Credit Card Scam Update: Another Real Life Example (by Jeff Short)

Sometimes timing is everything.  I just received a nice thank you email from one of our customers.  He is giving credit to our May 19th credit card scam alert blog post for saving him from losing $3,200 to a phone-calling crook.

Doug Bouder of S-N-D Tire, Chambersburg PA received a call from someone asking him if he sold tires over the phone and would accept payment with a credit card.  Doug said that he could do this.  The caller then asked him to text pictures and pricing to him.  He started with one size, but that quickly led to a request of 4 to 5 sets.  When the caller mentioned that he would pick up the tires, something clicked in Doug’s mind.  He remembered our scam alert email.  Doug called a friend at another nearby shop who said they had actually been stung twice with the same scam.  Over the course of several phone calls, Doug noticed the phone numbers kept changing.  The first was a Maryland number, then Ohio, and the last call was using a Las Vegas number.  Doug reached out to his bank, who also cautioned against proceeding.

Doug said, “It’s amazing.  I read your email and then within 2 weeks I have one of these guys trying to scam me.  Thanks for saving me $3,200.  That’s real money for a guy like me.”

I thanked Doug for letting us know and giving me permission to share his story in the hope of helping more of our customers.  If you have had something like this happen to you, please let me know.

Avoiding Credit Card Scam/Fraud (by Jeff Short)

This isn’t really news to anyone. Low-lifes call businesses and pull scams. They use the relative safety of hiding behind a telephone to do their dirty work. Often the weapon of choice is stolen credit card information. Obviously, day in and day out you process cards with hardly a thought and then one day you get surprised. The bad news is that even when you run a credit card, or key in the account info and you get an “approved” message and an approval code, you can still be left holding the bag for the entire transaction amount, if the card later turns out to be stolen. The good news is that by following some procedures you can protect yourself. We reached out to our bank and they were nice enough to come in for a meeting where they laid out some processes and procedures that were new to us. You should know that the banks consider “card present” and “card not present” to be two totally different scenarios. With card not present you are at much greater risk of a chargeback if the card is reported stolen. With card present you are still at risk and you should be following a checklist. One point that was stressed by the bank reps: If one of your transactions involves something out of the ordinary for your normal day to day business and the credit card turns out to be stolen, you will be held to stricter standards. In other words, if your normal transactions consist of billing customers for sets of tires and run of the mill auto services and then one day you run a charge through the system for 6 sets of 20” tires for a guy from Toledo, who’s not at your shop, the bank’s not going to show you much compassion if the card is reported stolen a few weeks later.

Please click HERE to read our bank’s recommendations. Please don’t take them as the final word. You should talk to your bank to see what they say. And finally, I’m including the guidelines we have provided to our employees.

New Brands: 6 Month Update (by Jeff Short)

It’s been a little over 6 months since we announced the additions of Hankook, Toyo, and Yokohama to our lineup. The K&W crew has been busy learning all about our new brands. Thinking about how they compliment our existing line up and what new opportunities they might have for our customers. Initially it’s intimidating when you look at a catalog with so many different types of tires, but after a little while you learn the key lines. We thought it would be helpful to share some our findings with you.


Hankook sales are tracking like a rocket. Straight up. There seems to be an incredible amount of raw market demand for their products.

Currently we see the following lines leading the way in passenger tires:

* Optimo H724 (broadline 70,000 mile S and T-rated)

* Optimo H426 (luxury H and V-rated all season touring, 60K warranty)

* Optimo H727 (Hankook’s flagship 100,000 mile T-rated touring line)

For light truck and SUV:

* AT-M leads the field. Consumer Reports call this the best deal going in an all-terrain tire.

* Next is their H/T line that goes by RH-12. Hankook also offers a special CUV line called the HP2.


With Toyo we’ve seen very strong sales of their Extensa tires. Extensa is Toyo’s entry-level line that performs with other brand’s premium offerings. Toyo recently adjusted their pricing on Extensas and we saw our sales double during the second half of March. As of last week, our data shows that we have 70 dealers buying Toyo products.

Interesting Toyo Case Study With Our Customer

I’d like to give you an example of what one of those dealers is doing with the brand. Craig sells several brands, one of which is Cooper. At the beginning of the year, Craig decided that he wanted to try his hand at promoting Toyo, but only if there was something in it for him. That “something” included making a better margin. Craig decided to increase his standard profit per tire by an extra $15 for every Toyo that he sold. He said, “I’ll be your guinea pig and let you know if this works.” Today I called Craig for an update. I let him know that he had purchased 116 Toyos year to date. I asked him if he had to deviate from his pricing plan. He just laughed and said, “No way.” Then he told me how much it meant to him that K&W’s marketing support team had made him custom Toyo brochures that feature his name and logo. Craig said, “My customers are impressed. They tell me how professional they make me look. It’s like I have the resources of a chain store.” So 116 tires at an extra $15 each, is $1,740 in extra profit for the first quarter. Figure in the rest of the year and he’ll make an easy extra 8 to $10,000 in profit.  And, one more thing you should know… Craig’s Cooper sales are up 55% this year.


Yokohamas continue to sell well throughout our regions. The standout bestsellers are the Avid Ascend and Avid Envigor lines. The Ascend is Yokohama’s best touring tire. The Envigor line occupies what Yokohama calls a “Grand Performance” category. That means all-season, high performance, low rolling resistance, and long tread life.

Avid Ascends, Avid Envigors, Geolandar G055s, and Geolandar G056s. If you know these 4 lines, you are off to a running start with the Yokohama brand.


Those familiar with K&W know this is our bread and butter brand. Though we have many years of experience with Cooper and aren’t learning from scratch about the lines like we are our new brands, we still see interesting trends and transitions. Here are some:

* The Discoverer SRX is really taking off and looks to be the perfect replacement for the CTS

* Discoverer S/T MAXX sales have doubled since last year, of course all the new sizes help

* CS5 sales are strong—The transition from the CS4 was a little rocky for some dealers, (always touch and go when replacing a “best seller”) but things smoothed out once we got a handle on the mounting issue. Click here for more on mounting CS5s: CS5 Mounting Update

If you are new to K&W, Cooper is our “go-to” brand. For a quick initiation, check out the CS3 and CS5 for passenger cars and for light trucks check out the Discoverer SRX, H/T, and the AT3.

We hope this information is helpful and maybe gives you something to think about. If anything here strikes an interest and you’d like to know more, or if you just have some questions we are happy to help. Just say the word and we’ll help you think through the best options and opportunities.

Goodyear’s New Sales Plan-Is It Worth The Trouble? (by Jeff Short)

Goodyear is going to sell tires direct to consumers online. Their stated motivation is getting their market share of the 80 million “Millenials” who prefer to shop online. Let’s consider the implications for the tire industry and your independent shop.

This plan was unveiled at their January 2015 dealer meeting and involves participating dealers getting an installation fee and a commission for their services instead of actually making their normal markup on the sale.

As soon as I read this news a few things came to mind:

  1. This is big news
  2. If it sells tires, then Michelin and Bridgestone might not be far behind
  3. Some dealers are going to be upset.

So far, numbers 1 and 3 were dead on. I’m not writing this with any ill will towards Goodyear. I know a lot of people that have made a great living selling their products. I do know that this is a major step to take with the hope that they’ll get a piece of the online tire business, which in the US is only 6% of the market. According to Modern Tire Dealer magazine editor Bob Ulrich, that share hasn’t really increased much since 2008. (Maybe that’s because tires might not be the greatest thing to buy online. I get books, skateboards, and toasters, but tires are a little more complicated.)

And then you’ve got to go face the INSTALLER. You know, the guy that tells you that you really should have bought them from him and gotten a better price, different tire, saved the shipping expense, gotten the proper size/ load range/ speed rating and asks the ever popular “take yer ground beef to McDonalds too? So Goodyear is hoping that going directly after the online shopper is worth aggravating their dealers. But as Kyle Stock of Bloomberg News says, “…it’s not a riskless strategy. The Akron-based tire maker’s gambit could run roughshod over it’s best sales staff: the thousands of small businesses… that can easily nudge a customer from one manufacturer to another.”

From the comments I’ve heard and read, the nudging has commenced. Here are just a few examples: Bill Denvir, a tire dealer from Connecticut wrote a letter to Tire Business saying that over the past 10 years independent dealer’s market share has eroded from car dealer, big box store, and price club competition. He states that Goodyear’s plan would convert him from being a tire dealer to “simply be a convenient installation station for online retailers.” He further states, “The Denvir Tire Shop will no longer sell any Goodyear product.” It’s not just him. So far it’s been a negative with everyone I’ve spoken with. I asked Mark Pollard, who operates 3 Wilson Tire outlets in New England, for his thoughts. He said “2 thumbs down.” When I asked if I could quote him, he said “sure, but make it 3 thumbs down.” So who are the potential winners in all of this? My best guess is the “Tier 2” players. And not just Cooper, Hankook, Toyo, and Yokohama because we sell them. General, Conti, BFG, and Firestone might be where dealers turn. I know the reps that supply us with our brands all tout PROFITABILITY as the number one reason why a dealer should consider them. Time will tell if this all blows over, or becomes a turning point. Independent tire dealers, as the name implies, can be awfully independent. Smart manufacturers would be wise to remember this.

Can You Look at My Tires? (by Jeff Short)

That’s the question I hear from my friends and neighbors regularly, and I’m in the wholesale business. You must get it all day long. I wonder how you and your staff answer that question.

Do you just quote state law for fear that the customer will think anything else is you just trying to make a buck off them? What if there was a way to provide your customer with helpful information that will build their trust in you AND provide opportunity for replacing tires sooner than 2/32nds (the law in 42 states)?

Many reliable sources say that tires should be replaced before that state requirement. Consumer Reports magazine stated that their tests indicate tires should be replaced at 4/32nds. The difference in wet braking tests was huge. Independent tests conducted by The Tire Rack confirm these findings.

So, how do you use that information? In a day when many of your customers research these types of questions online, you can offer them this information. Two of the most trusted sources recommend earlier replacement. By sharing this info, you show your familiarity with the online sources they are reading. You show your expertise in a way that doesn’t make a hard sell, but gives them trusted information to make their own choice based on safety and expert recommendation. Many will probably still say, “What would you do?” People will not be surprised when you suggest that tires should be replaced before they are “illegal.”

In conversation with our dealers, I found that some are using a 2,4,6 recommendation. They state that tires are legally worn out at 2/32nds, but should be replaced at 4/32nds for proper wet traction. Below 6/32nds the tires are ineffective in the snow…. “will you be driving this vehicle in the snow?”

What is your policy? Is someone inspecting every vehicle that enters your shop for service? You have to be prepared that if you do not recommend replacement when warranted, the next shop might.  I think many independent dealers want to do the right thing by their customers, so they tend to want to let them slide by (no pun intended) until fall or the summer vacation trip instead of just coming out and saying it’s time for new ones. I’m sure the chain stores have a checklist and someone is asking for the sale.  So here is a way to take it off of you.  Just say, “You have a little to go before they are illegal but Consumer Reports and Tire Rack say they should go at 4/32nds of an inch, so let’s do the right thing and get them off.”

Don’t Hold A Grudge (by Jeff Short)

What exactly is a grudge purchase? The dictionary defines grudge as “resentfully unwilling to give something.” In our case, someone is resentfully unwilling to give their hard earned cash for some smelly black rubber things that the guy at the shop says need to be replaced. A new Xbox, Coach purse, vacation, smart phone? Now for those they are willing to shell out some bucks, but not tires. Of course, there are exceptions. There is the sports car driver that wants the latest from Yokohama or the guy with the raised 4X4 who is happy to spend big on the new wheels and Toyo Open Country RTs. But they are just a slice of the tire buying public. So yes, most tires are purchased grudgingly. You should know that marketing professionals actually study how to better sell grudge purchases. There are actually easy to follow steps that will help you sell more tires, and here’s the kicker… you can sell better tires and make more money.

Actual market research shows that the easiest sales are made by quoting only the lowest price goods. The customer asks for the product, and the salesperson quotes the cheap stuff and tells them “it will do just fine and look at how much you are saving.” This salesperson didn’t have to waste too much time qualifying needs or negotiating the price, let alone studying up on features and benefits. But it doesn’t have to be this way, if you and your crew followed a simple sales process.

Let’s start with Goodyear’s research that shows over 80% of tire shoppers buy whatever the salesperson suggests. It’s just human nature. When faced with having to make a decision on something you know nothing about, you tend to go with the advice of an expert. Just like, if your doctor says you need prescription ABC, you’ll most likely not argue for XYZ. Sure, your tire customer will go online and try to read up, but they’ll take your opinion if you say something like, “you don’t want that brand, they’ll shake your fillings loose.” You are the one with all the power. People are price sensitive. Especially over grudge purchases. But don’t forget that Michelin, Goodyear, Bridgestone, and a few other premium brands make up over half of the replacement tire market. There are huge opportunities for dealers to be making exceptional profit margins on tier 2 brands like Cooper, Hankook, Toyo, and Yokohama. You just need the discipline to have a process and stick to it.

Here are a couple steps to get you started:

1) Adopt a “go-to” brand and learn to sell it well. If it’s one of our brands, we are happy to help. You’ll get better and better at presenting it and your confidence will show.

2) Qualify the buyer to find out what they liked and hated about their old tires. This step will give you insight on what to suggest and which features to play up.

3)Quote the good stuff, and tell them why you’d put them on your car if you were them.

Don’t be thrown off when they say they’re “shopping on price.” What else do they know? They’re saying it to put you on notice that they want a good deal. It doesn’t mean that they want you to research 4 wholesalers websites to find the lowest priced, lowest quality tire known to man. It probably means something more like, “I want a fair price on a quality tire that is quiet, has good wet traction, and won’t wear out too quickly.” That’s what they would say if you asked them the basic qualifying questions. This is all more than worth your time if you have set up your go-to brand with a better profit margin. Extra payback comes from word of mouth advertising that your store gains by selling higher quality tires.

Don’t be afraid to make a fair profit. You and your business are worth it.

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