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Mergers and Acquisitions

Dealing with disruptive forces

TIRE WORLD’S MIKE CAROGLANIAN WISHES HE HAD MORE LEVERAGE

By Bob Ulrich

Despite his business success, Mike Caroglanian has his the tires. So many of the retailers out there are matching the car concerns. As the owner of Tire World Wholesale LLC dealers’ selling price to get the tire sales. Some of the dealers and two retail stores doing business as Tire World I know even mount and balance the tires at cost to get those Auto Centers in the Metro Washington, D.C., area, he customers into their stores. faces disruptive forces sometimes beyond his control. “We’ll never be able to put up 500 stores in my life,” he said.

“It’s getting harder to have the fun,” he “We can compete with anybody for service, says. “It’s not as easy, but that’s fine. You and we can out-service most of the local get up and work every day. It’s a challenge retailers. But if we can’t get customers and that’s great. It keeps you moving and in the door because the chains are able motivated and your juices flowing.” to leverage their advertising dollars and

I asked Mike what his biggest concerns leverage their buying power on everything, were as an independent tire dealer. He that’s a concern.” listed two off the top of his head. I asked him if online tire selling was a

“We’re most concerned about technolconcern. He said yes. And no. ogy in vehicles and being able to have the “Simple Tire, Discount Tire, Tire equipment to keep up with repairing them,” Rack, all these online sellers again have he said. “There’s so much technology. We the leverage,” said Caroglanian. “So do the have to have a computer to put a light tire manufacturers. They say they’re our bulb in on an Audi, and we don’t have that “We have 70 employees, and I worry about partners, and they want to be our partners, computer. It has to go to a car dealership. them,” says Caroglanian. “Every day we but they’re competing against us online. I

One light bulb.” have to wake up and figure out how we can compete to pay everybody wages and benthink the problem with the manufacturers

Then there is the technology that hybrid efits they deserve and keep them working.” is technology is advancing so fast, they’re and autonomous vehicles are bringing into trying to get a handle on what to do.” the aftermarket. Caroglanian said he joined Goodyear’s online sales program

“My concern is the manufacturers will design the vehicles as a preferred installer because the good outweighed the bad. so they can get them back, so they have a captured audience “It’s a choice, and you don’t have to do it, but we felt we had to for future business.” be on the program. We’re getting our own goodyear.com orders.

Chains stores are number two on his list. And he is referring to more than the big-box stores like Sam’s Club, Costco and Walmart.

“The Pep Boys, Mavis, Discount Tire stores are all moving to our area. I see them moving in all over the country and getting bigger. They’re leveraging their ability to have better buying power. If you have three or four stores like we do, you can’t outleverage someone who can say, ‘I want to buy $5 million worth of tires’ when I’m buying $500,000 worth of tires from the same manufacturer. They’re going to get the buying power.

“Then they’re able to use that buying power to advertise. At the end of the day, the tires might sell for the same price, but our competitors either have better margins or are getting their name out there with the extra money they make on the tires by buying them right.

“It’s all about leverage. The car dealers are not only leveraging the technology, but also selling tires at an aggressive price. That’s their game. They want the tires that we used to sell coming to them, and the mechanical work that comes with it.

“We used to get the gravy, the brakes and everything because we did the tires. Now they’re getting it because they’re getting There haven’t been that many, but we’re getting them. At least the customer is coming to us and not going somewhere else.”

He also receives help from Bridgestone Americas Inc.’s TireConnect online sales platform, which sends customers to his website to set up an appointment.

“Tire pricing is as competitive as it’s ever been,” he said. “It’s so competitive I can’t believe it could get even more competitive! But I think the manufacturers are trying to slow the competition down online and raise the price to try to help us make some money in the brick-and-mortar world.”

Has Caroglanian ever considered selling his business? “Not really,” he said.

“I love working. I love being part of the game. I love the customer interaction. I’m at a point where I just want to keep going a couple more years and re-evaluate then, depending what the market’s doing.”

Despite the disruptions, it sounds to me like he’s still having a lot of fun.