“I feel we do a good job where we’re at, but there’s always room to have more market share,” Cheryl Gossard, president of K&M Tire Inc., told MTD during the company’s recent Dealer Conference and Trade Show in Las Vegas, Nev.
K&M Tire’s customers can expect to see growth in several areas this year, she said.
“We’re constantly looking at what we’re currently offering and ways to improve it. We have improvements coming for our online ordering system. We’re going to add features to it. And of course, we’re always looking at our warehouses.”
The Delphos, Ohio-based company – which boosted its revenue by 14% in 2022 - opened its 34th distribution center this past January.
“It seems like every year we’re moving one of them to a larger warehouse. We have a couple of those coming in 2023.
“We’ve been talking for years about (enhancing) our inventory management system,” said Gossard. “We started that in 2017 and slowly have been adding it to every location, which is great timing because it lets us use more of our space better.
“We like to stay busy,” she said with a laugh.
'For our dealers’
K&M Tire has 80 outside salespeople “and 30% of their time is focused on (acquiring) new customers. We know there are still a lot of people within our existing footprint who aren’t customers and we want them as customers.”
According to Gossard, independently owned tire dealer customers in small towns and rural areas “are more of our niche. Our customers in rural areas normally carry passenger and light truck tires and some carry commercial and ag (tires), as well. We can supply all of those.”
K&M Tire's ag tire rebate program paid out $500,000 to members of the company’s Mr. Tire dealer group in 2022, while its commercial tire program paid out $400,000.
Some $3 million in total benefits were paid last year to Mr. Tire dealers. (The group has around 1,600 members, with more than 150 dealers having joined in the last 12 months.)
Gossard said it’s important to refine and add to the programs that K&M Tire offers. “We do it for our dealers. We want to continue to help them be successful. The money they get back goes right to the bottom line for them. The more we can add, the more it helps them – which keeps us in business, too.”
There’s a need for small dealers to be part of something bigger, she noted. “Some of them aren’t quite large enough to be on a vendor program on their own.”
Inventory management
Like other tire distributors, K&M Tire grappled with inventory fluctuations last year. At this time in 2022, Gossard said inventory levels were lower than what the company preferred. Starting in August, the situations began to reverse itself, she explained.
“Our PLT inventory is in a pretty good spot” at the moment, “but we have a lot of ag tires on-hand. For the last couple of years, it was hard to get them – with long lead times – so we had a lot on order and then everything just showed up at once. So right now, all of our warehouses are full.”
Spring planting season will help “move out” some ag tires, she said.
Supply from domestic tire manufacturers “was stable, for the most part” in 2022. “It was a lot easier to manage” than the supply of imported tires. “We didn’t have to change our ordering as much for” products made in the U.S.
“And if some started to come in (at the same time), we could cancel some orders.”
However, K&M Tire experienced a large influx of imports last year. “That’s one of the reasons our warehouses are so full. A lot of that came in at once. It’s a small part of our business, but definitely continues to grow.”
Gossard said K&M Tire also is keeping an eye on consolidation in the wholesale distribution channel, believing that this will further benefit the company, which remains family owned.
“A lot of our acquisitions over the years have been people reaching out to us because they really like how K&M Tire does business. And that continues to happen.”
The company acquired Midtown Tire, a wholesaler based in Rochester, N.Y., last May. “That’s been a great addition,” said Gossard. “We took over their business and were able to expand our footprint in New York. It was just too far away (for us) previously.”
“A lot of our customers like doing business with us because we’re family-owned. We can relate to them and are doing everything we can to make them successful.”
Gossard declined to reveal if K&M Tire has any acquisitions in the works. “I think last year a lot of people had a really good year, so they’re not ready to sell. They want to hold on a little longer.”
