10 Tips to Start Your Tires Warehouse Business | TIre Wholesale Warehouse

what is going on guys my name is fernando herrera so you're interested in starting your own tire wholesale business it's either because you have a tire shop and you want to start buying in bulk or you simply feel that it's a great way to just flip tires and make a profit out of a volume either way whatever your reason or purpose is i'm here to give you 10 reasons or 10 tips for what to know on how to open your wholesale tire distribution center so be sure to stick around because these are very very very important now i myself have actually managed several wholesale tire businesses right now i still do a lot of drop shipping and a lot of wholesale business like in terms of reaching out to customers and selling to them but again at some point i actually was able to manage a warehouse of over 35 000 square feet with over probably 10 to 15 000 tires and we were able to have pretty busy days and so i was able to get a lot of knowledge and i'm going to go ahead and cramp all those things down that i learned into this video so you whoever it is that's thinking of opening your own little wholesale business or whether it's a 100 000 square foot warehouse uh well you know just consider all these things before you go in and open especially if you don't know your market now like always be sure to smash that like button and subscribe because you know it really helps me out anybody who's interested in the tire industry uh again the purpose of this channel is for me to get to a million dollar net worth and the tire industry for me has been always kind of like that foundation and i think that just sharing some of that knowledge here on youtube is beneficial for me and hopefully beneficial for you guys so again if you appreciate that smash that like button subscribe but let's go ahead and begin so the number one tip i would recommend is knowing what type of warehouse you want to have if you're thinking to yourself well it's only a warehouse full of tires and that's it well you're wrong because there's actually different types of warehouses that you can open and it's important for you to understand and decide which type of warehouse you want to open now the first type of warehouse which is the most common honesty is obviously getting a large warehouse with maybe 5 000 or 6 000 square foot or more of space and then you start buying and stocking and then you start selling your advantage here is that when you go out and buy tires you're going to be able to have a bigger buying power so instead of going and negotiating for a price of four tires you're gonna be able to say hey i'm gonna buy you 20 can you at least you know discount me one dollar and oftentimes you'd be surprised but wholesalers will discount you from one to five to ten dollars depending on the volume that you're buying so there right there you're already getting some profit because again if in the market everybody's selling this tire for 50 but you were able to buy it for 49 and you buy 100 tires well by the time you sell all these 100 tires you already made a hundred dollars in profit it's a one percent markups very low but that's one of the things you have to keep in mind wholesale has very little margins you're really going to try to focus your own volume because again you're selling to businesses so you're hoping that they will they themselves will at least buy four every time or will buy consistently every day and you know that's where you're going to make your money the other type of warehouse that you might want to consider is a warehouse where you have very little inventory actually but you actually just know who has the inventory or what so in other words you go out there and you start reaching out to dealerships customers tire shops and you tell them hey you know what whenever you don't find the tire that you want call me i'll find it and it's kind of like a tire broker it's not really like a tire wholesaler but i've seen some people done it successfully where they start with nothing no inventory and then slowly they start scaling up their business because they've been able to build some profit this way now you might be asking yourself well how does it work again it's kind of complicated it's not super complicated but it's really just being able to determine and saying hey look i have in vegas there's and i'm going to use vegas for example right there's over 50 different tire distributors right let's just put it some very big that everybody knows and some very small that really nobody knows and so as a tire wholesaler that you're going to be reaching out to other people to call you whenever they don't find that tire you're gonna get that size and you're gonna call all these 50 different places and you're almost guaranteed always to find a cheaper tire through the smaller more local tire distributors and so that way you know i'll give you an example if a dealership is looking for a 2055.16 pirelli but atd which is a nationwide warehouse you know doesn't have any in stock and the next guy who has it is like 250 per tire but you were able to find it for you know i don't know 150 dollars somewhere else because someone never updated their cost uh you know you could buy from them and then sell it for 240 and those markups are pretty big or same thing if someone's looking for a specific size but nobody has it and you're able to find that supply that always has these kind of rare pricing these rare tires at a kind of good price then you could be earning yourself anywhere between 20 to 30 to 50 dollars per tire and it's quite profitable that way again a lot more complicated but that's the first thing you have to decide are you gonna be buying a large space buying in bulk and then selling it or are you gonna be more like starting out with just you know reaching out to people that you're selling tires have suppliers ready and buy them and sell them as you go the second thing most important thing this is the most important thing you have to keep in mind is software uh you need entire software you need an entire pos system you could use shopify you could use wix you could use whatever you want another type of pos system but i would honestly recommend you it is a tire focused industry point of sale system now i currently use tire guru i've said this in my previous videos they're great they're they're a very good company i myself am building with a team in mexico we're building a from scratch a brand new pos system with all the things that i feel would be great and it's going to be focused towards entire wholesalers uh the entire mobile van industry you know the mobile band and then tire shops as well so if you're watching this a year from now it could be very likely that um i already have that program live so feel free to comment below and you know ask but with that being said you need a point of sale system that will allow you to keep good inventory management so you want to make sure that if you're stocking inventory you have control of it you want to make sure it has a simple accounts payable program that allows you to know how much do you owe your vendors and how much customers owe you and then finally one of the most important things to simplify this whole wholesale part and really it puts you on a level like equal playing field against other big players out there in the industry is being able to have a portal for your customers to order online so customers have to have the option to check your inventory online and order because if that's if they have that you honestly have the best sales person out there and as long as you just reach out to a whole bunch of shops and set up that website with the username and password you know people are just going gonna order and it's gonna be so much easier now the third tip here that you need to know if you're wanting to start a wholesale business is knowing where you're going to get your product okay so you could buy local or you could buy uh by importing i just made a video like two weeks ago on how to import tires into the us so maybe that video will explain that further uh and i do explain the benefits of importing however if you're gonna be importing tires you're gonna need at least fifty thousand dollars cash unless you have some really good connections and they're willing to lend you some money but honestly we've been in this industry for quite some time and it's very rare for a company to just come and lend you 50 grand on a container of tires especially if you're importing it if you do happen to find a company that is willing to do that then it's very likely that the price you're getting per tire is not going to be a very good thus it just makes more sense to buy local now buying local here makes sense when you're actually you know wanting to stock and again just going out to your local tire wholesale businesses and negotiating really it comes down to that and saying hey look i'm about to buy you 50 tires 100 tires you got to give me a better deal and honestly they will it's just a matter of negotiating it's just a matter of reaching out to them and really obviously getting a good deal for them as well you know you cannot be negotiating for four tires but what you can do is if you have i don't know maybe if you need 20 different tire sizes well now 20 x 4 that's 80 tires and that counts as a big large order so you know you could buy sets of 4 and 20 different sizes and that's good the fourth tip i would give you is buying from your competitors so if you have you know sooner or later you'll find out who is your main competitor out there and you'll start to identify that there's someone already in your industry maybe maybe not but that's doing kind of like the same thing that you're doing and so oftentimes you know or even if it's your large competitor this might work sometimes but here is buying from your competitors because sometimes let's say there's shortage of certain sizes right and we're not gonna get nobody's gonna get them within maybe two or three days or a week and so this is a good strategy to follow when you notice these so if you notice that anybody out there doesn't have this specific size but you see that a competitor has eight or sixteen of them oftentimes what we would do in our team is we would buy all the 16 tires if this guy has 30 we would buy those 30 we would buy everything from everywhere so nobody has that size and we will go ahead and mark it up now i'm not saying price gouging here or you know taking advantage of people but it is a fair um you know it's a fair deal and you could increase price just a little bit where your margins can make up for that and again if a competitor has 100 tires well you're not going to be able to buy them because you know that's a lot of money and then by the time they get more stock the idea is that you have to sell all your inventory by the time they get more stock you know also keep in mind that some some competitors when they noticed we were doing that they started only releasing some of their inventory available to us or to the market so if they had 100 available they would only say they had 20 and once we went ahead and bought all 20 then certainly like an hour later they would release another 20 and we'd be like what the heck like we just bought all of them like how did they do and we would buy them again and then again so we found out that it's like ah these guys are just playing us you know so you got to be aware of that and just be very cautious the good thing is that you could always maybe depending on your vendor's terms but our vendors are always very kind even our competitors are always very kind and they always accept a return if necessary tip number five or the thing number five that you need to know or you need to do in order to start your wholesale business is knowing how you're going to be pricing your tires so for example uh a very simple approach is you could just set a flat rate percentage for everything but what happens here is that tires are worth you know thirty dollars and if you only are marking up three percent or four percent which is an industry average again for you in the bigger level maybe you might have more of a cushion but when you're just starting out honestly if you go anywhere between five percent or above you're not going to be competitive enough and you're not going to be able to move enough so it's important that if you're going to be taking this approach of a flat rate percent uh it doesn't work very well with more expensive tires because you know in a 50 tire it's only gonna be you know two dollars fifty cents uh maybe you know roughly i i don't know the math really but it would be less but if you're doing a four hundred dollar tire now it's like a fifty dollar markup so you're not competitive enough so you do want to have these rules in place where you say okay well if this tire costs from zero to one hundred dollars i'm gonna mark it up this much from one hundred dollars to two hundred dollars i'm gonna mark it up this much and ideally the markup should be decreasing as the value of the tire is going up also knowing that different brands will have different markups you know so michelin pirelli all these good quality high tier tires will have less of a markup because normally you make that money through program rebates you know the manufacturer itself will pay you pay out to you if you reach certain goals and volume uh so thus you know those are honestly sometimes you're even losing purcell because you're going to be getting a big check at the end of the quarter if you meet your goal and then again it's the same thing if you're buying local compared to if you're importing tires you know if you're importing tires you might be able to get a good 10 to 12 markup but on local tires you might be only able to do a five to six percent markup if you do your purchase right so very dynamic pricing is very important it's very complex honestly this part of the most complex part of the business uh that you know this part alone could be like a two-hour conversation but you know just keep that in mind the sixth thing you need in order to start your wholesale business is getting some customers obviously right so the best approach that i found is just reaching out to them calling them doesn't work that well but it could work sometimes i normally just was myself or had a outside sales person that's just reaching out visiting all these people setting up accounts working on leads and it's really a cost that you have to factor in and you have to consider again if you're going to be the one doing it i think that's good because you kind of get to know what is the resistance that customers often have why they're not buying from you so you are able to fix these things immediately like for example myself i probably visited over 500 different customers just in vegas alone at some point i even went to arizona like kingman like the nearby cities uh just to analyze and see if it was worth doing a big large run to those smaller cities but i think that has alone given me a lot of perspective and reasons of how to tweak your business so that people want to do business with you and they have they have a reason to shop with you other than just pricing the type of customers you want to focus on here is honestly drop shipping businesses are good because they just ship you the uh email you the fedex label and fedex picks it up and that's it it's very easy and simple the other type of customer that you want to target is tire shops honestly tire shops are really good business even if they buy one or two or three tires per week it's still pretty good because they're always consistently selling tires and it's very likely that they're going to give you at least one shot the other type of companies that you want to look at are rental companies like rental car companies taxi companies and fleet like large fleets that are moving lots of tires that once you land these deals are actually really really good because they just give you that steady business that any business want like any company wants the seventh tip or the seventh thing you have to know in order to start your wholesale tire business and this is more like a suggestion you don't have to do it but it's getting into wholesaling used tires all of this time i have been talking or referencing only two new tires wholesaling used tire is actually quite lucrative it's very messy it's very unorganized it's very difficult to manage but it's very profitable because if you are able to work out a deal where you're picking up these all these used tires you're wasting them properly but you're rescuing some of these tires you're actually getting all these types for free which you can then mark up to five ten fifteen dollars per tire depending on the quality um and you can honestly be making quite some money there from all of our shops that we have in vegas we do have a specific place where we kind of have them and then we just inventory them and wholesale them in bulk but we would say that from this department alone we're making anywhere between two to three thousand dollars in profit every single month but again we could be doing a lot more i feel like if we were to inventory all of our used tire display it show it in a system because we're not doing any of that we honestly just pile it up we bring test shops we let them pick or just buy in batches and then they just pay as simple as it as it is but again wholesale wholesaling used tires is very profitable just keep in mind it's very time consuming and messy the eighth thing you do want to establish in your business if you're starting a wholesale business is setting up routes so obviously people or tire shops are not going to be able to go and pick up the tax to your warehouse you want to have that competitive advantage of being able to deliver tires that doesn't mean you have to deliver them like in less than two hours oftentimes most of the tire distributors out there have a route that you know it's either morning afternoon or you know towards the end of the day uh if you're just starting out you can just have one route per day where you say hey you know what my driver leaves after 12 and he goes and delivers everybody's orders and that's how we work because we just don't have the ability to do more routes i think that still would get would give you that ability to deliver tires to those customers who are able to wait you will always have those type of customers who need the tires right now if you have the ability let's say you're the one running the business and you have a truck or you have an employee that could just take those tires consider offering hot shots hot shots you know normally you just charge 15 20 bucks now with gas prices i mean i don't know that might have to go up but just consider that as an option if you're really hungry for business if you already have enough business like ourselves we actually don't offer any hot shots unless it's someone that we kind of already have a good relationship with they're buying hundreds if not thousands of tires and we're just helping them out because this time they're asking for help the ninth thing you have to know in order to start your wholesale business is the team the team selection who do you need what do you need and why so the first thing you need is a csr you have to have someone picking up the phone calls you as an owner or you as a manager can do it so just keep in mind that the phones will be ringing you should expect each call to last anywhere between 30 seconds to one minute because it's people who are busy they just want a price these are old school people or people who normally don't have access to a computer that will tell you hey i need a size uh i need a price on a 205 55 16 or they will call you because they have an error because we delivered the wrong tire or just something that they just need to be fixed quick so you need to have someone on the phones for sure if you want to be successful in this business the other person you want to have in your team is a driver like i said if you're going to be offering routes set that competitive advantage you need to have a driver who knows you know how to work have the ability to lift you know sometimes i'm not saying that females are not fit for this job we've had a lot of female drivers but just be sure that in your work requirements they're able to lift tires up to and above sometimes you know 30 to 50 pounds because you don't want to be getting anybody a hard time and maybe injuring themselves you also don't want to make the whole experience uncomfortable for the customer seeing you know someone that's struggling to lift a tire and then they have to kind of help them out you know you want to make sure that the person that's going to be delivering tires is fit and able to go and maneuver through tight spaces and lift the tires you know up to 50 pounds in occasions you know some tires actually do weight over 125 pounds sometimes we roll those off i mean those are extremely heavy and nobody can carry them really but just keep that in mind in your driver the other person that you want to have you know is obviously a purchasing manager again this is a person that you could roll like you can fill in and technically you should be doing that job if you're just starting out but someone has to be buying uh all the stock that we're selling you know if we're noticing that there's this size that we're just moving easily well we need to make sure that we're always having that size and that's the purchasing manager it has to be always looking out what are we selling what do we need to buy and what's the best price i need to buy it for and you know kind of always analyzing the market price making sure that we're competitive enough if we have if we're having some stock that's just not moving maybe lowering the price a little bit more but you need someone like that again if you're bigger you're obviously going to need more people accounting people you're going to need inventory management people managers maybe a system manager sales people outside sales but like i said if you're just starting out then these three people are essential uh you could put multiple hats in yourself and then just hire the one that you feel you dislike the most uh in terms of the job activities or just the ones that you don't have any experience in but with that being said guys i the 10th i almost forgot the 10th thing that you want to know is obviously how much profit can entire wholesale business do well in one of my past attire wholesale businesses we actually lost a lot of money because i was always marking down the price to the pro to the point where we weren't making money with all the overhead expenses you know paying insurance employees all that stuff we weren't making any money suddenly a big competitor jumps in into the biggest market and like 40 percent of my revenue goes down we had large big overhead and it costed us to close down that company you know honestly just failing the complete whole project so it's very tough to say now the way we run our business is very little overhead honestly three people run our entire warehouse operations and that's the driver the csr and the price pricing manager and if you do it like that and you have a large amount of volume you could expect anywhere between three to five thousand dollars per month maybe more depending on your pricing policies again there's so many variables here depending how much you're paying uh but you know just something to keep in mind i would say start slow and small and start with some customers that you you make money you have to make money if you have customers that are just bleeding you out and squeezing every single penny a dime trust me guys those are not worth it by the time someone comes in with a cheaper price they're going to abandon you and they're going to leave you you have to go with the customers they're going to be happy with the service you provide they're going to be happy dealing with you because those customers are the ones that are going to reach out to you and tell you hey you know what i got an offer from someone else and it's cheaper can you do something better for me and they'll give you the ability to re redeem yourself if you fail so those are the type of customers that you have to look out for but again if you're selling anywhere between fifty to a hundred thousand dollars in sales in a month you should be looking at a two to three percent markup which you would be two to three thousand dollars if you're doing things right but well guys there you have it i hope you guys enjoyed this video i'm tired of speaking so much so let me know what you guys think in the section on the comment section below also if you have questions feel free to reach out via email or instagram uh i haven't been using instagram honestly but email works just fine follow me on instagram though i will check it and you know i i have some projects for that just later in the future i just don't have the time to reach out via instagram but um again don't forget to smash that like button subscribe and i'll see you guys again next time peace [Music] you

Channel: Fernando Herrera

Views: 24,231

Keywords: fernando herrera, tire shop, tire business, tire review, business tips, mobile tire shop, tire industry, tire business start up, tire shop didnt tighten lug nuts, tire business philippines, Tire Wholesale Business, Wholesale tire business, tire warehouse, tires warehouse, tires warehouse business, tire warehouse business, Tire Wholesale Warehouse opens, tire business profit margin, tire industry association

Id: hmc9bqqtyKI

Length: 23min 33sec (1413 seconds)

Published: Wed Mar 30 2022