Commercial Tires Will Eat Your Margins — Here’s What to Look Out For

Insights: 

Thinking about carrying 11R22.5 tires? Here’s what other owners say you need to know first: Disposal fees don’t look scary…until they all hit at once and destroy your margins. Inventory and cash flow get a lot more complicated, fast. 

Hunter’s shop has been providing light- and medium-duty tires for customers for a long time, and everything’s been dandy. Until recently, when customers started asking for 11R22.5 tires — the big, commercial-grade tires you’d find on a semi.

Hunter is open to the prospect, and the plan is to stick with the usual 30% markup.

There’s just one problem: the disposal fees. You know, those pesky charges for properly removing and recycling old tires…which tend to hit harder with heavy-duty sizes thanks to their weight and volume. They can also snowball, eventually reaching their final form as a huge, unexpected expense. 

Hunter’s shop got burned by that before. This time, he wants to make sure those costs are accounted for upfront instead of hitting the shop like a ton of bricks come pickup day. 

Lots of shop owners probably face this exact same problem. Fortunately, Hunter had a community of experienced shop owners ready to offer advice.  

Disposal Fees Will Sneak Up On You

If there’s one thing everyone in the thread agreed on, it’s this: Don’t mess around with disposal. 

“Commercial rubber can eat your margins fast if you aren’t prepared,” said Peter C. Most shop owners posting in the community charge disposal fees upfront — every time — because as Hunter discovered, those costs will stack up like zombies outside a lone survivor’s car. 

Some also pointed out that it’s worth checking with your tire vendors. As Luke T. advised, certain manufacturers may waive disposal fees if you commit all your takeoffs to them. 

Others gave him straight math: “In our area, disposal is $15–$20 for disposal of 22.5 tires,” Dylan P. said. “We charge $20 [for] disposal and make a few bucks off the top.” 

Inventory And Cash Flow Can Bite You…Hard

Here is the truth behind bigger tires: they cost more dollars and take up more space. And if you’re not careful, they’ll sit there doing absolutely nothing, effectively tying up your money in rubber.

“These get expensive quick,” said Ashley S. 

Once you start stocking 11R22.5s, you’re not just selling tires. You’re managing inventory turns, vendor terms, and sometimes even (gulp) financing costs if those tires end up hanging around. 

Basically, if you’re going to stock these bigger tires, you need a plan to move them, whether that’s a fleet contract or some other work. “My customers want them” may be a good reason to look into something, but, as Jamie I. pointed out, “[Give] your customers what they need, not what they ask for.” 

In other words, make sure those 22s are the right investment to make, for your cash flow and your customers.

There’s Even More Tire Advice In The Diesel Community

Want to know even more about commercial tires and how to dispose of them? Hunter’s thread is packed with vendor strategies, pricing structures, and details about how shops are actually handling service calls. All of it free, all of it from shop owners who have been there before. 

Jump in and share your own advice, or see what else is getting revved up in the Diesel Community!