Astoria, NY Interview with Brian Finkelstein and

DURABLE
MAX FINKELSTEIN INC.
www.maxfinkelstein.com / Headquarters: Astoria, N.Y. / Employees: 280 / Specialty: Independent wholesale tire distribution
/ Zach Silver, co-director of sales: “It used to take years for employees to master the warehouse, now it takes just weeks for them gain the same level of expertise.”
Rolling Ahead
Wholesale tire distributor Max Finkelstein is harnessing technology to bolster its
own growth in the Northeast. BY JENNIFER HOPFINGER
Max Finkelstein Inc.’s computerized warehouse
management system is key to its success.
Y
ou can’t have a more low-
tech distribution system than
two burly men delivering tires
— two under each arm — to customers
using the New York City subway system.
But that was back in 1919. Ninety-five
years later, that same family owned and
operated company, Max Finkelstein Inc.,
still runs its wholesale tire distribution
business out of the same small storefront in Astoria, Queens — but now it
has 11 distribution centers all over the
northeastern United States and a computerized warehouse management system that tracks inventory in all of them.
www.wdimagazine.com Summer 2014
Max Finkelstein put the system in
place four years ago, and it has dramatically increased efficiency and dramatically decreased the time it takes to
train employees. “Now, we know where
everything is, at all times,” Sales Co-Director Zach Silver says. “It used to
take years for employees to master the
warehouse, now it takes just weeks for
them gain the same level of expertise.
Without it, we wouldn’t have been able
to grow the way we have in recent years
because we wouldn’t have had enough
trained workers to do it.”
The company, now in its fourth gen-
eration of family ownership, has experienced in the past 10 years the biggest
growth surge in its history, pushing it
as far north as Maine, as far south as
Maryland and further west into Pennsylvania. It has a wider array of brands
and offerings than ever before, and over
the past five years has doubled its revenue. “We’ve weathered a lot of storms in
the past decade and we haven’t had one
down year, which is pretty unique,” Sales
Co-Director Brian Finkelstein says.
In addition to a bigger geographic
footprint, the company has taken market share as the industry has consolidated and many similar family owned
independents have disappeared. “Companies like ours have strong relationships with our customers,” Finkelstein
says. “That’s what was lost in consolidation for many, and that’s what we still
have to offer and thrive upon.”
The advent of online retailers — and
the price transparency they create —
makes it impossible to compete on just
price. “These days, the price ceiling is
set and we are held to it,” Silver says.
“But we can win on service.”
Max Finkelstein is now up against large
national players and retail/wholesale hybrids. “We welcome that challenge,” Finkelstein says. “We believe that we are the
best tire distributor in our market.”
But it’s tricky to do that and grow
at the same time, according to Silver.
“The more warehouses you have, the
harder it is to keep correct inventory,
maintain efficiency and integrate those
MAX FINKELSTEIN INC.
warehouses,” he says. What’s more, if the
company has to transfer inventory from
one warehouse to another to fill an order,
it doesn’t pass those costs onto customers. “We don’t charge transfer fees or fuel
surcharges,” Silver says. “It’s our fault if
we don’t have the right product in the
right warehouse. We don’t penalize the
customers for our shortcomings.”
The company continues to adopt new
technology to address those issues. Its
next priority on that front: integrating
its inventory and customer point-ofsale systems, and it has a seven-person
IT team working on it. “This is the big
trend now in our industry and a very big
focus for us,” Silver says. “We’ve already
figured out how to talk to every POS system, but many of our customers are slow
to adopt technology. We are encouraging all of them to implement these systems because it makes things easier for
The company’s expansion has been entirely
organic, without acquisitions.
Summer 2014 www.wdimagazine.com
MAX FINKELSTEIN INC.
them and it lowers their costs. We want
them to use our warehouse as their warehouse.” Currently, about 10 percent of
its customers have integrated their POS
systems with the company.
INTERNAL GROWTH
All of Max Finkelstein’s growth has been
organic — it has never made an acquisition nor has it accepted investment
outside the family. “Our expansion has
been entirely self-funded, and we’re very
selective and strategic in our growth,”
Finkelstein says. “When we open a new
warehouse, we are looking to make it
profitable from year one. That’s just how
we do it.”
The distributor plans to open its 12th
location in Boston in the fall. But it’s unknown whether it will expand beyond the
Northeast. “Our expansion is dictated by
where manufacturers need us to go,” Silver says. Goodyear, which was Max Finkelstein’s first supplier and whose tires
currently account for 85 percent of the
product distributed by Max Finkelstein.
SUPPORTIVE SUPPLIERS
Finkelstein credits the support of Goodyear with much of the company’s suc-
“Our expansion is dictated by
where manufacturers need us.”
– Zach Silver
cess. “Goodyear has allowed us to make a
healthy profit margin so we could invest
in our business and represent the brand
in the best way possible,” Finkelstein
says. “We feel that Goodyear appreciates
our way of doing business, and it is especially shown in the many markets where
we are the main horse representing the
brand. Healthy relationships, whether
with suppliers, customers or our employees, are the key to our success.”
In addition to Goodyear, Max Finkelstein also distributes Dunlop, Kelly,
Pirelli, Kumho, Aeolus, Wind Power,
Goodride and Carlisle products. The lessons Max Finkelstein learned from its
relationship with Goodyear have translated into positive relationships with its
other suppliers, as well.
“We always try to see both sides of the
relationship,” Finkelstein says. “It has to
benefit everyone.” q
Published by Phoenix Media Corporation Tel: 312.676.1101 Fax: 312.676.1280
On behalf of Max Finkelstein Inc. © 2014 Phoenix Media Corporation. All rights reserved.