03-03-2016, 10:18 AM | #1 |
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Posts: 122
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tire priceing
Here we go again.....
ok so my owner is wondering if we should be doing a flat fee mark up on tire as opposed to GM's suggested markups. Our gross profit for last year on tires was 15.32%. I did do a comparison to the tire price match claims that we filed in 2015 and with GM's pricing structure that we are currently selling at we the average difference was $17.85. So does it make sense to do a flat markup??? I truly believe that we can sell more tires with a flat fee if our service dept. can upsell other services to make a flat fee mark up turn profitable. It seems our current process is having a "C" tech slam tires on and run the vehicle out the door. Rarely do we see any additional services when we do tires. |
03-03-2016, 11:55 AM | #2 |
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Join Date: Jun 2012
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Purchase directly from the vendor, and mark up a percentage across the board.
I think you will be astounded to find there is a sometimes huge difference in tire pricing between the GM program and direct purchase from the tire vendor. I kept track for years, on the back of each invoice, of the difference each tire would cost if purchased on the GM program, and it was almost always more cost effective to purchase directly from the vendor! I was able to keep customers happy, as well as NEVER having to initialize price match claims because we were always lower. My DM hated it, but we always had happy customers, and were able to help retain loyalty to our facility. |
03-03-2016, 03:40 PM | #3 |
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Join Date: Jul 2010
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Tires bought off the program cost you on Loyalty.
Tires are a commodity - mark them up $10 ~15 per tire, charge the same to M&B them, throw in free rotation for the tread life, and have the customer return. I have not come across any huge cost differences in a while, and when I do, I call the Tire Billing helpline, and have gotten a few adjustment credits. |
03-04-2016, 12:37 PM | #4 |
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I used the GM part number, where applicable. . Last edited by XDCX; 03-07-2016 at 09:53 AM. Reason: Fixed quote tag to make the post easier to read |
03-10-2016, 10:21 AM | #5 | |
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Quote:
To the extent one of the primary objectives of having dealerships sell tires is to keep the customer "in-house" it seems like the process is somewhat broken if the vehicle isn't evaluated and the customer advised of any needed services. |
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03-10-2016, 11:46 AM | #6 |
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Be careful, they will audit your purchases, and if they aren't being billed through the GM Tire Billing program, they will ding you, plus, that is a violation of your dealer agreement. Might talk to your dealer owner or GM and see if they want to continue that practice.
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03-11-2016, 12:37 PM | #7 |
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Join Date: Oct 2012
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Most likely it's already affecting your parts sales loyalty if you not buying tires on the GM program. You should check your sales loyalty report.
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03-16-2016, 06:09 AM | #8 | |
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Quote:
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05-24-2016, 06:42 AM | #9 |
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[QUOTE=tnpartsguy;37891]Be careful, they will audit your purchases, and if they aren't being billed through the GM Tire Billing program, they will ding you, plus, that is a violation of your dealer agreement. Might talk to your dealer owner or GM and see if they want to continue that practice.[/QUOTE
I just bill out the number GM assigns the tire, if it has one. No dings, just my DM asking EVERY TIME "When are you going to get on the GM tire program?" because it is cutting into his sales numbers. As far as the dealer agreement, I feel it is no different than ACDelco from a WD. |
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