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Retailer markup on tyres

ScoobyDooLondon

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Jul 6, 2014
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Location
Maidenhead, Berkshire
Car
Mercedes S320 CDI 2008
What's the retailer markup on tyres? Both online and instore.

First year of MB ownership and first 'decent car' so was happy to read the forums and learn for myself. Confused by a lot of the pricing methodology.

Three examples spring to mind:

1) First off, asked Pneus-Online to price match their tyre at £152 vs £146 at competitor site (Michelin 255/45/18 Y99 MO).
Likewise for the rears, which is 275 version of the above £186 vs £172 at competitors site.
Reply came back:
"We are sorry to inform you we cannot match the price of our competitor. Our best offer: £152.06/product.

A £4.66 voucher is available for the next 24h in your customer account for the purchase of:

2 Michelin Primacy HP MP FSL 255/45 R18.

Unfortunately for the second request we were not able to offer you a better price, we would sell the tyre at a loss"


2) Asked Camskill to match TyreLeader's prices but they refused, email response:

"Sorry but as per the website we only attempt these against UK online retailers, Tyreleader are a German company".

Fair enough, Camskill, in my minimal experience, were the cheapest UK supplier. But as I understand it, Camskill don't hold stock (certainly for my tyres) and they would be ordered from Michelin. In which case, there is no holding charge, no risk on their part as they take payment first - so how come they were not able to match the Germans (Tyreleader and Oponeo) both of which:

i) hold inventory
ii) cheaper price than any UK online retailer
iii) and ship it here for no additional charge

What are the Germans doing that we can't do!


3) Various tyre retailers, as recommended on these forums. Rang a few and none of them came close to approaching what was available online, including the fitting charge.
Martin Tyres was mentioned, very likeable chap I spoke to, but the 255's fitted came to £194-ish. He was happy to charge £10 per corner if I supplied the tyres (which cost £145 online).

What I don't understand is, even if they order at retailer consumer prices, they would still be better off! All sites have a trade discount, but not sure what that discount typically is - anyone care to know?

Whilst I understand, no one wants to advertise a very low rate, but for the odd customer, surely its better to take a lower margin, close the deal, build up goodwill and future sales, then to lose it altogether.

Not sure what to make of all this, can anyone with an insight into tyre pricing and margins shed any light on such disparate pricings and what is the typical margin on tyres?
 
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Why, stick to Michelin? Shop around and look at purchasing an alternative brand. I don't think in real terms tyres have ever been cheaper along with the huge choice of brands now on offer, thanks to the internet.
 
Some businesses simply give their best price upfront and haven't got time for penny-pinchers, it's usually not in their interest because when that same punter needs tyres next time, they forget 'loyalty' and go somewhere else to save another 10p somewhere else.
 
Don't forget to factor in inflation...
 
It wasn't the absolute price of the tyres I was concerned with, rather the relative pricing between different sources.

SPX is spot on regarding price matching penny-pinching consumers, as he rightly points out, these days consumers in general are more savvy and more prone to finding the best deal.

However, I still can't figure out how the German's are beating us on price including shipping..

Separately, what is the margin on tyres, if anyone should know.
 
It wasn't the absolute price of the tyres I was concerned with, rather the relative pricing between different sources.

SPX is spot on regarding price matching penny-pinching consumers, as he rightly points out, these days consumers in general are more savvy and more prone to finding the best deal.

However, I still can't figure out how the German's are beating us on price including shipping..

Separately, what is the margin on tyres, if anyone should know.

I have no idea on the Mark Up. What I can tell you is that varies massively from outlet to outlet (including on-line). I think most outlets now expect the customer to barter. So you have add in a +% for that in the fist instance. Some may simply work out their bottom line and add a small % to make an honest living. That being the case they will not drop. Oddly that can lead to claims of not negotiating.
 
Whilst I understand, no one wants to advertise a very low rate, but for the odd customer, surely its better to take a lower margin, close the deal, build up goodwill and future sales, then to lose it altogether.

Price sensitive customers are probably the least loyal.

Not sure what to make of all this, can anyone with an insight into tyre pricing and margins shed any light on such disparate pricings and what is the typical margin on tyres?

If I buy a tyre at say £120 and sell it for £195 I only need to sell one tyre to make the same as selling 5 tyres at £135.

It only takes 1 in 5 customers not to shop around and I make more than I would selling to the other 4.

Also tyres are to some extent an forced purchase. People who need one are maybe need an urgent replacement for a puncture. People who need 2 or 4 are more likely to have time to shop about because it's down to wear.

So chance are those other four customers are perhaps negotiating because they are buying more than one tyre. So they negotiate the price but spend more in one transaction.

And then there's the issue of stock. If I keep one tyre in stock then if I sell it I may not be able to sell to another customer that day - or tomorrow. So it's worth holding out more margin if it's about that tyre to be fitted today. On the other hand if the customer is making a booking for a couple of days ahead I can order in their tyres aand still have that tyre in stock to for a punter willing to pay full whack.

And if you get stuck at night with a double puncture and and call the likes of the AA they'll try and sent a mobile tyre fitter rather than recover your car. Not much room for negotiation if the tyre fitter has stock unless you can push the AA to recover you home. That £135 or £195 tyre suddenly becomes full £225 'RRP'.

It's a bit of a racket - but it's probably quite logical.
 
About price differences, I believe it sometimes comes down to bulk buying. A retailer will be offered by the wholesaler or distributor reduced prices if they take a certain quantity. How much of the saving they pass on to the customer is another matter. My local tyre place often tells me about the special deals he has got and I have got bargains as a result. I have found it always pays to consider all premium brands and not stick to a particular brand.
 
Could the tyre manufacturers or retailers be involved in price fixing to maximise profits?

I'm not saying they are at all, but it wouldn't be the first time companies did this.

Does anyone know the wholesale price the retailers but their tyres at?
 
Germany was always known as the cheap place to buy electronic goods...

And the UK is known as 'treasure island' to sellers...if that tv prog I watched years ago is correct. The programme said sellers charge more in the UK for the same goods than on the continent.
 
Economic pressures lead to over-inflated prices.
 

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