It seems there is no end to how much a distribution channel can be collapsed. Now consumers can buy tires directly online without the need for a tire store. Tirerack.com offers more selection than a typical tire store as they are not affiliated with any one brand such as Goodyear or Firestone. The handy-sized tires can be shipped directly to your home or a recommended installer. You might think that a tire is to heavy and bulky to ship via UPS, but Tirerack.com is making the direct-to-consumer business model work. The company is growing in a shrinking vertical market.
Interestingly, Tirerack has adeptly wrestled control of the customer away from the tire retailer through a recommended installer webpage (shown below). Traditionally, the consumer picked a tire retailer, who in turn recommended the brand of tire. The tire retailer exerted significant control over the brand of tires being purchased. With TireRack’s business model, instead of the tire installer recommending a brand of tire to the consumer, now the tire seller is recommending the tire retailer. It should be interesting to see if this power-play works. As you can see from the web screenshot, Tirerack is not a front for any one tire company or installer. Effectively, Tirerack.com is an online business model of a traditional tire wholesaler. Through effective use of the internet, Tirerack has expanded their reach from regional distributor to national distributor.
Kudos to Tirerack for constantly adapting their business model with the times. The company began in 1979 with a tradition tire store business model. In 1982 they morphed their business model to run small classified ads for consumer direct tire sales. In 1996, they changed to a web business model and launched what is now Tirerack.com
Keep an eye open for other brick and mortar distributors moving to a direct-to-consumer business model. Other examples of this business model include: Amazon, Zappos, and Hong Kong tailors who ship custom-made clothing direct to your home.
