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Tire profits
I haven’t seen an updated post about tires and profit margins in several years , so I was interested in asking the seasoned business owners how their business and profits were doing especially with all the chain stores these days. One question I have, is are your margins including mount and balance or are you adding a percentage on the tire plus the mount and balance cost! I’m a startup business and really thinking $25 a wheel is my target price for mount and balance and then a flat markup on cheap tires and a percentage markup on higher end tires. My goal is to average $200 a set!? Is this realistic….. Thanks for any replies
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11 Replies
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In our area, the tire business is only for the up sale. Competition is fierce, we make $15/tire, give free rotations so we can check the front end/brakes/etc… to make a little money on down the road. Paid for advertising I guess you would say, , , , Best of luck on your goal, no way to get there in our market.
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So you’re saying you make $$60 a set installed out the door!?
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We have a flat $25 markup per tire. Then we charge $70 (16″ rims or smaller) or $90 (17″ rims or larger) for mounting and balancing plus $4.50 in tire supplies. If they have TPMS sensors that we have to be careful of or reprogram, we charge another $15. We are a little bit higher than other places in the area (I think), but we don’t really care too much about tire business as the markup has to be so low. We really don’t make money on tire changes. Also – being in New England we get so many tire changes twice/year that we can’t handle them all, and we definitely don’t have space for the tires we have to get.
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This sounds acceptable to me as the dealer of course. From my experience cheaper usually comes at a price of more aggravation than Profit along with selling used tires. Thanks for replyn
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I usually get $22.50 for mount/balance and disposal, plus an average gross profit margin of 28%. A set of tires usually means around $200 gross profit on the job. I am an indy garage in a small rural town, so I only sell 1-2 sets per month. I don’t try to volume price because I have to order tires JIT, and could not sell in volume anyway
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Hi,
in our market prices for a set of wheels varies from 30 to 40 euros. This includes mounting, balancing, scraping old tires and other stuff like TPMS resets, weights. Fun fact we cannot take any money from customer for getting rid of old tires (this is regulated by law) and we cannot refuse to take old tires. What we do extra we offer our customers to store their summer/winter tires for a season in our shops warehouse for 40 euros per season. As for selling tires – we don’t do that because profit margins are extremely low and you have to provide warranty and so on. I see that the labor prices in our market are way too low at the moment so we don’t take new customers and only serve our old ones because of capacity issues. Changing tires takes time and we have better more profitable things todo. Tire changing is an addon to our services and not a main service we provide.
I know it might sound like a wasted opportunity but from previous experience cheap tire changing doesn’t generate new customers it just attracts those customers who are looking for a cheapest place twice a year 🙂
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Always good to hear from other market areas. I’d hope that’s 40 euro per tire mounted and balanced! I agree though seems no matter what country you’re in cheap tends to attract the wrong clients and I’m not looking for headaches.
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Always good to hear from other market areas. I’d hope that’s 40 euro per tire mounted and balanced! I agree though seems no matter what country you’re in cheap tends to attract the wrong clients and I’m not looking for headaches.
Sadly it’s per one set 🙂 No one will ever pay 40 euros per tire that’s our market right now. As an example our hourly labor rate is ~30 euros.
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Hello first time replying to a post but I enjoy this site. Its nice to see & hear what other shops are doing in this crazy world ).
Shop is in Minneapolis. We mark up tires $30.00 each under $100 cost and then it goes up on a sliding scale in the system. $4.00 each disposal [keeps going up] in Minnesota. Usually free mounting and $15.00 balancing. Currently rethinking this because of wheel weight costs/regulations [lead] This is subject to rim cleaning because of all the salt here causes rims to get ugly fast. tpms and valve stems extra. In our market this is I think competitive pricing and maybe even a little under $
In response to the Euro guy, all I can say is WOW $30 euro an hour labor rate is nuts. We could not pay the mortgage at that rate here in the USA
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We are a specialty BMW and Mercedes shop outside of Toronto. We mark up all tires 25% and add $145 for the mount, balance and install. $4 disposal fee is also extra.
We do not try to compete with tire shops and chains, if we get a tire sale it’s worth our while.
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I agree with the 30 euro rate, that’s just crazy in the States but it is whatever the market will bare! It seems from previous answers that all shops have a different formula. I wonder if owners have thought this out because I’d bet shop rate hour across the country doesn’t differ as much as some of these quotes for tire service. Time is time and it should reflect your shop rate hour is my opinion.
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