Editorial
Dealing with disruptive forces TIRE WORLD’S MIKE CAROGLANIAN WISHES HE HAD MORE LEVERAGE By
Bob Ulrich
D
espite 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 have to wake up and figure out how we can One light bulb.” compete to pay everybody wages and ben- think 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 There haven’t been that many, but we’re getting them. At least the more than the big-box stores like Sam’s Club, Costco and Walmart. customer is coming to us and not going somewhere else.” “The Pep Boys, Mavis, Discount Tire stores are all moving to He also receives help from Bridgestone Americas Inc.’s our area. I see them moving in all over the country and getting TireConnect online sales platform, which sends customers to bigger. They’re leveraging their ability to have better buying his website to set up an appointment. power. If you have three or four stores like we do, you can’t out“Tire pricing is as competitive as it’s ever been,” he said. “It’s leverage someone who can say, ‘I want to buy $5 million worth so competitive I can’t believe it could get even more competitive! of tires’ when I’m buying $500,000 worth of tires from the same But I think the manufacturers are trying to slow the competition manufacturer. They’re going to get the buying power. down online and raise the price to try to help us make some “Then they’re able to use that buying power to advertise. At money in the brick-and-mortar world.” the end of the day, the tires might sell for the same price, but Has Caroglanian ever considered selling his business? “Not our competitors either have better margins or are getting their really,” he said. name out there with the extra money they make on the tires by “I love working. I love being part of the game. I love the buying them right. customer interaction. I’m at a point where I just want to keep “It’s all about leverage. The car dealers are not only leveraging going a couple more years and re-evaluate then, depending what the technology, but also selling tires at an aggressive price. That’s the market’s doing.” their game. They want the tires that we used to sell coming to Despite the disruptions, it sounds to me like he’s still having them, and the mechanical work that comes with it. a lot of fun. ■ “We used to get the gravy, the brakes and everything because we did the tires. Now they’re getting it because they’re getting If you have any questions or comments, please email me at bob.ulrich@bobit.com.
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MTD December 2018
