Are tire stores cash cows?

In My Humble Opinion
1

I live in a community that encompasses one city, two townships and a village in one school district. About 20,000 people.

Growing up we always had two small independent tire stores and one Firestone in this area. In the past 10 years, a Goodyear moved in across the street from one of the independent stores and then on the 5 miles of main drag they built an NTB, a Conrad’s and now a Discount Tire. So that is 7 places to get tires in less than 30 square miles.

These are all newly-built buildings, too. Not just moving in to abandoned space. Also none of them have gone out of business yet, not even the independents.

We’re definitely a car-based community. There’s a bus but it only takes people to and from Akron and Cleveland, not locally. Everyone has to drive to work.

We’ve got regular mechanic shops too. A Valvoline, a Midas, an Advance Auto Parts and an Auto Zone literally across the street from each other. There’s even a big Chevy dealership. And a hubcap store!

If I was going to build a business here, the last thing I would think is “I know, a tire shop!” because…well, they’ve already got 7. But they keep coming. Discount Tire was just finished this year.

So what’s the deal? Do tire shops make huge money, enough not to worry about competition? Is there some sort of tire store conspiracy?

2

A lot of “tire shops” do a lot beyond sell tires. From the ones I know, most of their income comes from other auto care services.

3

No doubt. But if they are all doing the same services, it still begs the question “why seven?”

4

Sounds like it’s just the phenomenon of similar-type stores collecting in one place. In my county and the adjacent one I can think of specific areas where there’s a miles-long stretch on one major road almost entirely by dozens of different car dealers. Where I am there’s an auto parts store on every block, and there’s places where there’s no auto parts store to be found for 20 miles.

5

True. Last time I got tires it was taking too long, so they put a finger in my butt.

6

They’re like shoe stores… For your car!

They are also good places to go in for a set of tires and walk out with a stem lube. Maybe not all places, but there have been a few times I’ve worried I didn’t remember to sign the check “chump.”

7

even if you skip the stores that push the stem lube you still have to make a choice. comfy waiting room and good coffee then become factors.

8

A common business strategy is to open a shop where the competition is doing well. Not to improve your bottom line but to stop their competitions cash cow which could give them a competitive advantage.

9

Seriously? Vinyl Turnip’s post, immediately followed by the reference to “stem lubes”, makes NO ONE else laugh?

10

Seems to be the same for mattress stores. How many can a city support? They all sell the same damn products, most of which come from the same factories, despite the brand name. Other than the high-end products like Tempur-Pedic, they’re pretty much going to last you about five years before becoming a back problem. I guess they rely on that for continued volume of sales. I’m sure sick of the TV ads. Locally, there’s one place that’s run by this big zaftig blonde woman who seems to be selling more than beds. She got run out of business a couple of years ago, but is back on the air doing the same shtick.

11

I’m sure it wasn’t a laughing matter to Vinyl Turnip.

12

Urban planner who once worked in Northeast Ohio here.

Generally, mechanical commercial uses such as auto repair, body shops, tire stores, vehicle accessory dealers, lawn equipment sales, and the like prefer locations where traffic count is high, land costs are low, and zoning and architectural design regulations are very permissive. In the Cleveland area, that generally meant such businesses agglomerated along major roads in more blue collar-leaning suburbs and exurbs - Eastlake, Madison, Garfield Heights, Brook Park, and so on. Because such businesses are often vehicle-oriented, they don’t need to be located very close to their customers.

13

Me. It made me laugh.

Here you have to pay extra for the finger in the butt but if you have the warranty they’ll pro-rate it.

14

I totally LOL’d. But, you know - I don’t have to type everything I think :wink:

ETA: And, thank you elmwood. Our design isn’t too Brookpark-permissive but it’s easy - red brick. I guess we’ve arrived!

15

I worked in a tire store right after my military training. I needed some place where I could use my mechanic skills, and they needed people who weren’t master mechanics.

We always had tons of business. We did front ends-- shocks, tie rod ends, CV boots and joints, ball joints, brakes, alignments, and changed oil. We did a lot of package deals, like if you got tires and brakes, you got a discount on the labor, because we just had to take everything apart once, and we’d throw in an oil change for free. We also did other things, like occasionally replacing starters, if someone needed that, and brakes as well. We sometimes did U-joints and differentials. Those weren’t that common, but they are things people put off, and it’s hard to put off a flat tire.

Tires bring people in, because if you don’t have a tire, you can’t go. It’s amazing how crappy a car can be, and people will be driving it. We had people whose cars had to be push started, who had holes in the floor, whose wheels wiggled around like their tie rods were made of silly putty, whose cars belched huge clouds of black smoke when we started them, brakes squealing like a baby seal, but they had to have tires.

Anyway, a lot of the time, people knew about the six other things that were seriously wrong with their car, that they had been putting of for whatever reason-- time, money, but when they had to bring it it because a tire blew, they’d want to know how much more for X, Y, and Z. They knew that as long as they were paying for the labor to take off the tire, they might as well fix the tie rod end that had been bad for six months, and maybe replace the squealing breaks, or as long as they were applying for credit, they might as well apply for $500 as $250. And since they were already taking 1/2 day off work to bring the car in, they might as well replace the other tire that was totally bald, before it cost them another 1/2 day.

As far as location, car shops are often centered around a bus hub, so it’s easy to get a bus home, or to work, and body shops are always near a car rental place, because body shops do a lot of crash repair.

Parts stores are near shops, because we run out and buy stuff, when we get an unusual model, and don’t have a part for it. There’s usually a couple of fast food places, and a coffee shop nearby, because not everyone likes to wait in the store.

Like I said, we always had more work than we could handle. There was a Goodyear about five blocks away. They probably got tons of work too.

And no, we never ripped people off. Really. I haven’t worked there in 20 years, and have no investment in this, but we were scrupulous in what we recommended to people.

16

Zoning, I’ll bet. Same reason that you find other businesses concentrated similarly.

As to whether owning a tire shop is a license to print money, I doubt it. I’m sure you make a lot of $ off each individual tire, but you still have to continually be scaring up new customers, or providing other services, since most people only need tires every 4-5 years on average.

17

Counting quick lube, tire-focused, brake/muffler, and independent mechanics, there are at least 8 shops within 1 mile of my house that advertise oil changes and generally perform most of the same services at similar price point. That’s not counting all the car dealerships, that obviously have another product but all heavily advertise their service depts. At least 5 of them perform all the services (oil/fluids, brakes, tires, mufflers…). I live in a similar population area as OP. I’m probably missing some, too.

18

I’d laugh at the entendre, but WTFS is a “stem lube”?

19

The Simpsons
Sunday, Cruddy Sunday
21-Jan-1999

Homer uses a coupon for a free tire balancing at a tire store.

After looking at the auto they say they can’t legally let him out of the store and he needs four new tires.

In the waiting room Homer talks to other customer, who says; “Hey, you got off easy. I just came in to use the phone, and they got me for the whole road king package – alignment, shocks, Armor All, stem lube …”

20

Let’s do the math. 20,000 people, figure maybe 8,000 cars. With seven tire shops the customer base averages 1,143 cars per shop. Say each car needs a set of tires every three years. You’re looking at 381 sets per shop per year.

Assume $100 per tire, so each shop is selling $152,400 worth of tires per year. Maybe they can upsell another $100 in services per car. You’re talking about $190,000 gross sales for each of those seven shops.

That’s just tires and upsells. If they’re also doing brake jobs, mufflers, oil changes, etc. to keep their tire customers, it’ll keep a few people employed.