Dealers react to Michelin’s national online sales plan

Dealers react to Michelin’s national online sales plan

Michelin’s plans to sell tires direct to the public nationally in 2017 may have angered dealers once again, but not everyone is worried. The secret to surviving is in accepting change, adapting to it and offering consumers what they want, says one tire dealer.

Michelin to expand online direct sales

Michelin North America launched its online direct tire sales platform, in South-east U.S. markets, with plans to roll it out across the rest of the country in the first half of 2017.

Although Michelin suspended its OnSite Mobile Retail program in Raleigh, North Carolina after a one-year trial because it did not perform as well as expected, Michelin is continuing to test direct sales of BFGoodrich tires, which it launched earlier this year. Tire dealers have been outraged saying the moves were “greedy” and “short-sighted” and would damage their business as they would be forced to compete with their own vendors on tire prices and lose on profits.

More online direct sales ‘inevitable’

Jim Melvin Jr, of Melvin’s Tire Pros said it was inevitable more big manufacturers would follow suit, but this wouldn’t necessarily sound the death-knell for independent tire retailers. He believes companies won’t supply tires at knock-down prices and would have to offer a deal for installation that was attractive enough to retailers for them to do it.

“Goodyear started it, Michelin’s now doing it, I’m sure all the major manufacturers will follow, because this is where every industry is going – on the internet,” he said. “I don’t think they’re going to be super-aggressive in terms of pricing. I can’t image they’re going to alienate the dealers because that’s their sales revenue base.

“I think what’s going to happen is that there will be some give and take and negotiation until you find the level of high water where it’s acceptable to the manufacturer, where they feel that they have got some control over the marketing and pricing of their product and the dealer can still (install tires) and still make a profit.”

Dealers need to make the internet work for them

Melvin pointed out that Goodyear’s foray into online direct sales to the public hadn’t been an “overwhelming success” and that dealers still had the opportunity to compete with Michelin by strengthening their own online offering and reinforcing the services and extras a tire retailer would provide that the manufacturer would not.

“The internet is where it’s at; the days of someone coming in the door and asking for a price on a set of tires are rapidly shrinking,” he said. “The moral of the story here, particularly with any disgruntled dealers, is to make sure you have an exceptional website, that you have your pricing on the website and make sure the consumer has the ability to order your tires online, because that’s what most people want.”

Dealers can still compete

While it has been suggested that some dealers would refuse to stock brands that were being sold direct to the public online, Melvin said that with Michelin, for example, dealers with competitive pricing and a good website and booking system would be able to compete effectively.

“A customer will look at your website and you’re saying to them ‘you want a Michelin tire? We’ve got them in stock; here’s the price and here’s the services we provide, like free rotation and free flat repair’,” he said. “If you’ve got a problem we are an authorized Michelin dealer, so we can handle any warranty issues, plus our prices are competitive and we can do it for you today.”

“As long as you have that, then you’re going to be able to fairly easily combat some of these manufacturers with their online sales. There’s going to be enormous backlash but there’s nothing you can do to prevent the internet; you need to embrace it, figure out how use it to your advantage, use it to do business profitably, and then run with it.”

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