Even though the auto industry gets most of its revenue from selling cars, according to Investopedia.com, the auto parts industry is much bigger. In order to become a tire distributor, you will need knowledge about different types of tires and their benefits. You must be able to understand the demand for each type of tire in your locality to succeed in your business. You will need to obtain a business license as well as a resale permit from your state.
Items you will need
- Business plan
- Resellers license
Study the different types of tires. Research factors such as tire size markings, speed ratings, load index, uniform tire quality grading, ply rating or load range, and wheel basics for each type of tire. There are three main kinds of tires: consumer, commercial and specialty tires. List the benefits of each type to become a knowledgeable distributor.
Make a product list. Analyze the tire market in your area and get an overview of the business along with a list of your competitors. List the type of tires they are offering and their prices. In addition to the three kinds of tires, you can also distribute accessories, such as tubes and wheel weights.
Write a business plan. Include a business overview, competitor analysis, product list and marketing plan. Also include a detailed explanation of your target market, financial projections and funding opportunities. Location and connections are very important in this kind of business. Explain in your business plan where you will distribute tires from and why this is a good location. For example, are there auto repair shops nearby? Are you near a major highway intersection? Are there lots of cars for sale? Answer these questions in your business plan.
List tire manufacturers or suppliers in your area. Evaluate them based on factors like brand, product, quality, durability, guarantee, discounts, shipment costs and bulk-pricing. Narrow them down based on payment terms and reliability.
Select a suitable location to serve as your warehouse. Ensure that this complies with your local zoning regulations.
Obtain the appropriate business licenses and permits from your federal, state, city and county governments. Obtain a resale permit from your county courthouse. Consult with an attorney for the best type of business structure for a tire business in your area.
Purchase inventory and vehicles to transport your tires.
Market your services. Build relationships with automobile dealers in the area. Offer them incentives to send their clients to your tire distribution center. Connect with repair shops and tire dealers to strengthen your visibility in the neighborhood. Ask if you can leave fliers and posters at their businesses.
Obtain insurance that covers your inventory, warehouse, trucks and employees.
Join your local chamber of commerce to network with other local business people.
Negotiation plays an important role in maintaining relationships with both suppliers and clients.
- tire image by Orlando Florin Rosu from Fotolia.com