Like many in the industry, Matt Mevert says he always had the perception that notoriously low-margin work—particularly tire sales—was a mistake. And for the first 10 years, that’s exactly how Mevert ran his shop, Mevert Automotive in Steeleville, Ill.
“We were of the old-school mentality where you tried not to do oil changes because they weren’t profitable,” he says.
According to Ratchet+Wrench’s 2016 Shop Performance Survey, Mevert isn’t alone: While the majority of shops said they do offer tire services to customers, 57 percent of all respondents said that tire sales account for less than 5 percent of their overall sales volume.
But as the years went on and sales either crept up or remained stagnant, Mevert says he slowly realized that sending that type of work away was keeping him from growing his business.
“This was around that same time that the maintenance needs and intervals started getting progressively longer because cars were being built better,” he says. “That was resulting in less visits by our current customer base. If we didn’t take some sort of action, our sales would continue to decline.”
That’s why, in 2007, Mevert decided to take a hard look at his $450,000-a-year business and begin making changes to the work he performed in-house, starting with one of the services he most frequently turned away—tire sales.
Mevert’s background is similar to that of many in the industry: After getting out of the Air Force, Mevert started his business as a one-man, one-bay operation in the back of his father’s welding shop in 1993. As the business slowly grew over the years, he added staff and moved into a smaller version of his current facility. By 2007, his sales were at a modest $450,000 with four employees, which is when Mevert decided to hire a business coach and figure out a way to jumpstart sales.
By preferring not to perform some services, Mevert says the shop was frequently sending work away. In particular, tires were one of the services that the shop saw multiple times a week but didn’t choose to work on. However, as he spoke with his business coach and learned more about the work, he realized he was potentially missing out on a big sales opportunity.
“We knew we were referring a lot of our customers to other shops when they needed tires. Those shops were getting to do some of the other sales opportunities that come with inspecting vehicles with the tires off,” he says. “It seems regardless of how sophisticated and technically advanced the cars get, they’re going to continue to wear tires out.”
Ultimately, Mevert says his shop’s goal is to be a one-stop shop for customers. That meant looking to keep more services in-house and not giving customers the opportunity to test out other shops.
“We decided, let’s add tires and also start a process of inspecting for other opportunities that could be necessary when we’re doing the tires and see if we can fill this void,” he says. “The big benefit for the shop is that opportunity to look at their brakes and their suspension that come with putting on the tires and asking for those opportunities if there’s a need on the vehicles.”
1. Equipment investment. Mevert wanted to start on a smaller scale, and while he already had an alignment machine, he purchased a used tire balance and tire mounting machine, which cost $5,000. He says it’s easy to purchase used equipment at auctions for shops and dealerships going out of business, but he worked with Hunter Engineering to find the used equipment within his budget. This ensured that the equipment was reputable and up to the performance standards necessary.
2. Shop space. Mevert says that staffing and space are other considerations that he took into account. While he did not initially add staff, he did rearrange the shop floor to accommodate the extra equipment. He cut a wall to create another overhead door and bay on the shop floor, which is where all of the alignments and tire-related services are performed.
3. Finding a supplier. Besides the equipment investment, Mevert says finding the right supplier who can quickly and reliably get you any tire you need is key. This is especially important because given the wide variety of tire sizes utilized by OEMs, he says it’s virtually impossible to keep everything needed in inventory.
“Once you say to your customers that you’re going to start providing tires, you want to be able to follow through with that,” he says. “You want to get them tires efficiently and if not that same day, then within a 24-hour period.”
Mevert looked for a main supplier that was reliable, could consistently deliver tires at the same time every day, and that had a large inventory. He says that price was also a factor, but he was sure to keep in mind any benefits aside from pricing, such as warranty, customer service and defective product procedures. He says that he also looked for a good, interactive website that allows him to see what’s available, price accurately and order on the website. Ultimately, Mevert went with one main supplier and two backup suppliers, and he also became involved with the Michelin MAST program, which has benefits for both the shop and the customer.
4. Training. One of the benefits of the MAST program is significant online training, which Mevert’s staff has taken part in, beyond off-site training to which he also sent them.
“We’ll schedule regular courses with our service advisors to stay up to date and current and in good standing being able to sell the latest tires and the latest techniques of selling tires,” he says. “One of the big things Michelin likes to have you do is make sure you’re fully aware of how their warranty and promise plan works. By having the advisors take those courses and take them more than once and take tests/quizzes following that, it definitely trains them so they’re good and educated when they’re talking to the customer.”
The most important training that occurred, however, was implementing a thorough inspection process in the front and back of the shop. Mevert created an inspection sheet that he explained to his technicians that must be performed on every vehicle, including those needing tires, and that the service advisors must communicate to customers.
5. Marketing to customers. Mevert used email, pay-per-click and social media marketing to advertise the new offering to his customers. He also created premium packages that included things like road hazard protection or free tire rotations to provide more value to customers and more profitable work for the shop.
“If you can package that in, now it becomes a lot more profitable work than what we would’ve had if we just sold four tires to the customer,” he says.
Mevert says that thanks to his careful planning, he saw almost immediate growth in tire sales. His shop now does $140,000 in tire sales each year, 20 percent of the shop’s $700,000 annual revenue. In addition, the average repair order has increased from $150 to $350. Two years in, Mevert added a general service technician and another service advisor to help with the increased volume.
When it came to the equipment, Mevert says it took roughly 2.5 years to recoup the cost of the initial equipment investment, and he eventually upgraded his alignment, mount and balance machines, and purchased a second mounting machine. That investment took an additional two years to recoup.
Mevert says that adding tire sales has been a crucial step to doubling his shop’s revenue—and significantly cutting down on work he previously sent away.
“There isn’t a lot of margin in tires by themselves, but the service opportunities that they present, that’s what makes it work,” he says. “You want to market your shop as the go-to place for good quality tires and timely installation. That’s a big key. The other key is the whole process of the inspection and having it in place to find that other work.”