Blackcircles.com Launches Online Fleet Service

Blackcircles.com has launched a new online fleet service. As manager of Black Circles Fleet, recent appointment, Paul Collins, will be responsible for ensuring “consistent delivery and on-going innovation.” At the same time the company launched an online auction site and continues with a long-term strategy aiming at European expansion. Managing director, Mike Welch, gave Tyres & Accessories details of this growing business’ ambitious but pragmatic plans.

According to the company, the new fleet service will be available to vehicle fleets of all sizes. Furthermore, blackcircles.com/fleet is said to significantly simplify the purchase process by providing access through a web-based system. Businesses will have their own private area containing all their vehicle details and will be able to make transactions using a unique PIN number.

Blackcircles expects its announcement to be warmly welcomed by fleet managers and boasts that it has “the largest network of fitting stations of any UK tyre retailer.” Mike Welch, managing director said: “We have taken all the knowledge gained from our retail business, including all the feedback we have received from customers, and invested this in our Fleet service.
“For too long managers have had to contend with complicated systems and a lack of control. We plan to change this with a system that is far easier to use but a lot more effective. Through our unique tyre procurement process and ground-breaking delivery mechanisms, Black Circles Fleet offers forward looking business flexibility, immediacy and savings to their fleet tyre needs.”

Mike added: “Whether it’s five or 5000 vehicles, one preferred supplier or a managed matrix of tyre outlets, Black Circles Fleet can be utilised as the primary resource for tyre supply or simply as a secure back up.”

One of the UK’s leading online tyre businesses, Blackcircles says managers and small business owners will now be able to have tyres sent anywhere in the UK in as little as two hours and will be able to access the lowest prices and over 30 tyre brands.

According to Mike Welch, Blackcircles already has 8000 fleet customers. That’s all very well, but some observers would argue that there is not much room for expansion in the fleet market. Welch’s response is that, in a similar way to how the company’s consumer business is run, Black Circles Fleet will focus on the needs of the niche it currently serves with a view to expanding from this point.

“We’re not eating anyone’s dinner and we are not looking to make no profit. The Kwik-Fits and the ATSs can keep their large fleets because they don’t make any money on them,” Welch explained.

‘We just want to sell more tyres’

In spite of his confident outlook, Mike Welch is pragmatic about Blackcircles’ progress so far and its plans for the future. In his words, the company got where it is today (a 5-year-old business that became profitable in 2005 and predicts sales of £15 million in 2006) by focusing on its core customers and not overestimating what can be done with the Internet.
“People always think I am trying to put them off when I say that, but I’m not,” said Welch, adding: “The Internet is another shop front for your retail business, not the answers to all you sales problems. Selling tyres is not a traditional online business and we are not a traditional dotcom company, we are more than that.”

“Trying to win and retain customers is our priority and price alone is simply not enough to do that. It’s about service, price and satisfaction. We all say that, but do we all deliver that ‘hand-on-heart?” he continued.

Instead Blackcircles aims to add value to “the whole Blackcircles.com experience” with the announcement that it has launched a number of additional services – the company’s online fleet service and auction site (see box) being examples.

Pricing is another critical part of the business. While the company’s structure and volume purchasing power help it to keep prices down, it is about more than the lowest possible price tag.

“Being able to get a handle on retail prices is a whole lot more important – the tyre industry is a funny industry, being one of the few that is happy to sell a product and not get anything for it. This confuses customers and trains them to expect the same or less next time,” Welch comments, suggesting that appreciating the importance of profitability is central.

But no matter how it is presented as a UK retail chain with international business, Blackcircles is growing from an online foundation and not the other way around. And in order to succeed in this respect there are a number of non-traditional advertising and marketing mediums that have to be mastered.

So how many visitors does the Blackcircles website attract? Welch didn’t want to see the figure published, but he did say that visitor numbers have grown exponentially – growing by 50 per cent per quarter since the beginning. Conversions, the rate at which visitors become customers is also on the up.
Online marketing is an area that Welch, by his own admission, really ought to know a bit about. “Its all about gaining the right balance between traditional and other mediums. PR is good but it doesn’t live forever.” Then there are the non standard mediums like search engine Google’s Adwords system. For Blackcircles.com “Adwords is just an expensive branding exercise.” Instead Welch says that it is all about understanding our current and future customers adding: “We are very good at that.”

However when it comes to search engine optimisation or SEO, Blackcircles employs a team that specifically work on building and maintaining the site’s search engine ranking.

A quick Internet optimisation tip – search engines ‘like’ sites that share information. For the so-called “super-geeks” behind the conception of the information super-highway, sharing information was what it was all about. This philosophy is something that still resonates through cyberspace. The problem is commerce sites go against the grain in this respect, something that makes Welch’s added value strategy all the more important. But Blackcircles’ MD has this word of warning for any company aiming to branch out into the virtual world: “You have to be careful about how you optimise. And you have to be careful about who you use to do this. You don’t want to be blacklisted.”

In addition, Blackcircles has affiliations with a number of websites that use its tyre purchasing ‘engine.’ These include some big sites like MSN, and other smaller pages.

Fitting the bill

In spite of all the interesting developments in the “virtual” side of the business, a number of its detractors claim that the business model falls down when it comes to fitting. At the end of 2005 Welch announced that the company would recruit 700 franchisees. But if tyre dealers are generally uncomfortable fitting tyres that have been purchased elsewhere, who is doing the work?

Out of the 1000 fitting stations the company works with, the majority do not offer tyre fitting as their main service. Instead these partners are likely to be the sort of service centres “that don’t have the word tyres in their name. “We have great partnerships with independent outlets and you will start to see our brand [livery] in different parts of the UK soon,” the managing director explained Blackcircles’ management says it is on-course for its target of 700 franchisees and has set itself a target of reaching 300 by the end of the first half of this year. However, Mike Welch did not want to give details of how many are currently on board. “The most important thing is that they are making profit,” he commented, adding: “We’re looking at the long-term and are not in the business of blackmailing people who work with us. I’m aiming for Blackcircles to be well-known as a retail brand”

This long-term attitude is also reflected in the way the company deals with the UK market. According to Mike Welch, Blackcircles.com invests its business back into the UK, into wholesalers and manufacturers. “We don’t buy container loads from the parallel markets. We could, and we could cut our competitors prices to pieces in the process (with all the volume we get), but we don’t. That’s just the way we have decided to do it.”

However, being loyal to the UK does not mean Welch plans for Blackcircles to be an exclusively British brand. Referring to expansion in the European market, Mike Welch concluded: ”There are opportunities [in Europe]. We want to refine our core offering. But from a brand point of view there is no reason why Blackcircles could not be the first truly pan-European tyre retail brand.” chris.anthony@77.237.250.82

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Going, going, gone

In a separate development, the online tyre business has also launched a ‘virtual auction’ website. Designed as a way of bringing cut-price quality products to the masses, the company will want to use its reputable image to shine a light on the sometimes questionable world of Internet tyre auctioning. Whether or not the site can realistically compete with global giants like eBay is another question.

“We wouldn’t say we were competing directly with eBay – eBay’s huge,” comments managing director, Mike Welch. However, Blackcircles’ auction site does have some very real advantages over that well-known auction site. Writing in India’s Rubber Asia magazine, TIC secretary Peter Taylor highlighted the disadvantages of buying tyres this way. “When it comes to buying tyres is eBay the right place?” he questioned adding: “potential buyers really do need to think twice.”

While Peter Taylor warned consumers of the dangers of buying online, running an online auction alongside an already respected business could be seen as a safer option for consumers. Taylor criticised eBay’s return policy for being at the whim of the seller, but a company like blackcircles.com could integrate auction into its existing service.

And the synergies do not end there. Secondly, and perhaps more importantly, there is the fitting network. eBay can’t claim to have a tyre fitting network when blackcircles.com and similar companies do.
However, Mike Welch is keen to point out that his company is not trying to compete with any global businesses like eBay. Instead Blackcircles’ auction site is seen as another way of enhancing the firm’s product offering. The company is in the process of negotiating with partners, but it is clear tyre shop consumables including balancing weights and other useful items such as satnav systems will be made available to both trade and consumer customers.
According to the Welch, the site was developed in response to a number of requests from its dealer network and other customers.