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The New Guy

The wheel and tyre industry any good?

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Hello.

 

I have a relative that is interested in opening up a wheel and tyre place but without any experience in the field at all. He says it seems pretty easy, but I have a feeling there's more involved in it than just what's on the surface.

I've been trying to tell him to do more research into it before investing such a big amount of money into something he had no experience yet.

 

Can I ask if anyone here who had or know of anyone in this field of employment to give me some insight as to how this sort of business operate?

 

Thanks.

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Lol, how can you start up, and run a business you know nothing about?

 

My thought also, but the guy has money lol.

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I had a group of friends start up a tyre shop a few years ago... very little money in it + It's so expensive to get rid of old tyres these days. They are no longer in business.

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There's no money in wheels and tires, especially when you shop around the net for a good price.

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There's no money in wheels and tires, especially when you shop around the net for a good price.

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There's no money in wheels and tires, especially when you shop around the net for a good price.

 

My local Tyre Power fits BYO tires for $25 per rim because of the sale that they miss out on. This should be a pretty good indicator of the small profit margin you'd get from running one of these places.

 

Your relative might be better off looking into an established tire ship franchise possibly.

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I had a group of friends start up a tyre shop a few years ago... very little money in it + It's so expensive to get rid of old tyres these days. They are no longer in business.

 

What a shame, I guess it's a tough industry to be in when people are real tight these days about spending any money on their car/transportation. I hope they they aren't bankrupt.

 

 

 

There's no money in wheels and tires, especially when you shop around the net for a good price.

 

I'm immediately reminded of TireRack and St George tyre on eBay.

 

 

There's no money in wheels and tires, especially when you shop around the net for a good price.

 

My local Tyre Power fits BYO tires for $25 per rim because of the sale that they miss out on. This should be a pretty good indicator of the small profit margin you'd get from running one of these places.

 

Your relative might be better off looking into an established tire ship franchise possibly.

 

 

That's not much at all is it. I would imagine if someone was to franchise lets say Bridgestone or any other big names then the outlay would be something like 250-300k, then it would take quite a while to make back the margin assuming the business is viable.

 

Anyway good stuff fellas, at least I can now go and tell him to open a brothel instead LOL.

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A lot of tyre shops don't just sell tyres.

 

They do wheel alignments, RWCs, and services too.

 

While it may be marketed as a tyre shop, it's not the core income generator.

 

As mentoned, you're better off buying a franchise, run it for 5 years or whatever, flog it off once it's eastablished, then take what you've learned and set your own shop up.

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If it was something like heasmans then there'd be money in it. The average tyre place that fits, balances and supplies tyres and does 'wheel alignments' isn't going to make much money. The only way to make money it seems is to offer professional services, but that's not something you can really just buy into. Basic tyre places offer basic service and cannot justify having a big margin. A professional place who can do proper setups, advice, rebuilds etc. can justify a higher price/margin as they're offering something extra above the basic. That's the way I see it anyway

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At the top of this page is a banner add for tyresales.com.au Says it all, really.

 

.

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I don't think online sales is a consideration for the vast majority of car owners. Our demographic (young, internet savvy car enthusiasts) might shop that way, but none of my parents, grandparents, siblings, workmates, etc would bother. It's an extra hassle in having to purchase, ship, collect, find a shop to fit them, etc versus just dropping your car off somewhere. I'll purchase specialty slicks and semi-slicks that aren't available locally online, but when it comes to tyres for my daily drivers or work vehicles, local is barely any more expensive and a lot simpler.

 

If I was to purchase a wheel and tyres shop it'd be an established business with existing retail and trade customers. A lot less risk and a more immediate return.

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If it was something like heasmans then there'd be money in it. The average tyre place that fits, balances and supplies tyres and does 'wheel alignments' isn't going to make much money. The only way to make money it seems is to offer professional services, but that's not something you can really just buy into. Basic tyre places offer basic service and cannot justify having a big margin. A professional place who can do proper setups, advice, rebuilds etc. can justify a higher price/margin as they're offering something extra above the basic. That's the way I see it anyway

 

Yeah, but Ma and Pa Kettle aren't going to book their Camry in for a $200 wheel alignment, because the shop needs to make it's money back on the $40,000 4-head laser setup. All the majority care about is the car driving relatively straight, and doesn't chew tyres out, which can be achieved on much cheaper equipment that allows the shop to keep it's prices competitive. Tyre shops concentrate on volume and up-selling.

 

Heasmans is a whole other thing altogether, aiming at a different market.

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That's what I mean. You can't charge heaps to the majority of the market, so you've gotta go with low price, which means low margin. So if you want a high margin you need to offer high value service at a high price.

 

So unless they plan on becoming a heasmans style business very quickly, there won't be money in it

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Wheel and tyre stores are in such a competitive market now that profits really have come down an all time low, and they will slowly continue a decline as time goes on..

 

The older generation of drivers who actually go to a tire store instead of eBay will begin to drive less and less, Newer tyres now do last alot longer if your not buying LingLongs, A tire machine can be had for about $1500-2000 now a days so multiple workshops now also do own them..

Dealerships also have tire machines aswell now so with people purchasing new cars that also removes people having to go to a Tire place for tires and they can be changed at a service interval aswell..

 

I know the tire shop across from my work even works on a Saturday till 5-6PM, Sunday till 1 so it sure as hell is busy but they are on a prime main road location and have been around for 20+ years so you have this massive build up of friends/family/customers who will keep coming back..

 

The other tire shops on my same road with ample publicity barely get as many cars..

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Some the information here are very informative fellas. I'm sorry if I can't add anything more to the discussion as I don't know much about this stuff so I'm just reading what ever you guys are telling me and learn from there.

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if you knew what tyre places pay for tyres from wholesalers you would prob change your mind most tyres have a mark up of at least 100% if you can keep costs low there is plenty of money to be made

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Don't forget things like lease companies and what not ( everyone has a work car now days)

that will take 60 days to pay you. So you have bought the tyres, done a balance and fitment.

wheel alignment and sent the car out. all done on the first of June. they have issued you an

order number and you have sent the invoice. now the bill cycle means at the end of June they

have 30 days to pay. admittedly you will also have a similar time to pay for the tyres from your

supplier, but none of your workers are willing to wait 60 days to be paid for their work.

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Don't forget things like lease companies and what not ( everyone has a work car now days)

that will take 60 days to pay you. So you have bought the tyres, done a balance and fitment.

wheel alignment and sent the car out. all done on the first of June. they have issued you an

order number and you have sent the invoice. now the bill cycle means at the end of June they

have 30 days to pay. admittedly you will also have a similar time to pay for the tyres from your

supplier, but none of your workers are willing to wait 60 days to be paid for their work.

 

That's where cashflow is important.

 

You will and should still have enough work coming in to cover this.

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There's no money in wheels and tires, especially when you shop around the net for a good price.

 

My local Tyre Power fits BYO tires for $25 per rim because of the sale that they miss out on. This should be a pretty good indicator of the small profit margin you'd get from running one of these places.

 

Your relative might be better off looking into an established tire ship franchise possibly.

 

Have you ever put a tyre on a wheel? Normal size tyre on a normal wheel (ie anything that isn't stretched), Takes all of 5 mins tops. Not bad for 5 mins work.

 

Tbh, If you can market tyres and wheels but have other areas for more income (ie: RWC, Light Repairs, Wheel repairs etc) Then it could be feasible. This day and age, Even the big companies like Bob Janes and such are running at a loss; How do they stay afloat? They are Australia wide companies, They are everywhere. One shop will run in negatives 2-3 days a week, Doesn't mean jack shit because the other 300 stores might be running in positives. Its like the stock market for the likes of Bob Jane and that.

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Many of the Bob Janes stores are franchises, so if they're running at a loss the Head Office isn't going to save them, they'll go bankrupt.

 

Something like KMart Tyre and Auto could absorb losses though.

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Yes, but again they don't just rely on selling tyres.

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If it was me owning a tyre shop, I know what I would do to keep business running. I'd make sure that the road ahead are full of nails hahaha. It's a joke just incase sensitive people here complain, but this is the sort of shit that happens in other less developed countries. Happened to me when I was riding me scooter on holiday and had a puncture at the same place a couple of times before I realised the shop down the road did it to get business hahaha.

 

So more or less getting back to the subject, you have to diversify the business in order to be profitable these days, as you want the customers to always come back to you because of convenience. You would want to cover all basis, but the situation with this is that you would have a lot of overhead to pay since most people these days aren't willing to stretch themselves for the company so it leaves the employer the too many staff to pay if things goes bad.

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every full price set (4 tyres) sold with balance, alignment gets

a free bikini Girl car wash. (hot girls works best)

 

have shop out of town and a burnout pad in the back where for

the mere price of $25, they can go and do a burnout.

after 6pm your liquor licence comes into effect

 

Profit

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