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How Big is the Tire Industry?

Tire sales totaled $37.3 billion in 2013 — and tire sales are just part of what Big O Tires offers

In 2013, $37.3 billion worth of replacement tires were sold in the United States, according to industry trade publication Modern Tire Dealer. Americans drove 2.98 trillion miles in 2013, according to the U.S. Department of Transportation.

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The business opportunity is huge

Kevin Brooks, who owns eight Big O Tires stores in Colorado’s Western Slope, is an accountant by trade, and before Big O, he spent six years in the tax business, staring at the books of a variety of companies and learning how to spot opportunities. He got an in-depth look at Big O’s books when a franchisee hired him to help manage the finances of three stores. Even though he didn’t have any automotive experience — “I can’t change a tire, and I’ve never tried. The guys give me a hard time about it!” — when he got the chance, he didn’t hesitate to buy his first stores in 1990.

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“I didn’t know until I’d been there a while how big the opportunity is,” he says. “Everybody has to buy tires, change their oil and service their vehicle. We just have to do it better than the guy down the street. In today’s economy, there aren’t a lot of businesses where you have something that people have to have. I told my wife when we bought our first stores, ‘We just won the lottery,’ and that’s how I’ve felt ever since.”

The price range for a new set of tires can vary widely depending on whether a customer is buying economy tires, top-of-the-line brand name tires, or Big O brand tires with our patented designs and unsurpassed warranties. On average, though, customers in 2012 spent about $550 on a set of four new tires at Big O. According to R.L. Polk & Co., the average American vehicle has been on the road for about 11 years, which at an average drive of 15,000 miles a year puts the odometer around 165,000 miles. That generally equals four new sets of tires.

Take a look at any decent-sized parking lot. For every 100 cars you see, 11 years worth of tire changes represents $220,000 in revenue. There are about 240 million vehicles in the United States. What’s the value of the tires that are likely to be sold over an 11-year-span for those vehicles? $528 billion.

As big as the tire industry is, it’s worth noting that tire sales make up about 60% of Big O’s business. We also offer customers oil changes, brake and transmission fluid changes, new belts, batteries, brake work, alignments, and suspension service. But tire sales and our commitment to customer service are key to earning other types of business.

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