Dominic Powell
2 March 2017
Startup Smart
Online tyre specialist startup Tyroola says it hopes a partnership with retail heavyweight SuperCheap Auto will boost its reach while delivering more convenience to customers.
Tyroola, which launched in 2015, lets car owners purchase tyres of any brand online and have them fitted at a local fitting partner. The company sources tyres from over 50 suppliers and has 500 independent fitting partners across Australia.
Founder Zed Klingenberg told SmartCompany the business is on track to hit over $10 million in revenue for the current financial year.
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Klingenberg says he was “very proud” Supercheap Auto chose his business for a partnership, and his business is “deeply integrated” in the tyre industry.
“Supercheap Auto is a very strong player, but it hadn’t really entered into the tyre industry and it was looking to,” he says.
“What we were offering was a relatively complete solution on both the supplier and fitting sides so I can imagine that’s why they chose us. From our side, we’re benefiting from their huge reach.”
White label tyres leads to “significant” revenue increase
Supercheap Auto’s website receives over 2.5 million unique visitors per month, and Tyroola will be looking to benefit from that with a new white label agreement with the retailer.
Through a dedicated domain on the company’s website, customers can order white label tyres, branded as Supercheap Auto, through Tyroola’s order processing system. Tyroola pays a fee for the tyres sold through the system, and Klingenberg says the companies will work through a performance agreement.
“It works really well and it’s seen a really significant revenue increase for us,” he says.
“We’re also looking at putting marketing in-store and to have tablets where customers can order tyres.”
Tyroola’s monthly revenue is growing significantly, says Klingenberg, now approaching one million dollars every month. Klingenberg says the ability to keep the business model online has helped cut costs and provide cheaper tyres to users.
“The online business model allows us to be leaner in the cost structure than the brick and mortars businesses, not having costs such as rent, sales staff, building maintenance, warehousing, stock management and devaluation, etc., therefore allowing us to pass our efficiencies directly to the consumers,” he says.
A strategic partnership to help ship tyres
As the partnership progresses, Klingenberg says Tyroola will look to use Supercheap Auto’s “strong” logistics to ship their tyres, along with potentially using the company’s stores as pickup points for customers collecting tyres.
“It’s a strategic partnership, as they really wanted to move into the tyre business and be a larger player in tyres, whilst we already are building a strong presence in there. So why don’t we work together?” Klingenberg says.
“We’re super proud and grateful to be able to work with them.”
The partnership will also go a long way to building customer trust in Tyroola’s service says, Klingenberg.
“This is a big advantage in building customer trust for us, we put a lot of effort into getting positive reviews from customers and suppliers. The partnership will definitely help,” he says.
Looking forward, Klingenberg says Tyroola is still scaling up and is in talks with other companies to explore more partnership options.
“Customers are asking for more convenience and we hope this will deliver an enhanced experience for them. This is why we are working with Tyroola, a market leader in online tyres, to launch this new retail concept,” managing director of auto retailing at Supercheap Auto Chris Wilesmith said in a statement on the partnership.
“Customers expect the best solutions for their needs and a seamless experience, and that’s what we’re committed to delivering.”
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