hand (8 tires * 20 = 160 tires) would only cost around $20k in inventory. Going to move forward with this one.

EDIT: Attaching the tire size matrix showing the most popular sizes. Any tire supplier can give you this.

we sell tires, usually pick a good brand and offer just that (hankook) , we do not stock tires anymore , used to , but was difficult to keep up with ever changing sizes and carrying multiple brands etc. we get 2-4 deliveries a day , we sell of course based on customer need but convenience as well, car is here, needs tires, we can do NOW, you get the idea. what we charge, 23.99 M+B each tire, valve stem, service pack, extra.

tires we price like this , tire cost 87.91 lets say, multiply by 1.5 , sell for 131.86 , if tire is over 100 dollars we multiply by 1.36 102.44 x 1.36 sell for 139.31 . we make some money on tire sales and alignments of course, not record breaking BUT, the car is here, needs tires, why should we lose out on that profit?, right, we shouldnt.

we sell quite a bit of tires, the ones we loose are the ones that like costco, sams club, etc.

jeff

we sell tires, usually pick a good brand and offer just that (hankook) , we do not stock tires anymore , used to , but was difficult to keep up with ever changing sizes and carrying multiple brands etc. we get 2-4 deliveries a day , we sell of course based on customer need but convenience as well, car is here, needs tires, we can do NOW, you get the idea. what we charge, 23.99 M+B each tire, valve stem, service pack, extra. 

tires we price like this , tire cost 87.91 lets say, multiply by 1.5 , sell for 131.86 , if tire is over 100 dollars we multiply by 1.36  102.44 x 1.36 sell for 139.31 . we make some money on tire sales and alignments of course, not record breaking BUT, the car is here, needs tires, why should we lose out on that profit?, right, we shouldnt.

we sell quite a bit of tires, the ones we loose are the ones that like costco, sams club, etc. 

 

jeff

Sent from my DROID RAZR using Tapatalk 2

using the above method of tire pricing we average 60 tires a month +/- , which i dont think is too bad for a small independent shop