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Doug Miller is President of St. Lucie Battery & Tire, which has 15 locations on the central east coast of Florida. He has taken over operations from his father, Joey — the company’s founder. Doug looks to expand St. Lucie Battery & Tire, which has been in business for over fifty years, focusing on integrity and serving the community with honesty and reliability.
In this episode…
Are you a tire and auto repair shop owner whose business has been affected by the pandemic or supply chain issues in today’s economy? Are you taking a lean approach to inventory, or are you heavy on inventory? If these are scenarios you deal with regularly, you’ll want to hear this episode of the Gain Traction podcast!
In this episode of Gain Traction, Mike Edge welcomes Doug Miller for a wide-ranging conversation about the issues facing auto repair, battery, and tire shops in today’s marketplace. Doug talks about how St. Lucie Battery & Tire has survived a fire, navigated its way through the pandemic, and overcome supply chain issues that are common throughout the industry. He also shares how long-term customer relationships can become your best marketing source. You’re sure to learn something from this discussion!
Here’s a glimpse of what you’ll learn:
- Doug Miller shares how he broke into the automotive industry when he was 19 years old
- Why Doug’s father, Joey Miller, started St. Lucie Battery & Tire by selling batteries out of a chicken barn
- How the pandemic affected operations at St. Lucie Battery & Tire
- Where Doug sees the current market with heightened inflation and supply chain issues
- Why it helps a tire and battery shop to be heavy on inventory
- Surefire ways to build long-term relationships with customers
- How St. Lucie Battery & Tire ensures that word-of-mouth is their best marketing method
Resources mentioned in this episode:
Transcript
Announcer:
Welcome to the Gain Traction Podcast, where we feature top automotive entrepreneurs and experts and share their inspiring stories. Now, let’s get started with the show.
Mike Edge:
Welcome to the Gain Traction Podcast, Mike Edge here. I am the host of Gain Traction, where I talk with top automotive business leaders about their journeys and experiences in the tire and auto repair industry. Before I begin, I’d like to give a shout out to Paul Hosage, who operates a mobile tire franchise, Tire Connection. It is extraordinary because he is now taking the approach on how to help shops expand, less extensively, via a mobile way.
Mike:
This episode is brought to you by Tread Partners and the ReTread Program. Tread Partners has designed a product called ReTread that is a full scale re-engagement program to win back previous customers. It is a one time, 90 day program, that generates a guaranteed 10 to 1 return from your old customers. That is correct. A 10 to 1, guaranteed ROI, no tricks or gimmicks. Hey, it’s your customers, we just get them back inside your shop for you, so what are you waiting for? Contact us at [email protected] or just the website treadpartners.com.
Mike:
So today’s guest is Doug Miller. Doug Miller is President of St. Lucie Battery and tire, which has 15 locations on the Central East Coast of Florida. Doug, welcome to the program.
Doug Miller:
Thank you for having me, sir.
Mike:
Glad to have you. Well, let’s start out with this because I’m sure a lot of our listeners have read the news. You guys had a fire recently. Everybody’s safe and sound. how’d that shake out for you guys?
Doug:
Oh yeah, a friend of mine told me, “Never let a crisis go to waste.” So we’re using it as a learning experience to better the way we do things and increase the levels of safety and loss prevention within our business. It’s a culture to maintain a safe environment and we’ve worked hard at it and, fortunately, it was a accident that something that doesn’t happen quite often around here, we focus on safety to a very high level.
Mike:
Now you’ve not had an accident like this in the 50 years, correct?
Doug:
Nothing to this magnitude, no.
Mike:
No.
Doug:
The worst fire before that was, we’ve had a couple of electrical shorts in customer vehicles over the last 25 years or so, but that’s minor compared to what we’ve had recently.
Mike:
Well, and from my understanding everybody’s safe.
Doug:
Oh absolutely. No one hurt. Property can be replaced. The tires that happened to be damaged, the batteries that happened to be damaged, can all be replaced. Fortunately, the fire started at somewhere around 4:30 in the morning, the fire department was here by about 4:48, I believe the call report said, so they were here in less than 20 minutes and that that was having to… We actually have the fire boxes at our main entrance, but due to the size of the trucks they brought, they had to come through our commercial gate and it’s quite a bit away from our main entry, so there was no fire box there. So they had to break the lock and get in.
Doug:
I was actually out of town, so I have to thank my nephew because he’s got a couple buddies on the fire department, so they called him directly. He was here moments behind them and basically told them, “Do whatever you got to do to get this fire put out.”
Mike:
That’s awesome. Well, I’m glad. I mean, like you said, if no one got hurt, then anything else could be replaced and all can be well, and like you said, there’s opportunities to learn there. Well, let’s go in a few little questions about, you’re starting this business. Obviously, you grew up in it. How did you like that, growing up in the business? Did you know you wanted to stay in it, or were you one of those guys that left for a little bit and decided that you missed it or something?
Doug:
I really never did much of anything other than what I do, than work here. I did some underground construction while I was going to school, but nah, it wasn’t for me. That end of the shovel doesn’t work out too well over the long haul. So I did a couple of years of community college and then my dad asked me if I wanted to help him at a store and I accepted, and that was it, just before I turned 19, I believe, and I’ve been at it for different levels, since then.
Mike:
Yeah. That’s awesome. Well, I mean, I think I told you before the show and I appreciate you doing this podcast, but, I mean, I love family businesses. I love seeing them survive. So what do you feel like gives you guys the distinct advantage or staying power in your markets for -[inaudible 00:05:52] tire?
Doug:
Well, just a little bit of background on us. My dad started his business over 50 years ago out of my grandparents’ chicken barn. They were in the poultry business, so he started selling batteries and tires out of-
Mike:
What a combination.
Doug:
Yeah. It was pretty different. When my dad built his first real tire store in 1976, their little fresh egg convenience store was right next door.
Mike:
Okay.
Doug:
And so my family has actually owned the property where our headquarters is since 1944.
Mike:
Okay. That’s pretty cool.
Doug:
Okay, so really it’s work ethic. What I feel like keeps us competitive, is work ethic. It’s commitment to bringing value to the customers, being honest with them and it’s a long term play. It’s not what can you make today, it’s about be fair with the customer, they return and, you do what they need, and you be honest with them. Never oversell, and create a level of trust with your customers that they just show up and know that they’re going to get a fair price, good service, and you’re going to stand behind the work and the products that you sell them.
Mike:
Well, and probably, just that kind of reputation helped you through situations like COVID. I think that was a, even though you guys got to be considered an essential, still times slowed down in a lot of areas. Probably not as much in Florida though, you guys stayed pretty open, didn’t you?
Doug:
Oh yeah. Yeah. I mean, on the consumer side, I mean, it was almost like the faucet shut off.
Mike:
Yeah.
Doug:
It was crazy. I mean, we kept all of our consumer service personnel employed and earning a living wage and that was our commitment to our people. So I think us being committed to our employees and their wellbeing always plays a hand into your long term success. And the commercial business, the logistics, and all the online ordering and stuff, we enjoy a little bit of both, a little bit of that market share. So we were busy. We were busy on the light commercial and the full commercial side, because that stuff never slowed up necessarily in the essential part. It actually created some opportunities because we were here, and so there was essential services that required service and their normal providers weren’t open to provide it, so I would say we came through it stronger than previous, just by being here for our community-
Mike:
That’s awesome
Doug:
… businesses. And the businesses, the consumers, the essential service type, even in the public sector, we were here, they needed us, and it afforded us more opportunities moving forward.
Mike:
Where do you guys see the market right now with inflation and everything?
Doug:
Well-
Mike:
And plus, I guess the whole supply chain?
Doug:
Well, I really feel like, currently, that the supply chain, it’s not completely broken, but it certainly is damaged, so it takes longer to get stuff, and I think a lot of warehouses, a lot of other independents, that do buy direct and even import stuff, you don’t even really know what that stuff’s going to cost you until they call you and say, “It’s ready to ship,” and, “Oh, we need a $5,000 surcharge on that container.” Yeah, so the volatility has definitely been challenging, but we’re heavy on inventory. I mean, we’re inventory centric business. We service every sector of tire, every sector of battery.
Mike:
You guys even do ag tires.
Doug:
Oh, absolutely. We do everything. I mean, golf cart, lawnmower, side by side.
Mike:
Love it.
Doug:
Everything, but motorcycle and bicycle-
Mike:
Okay.
Doug:
… pretty much. So we have always been an inventory. Our model has always included an extraordinary amount of inventory. We didn’t have it, my dad always wanted to make sure we had it, and sometimes, way too many, but we had it.
Mike:
I mean, that’s got to be tough to keep that much inventory all the time, but I would say that it’s also very extremely helpful in your sales just to have it on hand.
Doug:
Yeah, because for the most part, our customers aren’t tire guys. They don’t look at their tires and, I’m sure there’s a lot of us guys out there that can relate, , family show or, or, , mom or dad shows up on Friday because they need a safety inspection for a 700 or 800 mile trip, and they come in the shop at 2:30 and their tires are completely shot and they plan to leave the next day.
Mike:
Yeah.
Doug:
I feel like we do our best, through our own central distribution and being able to move product from one location to another efficiently, to make sure we get that customer taken care of and we fill their needs and when you commit to doing that, it makes the pursuit of new customers a lot easier, because word of mouth still is your best way to-
Mike:
Yeah, no doubt about it.
Doug:
That service, fair pricing, things like that, and people share, and people like to buy their stuff and get their car automotive needs or whatever kind of tire or battery needs, and they want to have confidence in the people that’s doing their service and standing behind the stuff.
Mike:
Well, it goes to the philosophy that you said earlier, you’re in it for the long game, and when people know that about you, especially if you’ve made an investment like that, first of all, you do it with your employees, but then you’ve done it with your inventory. I think it says a lot because how many companies want to run lean and mean today and have just in time delivery and everything. It’s more, in a way, and I’ve never thought about it this way, but in a way that’s more about thinking about the company than it is thinking about the customer. I mean, by you guys making the investment in the inventory, it’s not like a big banner out front saying, “Hey, we care about you more,” but they feel it from the word of mouth and their own experience that, “Man, these guys, I’m always able to go in and I get it today. I don’t have to bring the car back tomorrow for them to get the tire.”
Doug:
Well, lost track of my thoughts there for a second, but-
Mike:
Well, just talking about the customer service aspect of it.
Doug:
Inventory, not to say that we don’t face those same inventory challenges, but through COVID and through the supply chain disruptions, there’s been a pretty significant level of benefit, not just in creating opportunities to make sure the customer gets taken care of and that you have product to service the customer, there’s been some, as you guys all know, significant inflation in our industry. I mean, if you have tires that you bought four or five months ago, they’re still fresh. It’s not like you’ve got dated DOT numbers, but there may be an extra 12, 15% in profitability on the table for you there. So, I mean, honestly, we’ve been able to capture a fair amount of that, and it’s not being malicious or bad to our customers, it’s just being market based. It’s capturing the available profit without exploiting the customer and the whole lean and mean thing probably hasn’t worked out real well for a lot of dealers in the last couple years,
Mike:
Oh, no, man, I think it’s been brutal. I think if anything, and just touching on our culture and country as a whole, we as a nation need to be more integrated just for security reasons.
Doug:
Absolutely.
Mike:
I mean, waiting on that supply chain from other parts of the world is something that we’ve all discovered is very dangerous. Hopefully that’s being remedied to some magnitude. But yeah, definitely, I don’t know why Doug, but just it’s hit me more in realizing how customer service oriented it is to be invested in an inventory. I mean, I know when things run perfect in life, the just in time inventory sounds great, but in reality, everything has to click perfect for you.
Doug:
Yeah. I think there’s a balance. There’s definitely a balance of just in time. I mean, we’re ridiculous on the inventory side right now, but anyone of your listeners that are in the commercial business, that market is more heavily infiltrated by the imported products than… At least in our marketplace, that’s a big piece of the usage, and especially with the premium brand shortages, I mean, it’s pushed a lot of tier two customers down into the tier three and even lower marketplace because of multiple factors. Cost escalation and just lack of availability. So, I mean, if your truck’s got a roll and the only thing available is an imported tire, it is what it is. Because I think everyone is well aware of the supply disruptions and how it’s affecting, especially on the commercial side,
Mike:
Well, it’s forced flexibility on the buying side. You just got to be more flexible. You don’t have a choice.
Doug:
Absolutely. I’m kind of following my dad’s playbook. He always had inventory, he was always looking at ways to entice the customer, to be a, somewhat, long term relationship, where that’s what we’re looking for, long term relationship, how do we build that? And it was through value added services after the sale, and he did a great job at developing on that, on the consumer side and always just being… Well, it keeps you out of the price game, basically, you buy the long term value.
Mike:
I totally see that, big time. I get it and it’s you’ve been eye opening for me in just recognizing that because I mean, most of the dealers that I talk to, and it’s nationwide, I mean, no one seems to stock as much as you guys seem to. But there’s a great philosophy with that for the long game and I like the long game. I mean, it’s stable. Let me ask you you another question.
Doug:
One of the struggles with that too, Mike, is you have find the right bank.
Mike:
Right.
Doug:
If you want to invest in the way we do business, it takes some work to find the right financial institution that believes in your model, especially in these extraordinary times, I mean, we’re probably literally only at about three to four turns on our inventory currently.
Mike:
Okay.
Doug:
So that’s way outside what a normal bank would go at. That’s customary ways of doing business. I know it’s not, but you can’t argue with the net effect of it.
Mike:
No, that’s what I’m saying. That’s what I’m grasping. For the listeners out there, it may be a tough play on the initial side, but the long term play is extremely beneficial, not only for you guys, but for your customers. And it is a tough decision to do when you go down that road and your dad obviously decided at an early stage, but at any given time, you could probably find it tough and decide, maybe you’ll want to step off of that path. But the reality is long term, it’s been proven for you guys to be very safe and stable and then your customers feel the same way. You’re reliable.
Doug:
Well, I’ve been at the helm for about 15 years now basically, and in the beginning and in different phases, I try to find my own identity on the operational, on the structure of the business and how do you manage your finances and things like that, so I tried. I tried the 9, 10 turn thing, and I really think I’d rather be inventory heavy, or a little heavier. I don’t want to be exactly where I’m at, but this particular marketplace, I feel like I’m in a good position, but in normal times it’s a ridiculous amount of inventory. But my comfort zone is six turns. And Because we’re so diverse, as far as everything, all the different things that we do, ag tires might only be four turns, but consumer side might be 10.
Mike:
Yeah.
Doug:
About six turns is where we’re comfortable, so we could literally pull, and I don’t know what the dollar figures are going to be by the time all this inflation is done, but as far as… I feel like if it was apples to apples, we can really run with 30 or 40% less inventory than we’re holding currently.
Mike:
I gotcha. Let ask you one more question, do you guys see yourselves expanding either by acquisition or Greenfield?
Doug:
Yeah, absolutely. I’m actually in process of expanding a quick lube center that we bought a few years back and we’ve solidified our position in the marketplace and the customer flow and the population calls for a full service center, so we’re in permitting for that. And we just acquired another single store operation in our marketplace, we closed a couple of months ago.
Mike:
Okay.
Doug:
We plan to continue our growth pattern strategically, opportunistically, but it’s not like we’re going to run out and open 20 stores next year, but we will follow the path of growth and filling up our marketplace where we see a need and our customers need us. So we’re going to continue to grow, and I don’t want to take over the world. I want be a significant player in our marketplace and continue to service our community, and that’s our goal.
Mike:
I like it. I think that’s outstanding. Well, let me ask you a final question here. We’re up on our timeframe, actually gone a little bit longer, but what is your favorite book of all time, that’s influenced you? Even a recent read, something that’s moved you.
Doug:
I’m not big at reading. I do enough reading and going reports and things like that at work, but young in my career, my dad gave me the Les Schwab book, Pride in Performance, and not to say that I modeled my whole career off of that book, but it certainly opened my eyes to creative ways of rewarding staff, staying focused on our brand and our brand creation instead of letting… And I’m not mad at the manufacturers now, but none of us independence can survive selling one brand of tire, so who gets the biggest sign? In our business, I know who gets the biggest sign. We get the biggest sign.
Mike:
Yeah.
Doug:
And no one goes on our sign with us.
Mike:
Okay.
Doug:
We don’t share our branding with anyone, and we appreciate our direct relationships and the value that they bring us, but our brand is our brand. We don’t do anything to degrade their branding,, and we don’t add them to our brand.
Mike:
Doug, I like that. I think that’s fabulous. Well, I want to thank you for being on the Gain Traction Podcast. It’s been a pleasure, and to all our listeners, thank you for being a part of our podcast. If you would like to recommend a guest in the future, please email me at [email protected]. ‘Til next time, be safe and have a great day.
Doug:
All right. Thanks a lot, Mike.
Announcer:
Thanks for listening to the Gain Traction Podcast. We’ll see you again next time and be sure to click subscribe to get future episodes.
Transcript
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