More than just a distributor – TTI adding value with marketing & IT

Monday 4th April 2016 | 0 Comments
 
Car and two-wheel tyres make their way through the TTI warehouses on a 1.4 kilometre conveyor system
Car and two-wheel tyres make their way through the TTI warehouses on a 1.4 kilometre conveyor system

A point of consensus within Europe’s tyre wholesaling sector is that companies must adapt to stay competitive in a changing market environment. Each wholesaler we’ve spoken with this year is approaching this task from a slightly different angle; Tyre Trading International (TTI) is embracing technology, logistics and marketing, and is following up significant recent steps forward in these areas with continued investments.

Company owner and director Peter-Alexander van’T Hof observes that tyre wholesaling in Europe is a “battle that gets tougher every year,” and he’s convinced that companies must choose whether they’ll arm themselves for this fight or retreat to other areas of the tyre business. “Surviving in wholesale involves changing your company,” he comments. “Change is tough, but to prosper as a wholesaler you must find a way to add some value to the chain.”

TTI and Motoria

Tyre Trading International was founded in 1988 by Peter-Alexander’s father, Peter van’T Hof, and marked the van’T Hof family’s long-awaited return to the tyre industry.

“We’re four generations of tyre people,” comments Peter-Alexander van’T Hof. “Tyre repair had become such an important part of my great-grandfather’s shoemaking business that in the 1930s he opened a business called Van ‘T Hof Oil and Tyre Trade. In 1948 he established a tyre factory, the Hofka factory in Klaaswaal, not far from where we’re located today. My grandfather and father continued to develop this business until its sale to Vredestein in the 1970s. Non-competition clauses prevented them from starting a new business in the industry for a while after that, but by 1988 they were again able to.”

While TTI began as a home office business, rapid growth saw the firm move to its current site in Numansdorp in 1992. Peter-Alexander van’T Hof joined the company in 1995 and bought out his father’s shares in the business in 2006. Today, TTI belongs to TTI Holding and is the sister company of Motoria, a spare parts wholesale business the company acquired in 2013 and later merged with its motorcycle tyre wholesale operation. Most of TTI’s turnover is generated in three regions – the Benelux, Germany and France. The wholesaler has exclusive distribution rights for the Falken brand in the Netherlands and Sailun in the Benelux region and northern Germany. TTI is also a key account for Hankook and additionally distributes the Hankook second-brand, Laufenn.

These core brands are complemented by a pair of recent additions to the TTI portfolio. Since 2015 the wholesaler has distributed the SD International-produced Toledo brand and Treadsetter’s Torque house brand in the Benelux, France and Germany. “Both brands sell well,” comments the TTI director. “Sailun’s become an established brand, and it is good to be able to offer something priced a little lower – we have different customer groups who want to compete at different price levels.” Currently more than 120 individual sizes are available in the Toledo range, while the Torque portfolio boasts more than 130 sizes.

Two-wheel and Topline

Through Motoria, TTI also carries 3,840 two-wheel tyre part codes. Peter-Alexander van’T Hof comments that two-wheel is “a large part of our business” and shares that Motoria has very good relations with Vee Rubber from Thailand and Japan’s IRC (Inoue Rubber Co.). “While there’s hundreds of car tyre wholesalers in Europe, there’s probably only ten different wholesalers with a similar two-wheel specialty.”

In addition to parts and two-wheel tyre wholesale, Motoria will soon distribute a line of products under the company’s own brand name, Topline. “One of the first products we’re developing is a mousse for motorcycle tyres, to replace air inflation during non-highway use. We’re also developing a line of oil, first for motorcycle applications and then for cars. We have covers for motorcycles. Slowly we’re trying to build up a range of products.”

Van’T Hof shares that TTI began the process of change after first witnessing winter tyre availability issues in 2010/11 and then seeing wholesalers struggle to shift stocks during the mild winter a year later; the company realised that wholesalers were overly dependent upon estimating market volumes, and it saw an urgent need to reduce per-tyre costs. He adds that the changes made involved a lot of hard work, but have equipped the 28-year old company for today’s challenges.

Logistics and marketing the main thing

These changes have seen the wholesaler’s focus shift away from a sales-driven approach to one where marketing, IT and logistics play an important role. While Peter-Alexander shares that 2015 was a good year for the company, the positive result it enjoyed came on the back of a lot of hard work and investments, both in warehousing and in IT.

Peter-Alexander van’T Hof has headed TTI since 2006

At the heart of TTI’s in-warehouse logistics is a 1.4 kilometre long conveyor system that entered operation in January 2010 and winds its way through the wholesaler’s two warehouses in Numansdorp, the Netherlands. Peter-Alexander says the system, which can handle up to 400 different small orders per hour, is “very efficient.” It is being extended into the company’s newest warehouse, which will be finished by the end of April and replaces one of the two warehouse facilities that TTI currently rents. The other will most likely be replaced by a custom-built warehouse in the coming three to four years, the TTI director adds.

Marketing has come into its own as a significant focus for TTI, and is handled by a dedicated team. Peter-Alexander notes that while the largest tyre manufacturers take care of their own marketing requirements very effectively, smaller and less-stablished brands require help to gain a local market presence. “They need wholesale companies for more than just distribution, they need wholesalers to look after their marketing. Otherwise they can’t make a connection with end consumers.” He adds that this role, which TTI has taken on for several brands, is of particular importance in markets where tyre majors own or control a high percentage of tyre retail outlets.

TTI’s marketing activities are backed up by in-house solutions produced by the wholesaler’s five-person IT team. During the first quarter of this year, the team rolled out a new webshop and website. The TTI webshop went live at the start of March 2016, and the website a month earlier. “They’ve made the website completely different from and much better than the old site. All aspects of it are search engine optimised,” comments Peter-Alexander. “We’re now a lot easier to find and we’re getting requests from all over the world. The whole website has been designed based on SEO technology – we didn’t just add some keywords to help Google find us, we worked out the rules Google works by and built the site according to this. Every aspect was properly done.” The new website is currently available in Dutch; a German-language version will go online in May and will be followed by French and English sites.

Developing a new online model

Peter-Alexander van’T Hof says having an in-house IT team allows for a more rapid response to end user needs; in addition to producing solutions that combine marketing and IT, such as end user apps and games developed together with tyre makers, the team is behind a new partnership that TTI has prepared for its customers.

New warehouse and office space will be finished by the end of April

“We’ve developed a webshop partnership with our customers,” he explains. “We offer them a webshop that is designed to look and feel like the customer’s own shop, and we share online profits. While tyre dealers typically only make money on the mounting fee from online sales, this model shares online profits.”

With its webshop partnership, TTI believes it has come up with a model that provides an antidote to online portals. “We can’t go back to the wholesale environment of ten or 20 years ago, so we need to find an acceptable way forward for wholesalers and retailers within today’s market,” states Peter-Alexander van’T Hof. “There’s no future in a business model that sucks the profit margin out of the market. We need a model that offers wholesalers and retailers some profit margin, and this may be it.”

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