Dan The Tire Man Launches Marketplace to Compete with eBay

Can a new marketplace aimed at automotive tires, wheels and accessories really challenge eBay?

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DanTheTireMan.com announced they have expanded their online tire and wheel store into a marketplace trying to do just that.

“People wondering what to do with that old set of tires and wheels collecting dust in the garage can now turn it into cash online without paying an upfront listing fee,” the company said in its press release.

Dan The Tire Man’s business model includes offering financing options for people with credit problems through two partnerships the company has with Snap Finance and Progressive Leasing.

These finance programs allow the company to offer flexible payment programs to customers starting from $0 to $49 out of pocket without a hard credit check at the time of purchase.

“Many people live paycheck to paycheck and they just don’t have the cash upfront to purchase new tires when they need them. This program is great for those folks who may have bad credit or are short on cash and need the tires now versus waiting until they can afford them. And since there’s no hard credit check, their credit score won’t be affected.”

Katie Marsh, co-owner of Dan The Tire Man

Buyers can also make purchases with a credit card, just like at any other marketplace. But the company’s website clearly focuses on the subprime market.

Dan The Tire Man Targeting eBay Sellers

Dan The Tire Man isn’t shy about who they want to list on their marketplace. They are looking for sellers that are disgruntled with eBay and searching for an alternative platform to sell their goods.

“eBay charges sellers a listing fee whether or not items sell. You can imagine how costly that is for sellers who do bulk uploads. Dan The Tire Man just charges the customer a nominal commission only when the item sells,” said Dan Marsh, co-owner of Dan The Tire Man.

“This marketplace allows large sellers and individuals to list items, new or used, and pair their offerings with the No Credit Needed lease-to-own programs. No other marketplace offers this.”

“We have tens of thousands of visitors to our website monthly who are specifically looking to buy tires, wheels and automotive accessories but most don’t have the cash to do it so they use our financing programs,” added Marsh.

Promising Idea

The primary customer for Dan The Tire Man appears to be one that has credit issues and therefore cannot easily participate in the digital economy.

This type of buyer (subprime buyer) pays a much higher final price than many people would after adding finance costs. In many cases, these buyers pay back the loan through automatic payments deducted from their checking account on their scheduled pay days.

These are not traditional loans, they are technically known as lease-to-own or rent-to-own finance programs. Some people may be familiar with this concept through national home furnishings retailer Aaron’s which offers brand name items through lease and rental programs.

But this business concept is not new to tires and wheels. National retailer Rent-a-Wheel (RAW) launched this idea in 1996 and now has over 136 locations in 15 states.

Dan The Tire Man is taking the rent-to-own tire and wheel business concept further by bringing it online through a marketplace. Targeting what seems to be an underserved buyer community online is a niche and smart idea.

However, what is missing from the Dan The Tire Man press announcement is any information about funding that could help market and expand the marketplace quicker.

It appears the company simply expanded its eCommerce website to enable third-party sellers to list products and will continue to rely on its “tens of thousands of visitors” to build the marketplace side.

Nothing wrong with bootstrapping. But building something today that can eventually compete with larger marketplaces like eBay without funding is a tall task.

If Tire Rack announced they would get into building a wheels, tires, and parts online marketplace, that might be something that would worry the folks in San Jose (eBay HQ).

But it’s doubtful that Dan The Tire Man’s marketplace is causing eBay execs to lose any sleep today and they have bigger competitors to worry about for now.

eBay has said that this year Parts & Accessories (P&A) will be a focus category for them. Actually, it’s more like a refocus as the marketplace at one time was effectively THE dominant online player in that category.

The company still ranks as one of the top online destinations for P&A. However, Amazon and other eCommerce companies have nibbled away at eBay’s P&A business over the past decade. That’s where eBay is placing its refocus to avoid losing more in P&A than they have.

So where does Dan The Tire Man fit into all of this? It’s really a very small company trying to carve out a niche with buyers that need help financing their purchases through non-traditional means.

While Buy Now, Pay Later companies like Afterpay and Klarna also service this buyer group somewhat, it’s usually on much shorter terms.

The Dan The Tire Man’s seller terms and conditions page is very simplistic and void of many areas normally covered by marketplaces such as fees and how they will handle buyer/seller disputes.

On fees, there is vague language saying “an administrative fee to the final list price for the buyer.” What is the fee?

While it may technically be “added” to the final price being shown to a buyer, it would be beneficial for sellers to know what this fee is so they can price their products accordingly.

On Facebook announcing the marketplace early, the company reminds sellers to include the shipping price. That is also not mentioned in the terms on the site or the press announcement.

Dan The Tire Man does mention that payouts will occur within 24 hours via PayPal or ACH bank transfer, Monday through Friday. So, fast payout is a big plus here and something that may entice eBay sellers that still feel frustrated with eBay Managed Payments.

However, there are a few user experience (UX) features typical for an online marketplace that appear to be missing.

For example, there is no way to find items by seller user names, no indication of who is selling an item, the company itself or a marketplace seller, no contact a buyer for questions button, no shipping or delivery estimates on listings, and no “Year, Make, Model” (YYM) filtering to help buyers find the right parts for their vehicle.

Maybe some of the missing UX items are hidden by the software powering the marketplace section because there are no seller listings yet?

My Initial Thoughts

I like the category, the niche of targeting buyers with credit issues that are not typically served by other online marketplaces, and the promise of fast payouts.

Dan The Tire Man appears to be bootstrapping this launch. That is very different from what we see today in our inbox. Too many companies sent us press releases about how much money they raised, and then we never see or hear from them again.

But ultimately, some funding is going to be needed to take the idea to the next level. I can’t see how existing traffic alone can grow the marketplace to reach vibrancy (to steal a term from Etsy CTO Rachel Glaser discussing what it takes to grow a marketplace). 

On one hand, I like the simplicity of Dan The Tire Man’s selling policies. Have you read eBay’s terms lately…?

But here again, a bit more detail should be included to give more information to prospective sellers on how disputes are handled such as claims of non-delivery, missing items, lost or damaged items, refused/returned items, etc. An online marketplace will inevitably have to deal with disputes between buyers and sellers.

Many years ago, I sold parts in the P&A category, but mostly performance parts. We did sell springs and shocks that could fit a primarily wheel and tire focused marketplace such as Dan The Tire Man.

If I were in that business today, I would seriously give it a try with a few popular items to see if the marketplace could generate some results.

But I also would consider that I am on a marketplace that retails.

Like Amazon, if you have something that sells well, you are revealing your success to the company that is still primarily an online retailer, not a pure marketplace.

Interested sellers can go to Dan The Tire Man’s website to learn more about selling on the marketplace.

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