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Letter from the President:

Getting Back to Basics

Several years ago Walmart implemented a low price strategy on virtually everything they sell. Many of their suppliers and competitors were trapped by this low price strategy the result of which is some of these companies no longer exist. Unfortunately we have seen this trend in the tire industry also as a surge of low cost, poor quality tires has flooded the US market. Many tire dealers have succumbed to the buy cheap, sell cheap strategy as sales personnel tell management that they can’t compete and need to sell the cheap stuff to stay competitive. Just as in the case with Walmart, dealers are forced to react to market conditions and respond accordingly. But unlike the Walmart example, tire dealers should make every effort not to abandon their position of selling high quality products of measurable value to their customers. Though the current dynamic is one of “cheaper is better”, the forward thinking cost per hour and cost per mile customer should neither be abandoned nor overlooked. Sure, we realize that a good portion of the market base predicates their buying habits strictly on price but acceptable profit margins can only be obtained by concentrating sales efforts over the entire market base.

We’ve all seen the ads “fill tires for 35 cents a pound.” and some fill dealers have seen this as an opportunity to increase profits. What is often overlooked in this seemingly attractive promotion are the missing elements of residual costs that go unmentioned. These other real costs include high initial investment, continuous expensive service and equipment maintenance, lower productivity and last but not least decreased tire performance. Yes, there may be a cost advantage over competition for the moment, but what happens when these same competitors decide to enter the price game also. The answer is simple; everyone sells for a lot less – lower revenues, lower margins and lower profits. The reality is that many end-users are willing to pay a premium for flat-free tire performance because they know a quality flat-free tire should maintain warranty and last until 100% of the tread has been used supplying the designed mileage or hours. A simple analysis of your scrap pile will tell you whether your flatproofed tires are providing this value. (To learn more about the differences between virgin and chunk/granulated fill, contact your Arnco representative for a copy of our informative white paper.)

It takes a great deal of time to build relationships with customers. To many of them you are their “trusted advisors” when it comes to selecting the right tire and fill for their application. Let’s not forget the importance of selling value and not price. Your service, your knowledge and the quality of the brand products that you represent let your customers know that your total package is truly the best value that money can buy. As Arnco dealers you represent the best brand of tire flatproofing in the world .Arnco RePneu is used in the most difficult of applications and is the gold standard in underground mining; Arnco SuperFlex is still the best product that rides like air and leads all low durometer material in OE equipment approvals. Arnco products deliver the highest in performance and value for your customers.

Our acclaimed Arnco University is available to enable your sales force to provide the most professional presentation of your flatproofing services and products.. Ask your Arnco sales representative how to schedule an Arnco U. session for your sales team today.

Sincerely,

Larry Carapellotti

For further information, call 800-821-4147, or visit the newly designed Arnco website at www.arnconet.com