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Amazon Is Getting Into the Tire Business

Used car tires form a pattern as they are seen stacked outside an automotive shop in East Dulwich, south LondonUsed car tires form a pattern as they are seen stacked outside an automotive shop in East Dulwich, south London

Amazon.com Inc. has formalized a tire-installation partnership with Monro Inc., with the car-maintenance chain expecting to make the same profits from the e-commerce giant as it does with other online retailers.

Monro will initially offer tire-installation services to Amazon customers in the Baltimore area before expanding to more than 1,170 stores across 27 eastern states, the Rochester, New York-based company said in a statement Thursday. The company, which offers similar services to customers of online sellers Tire Rack Inc. and TireBuyer.com, said the Amazon deal furthers its goal to capture more e-commerce business.

Monro makes about $120 per installation for an Amazon customer, compared with a company average of above $160, Chief Financial Officer Brian D’Ambrosia said on a call with analysts. He said the partnership is still in “early innings.”

“We have no reason to believe that the economics on the Amazon relationship will be dissimilar to what we’re currently experiencing with other online partners,” D’Ambrosia said.

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About half of the traffic Amazon brings in are first-time customers for Monro, and the majority are car enthusiasts, according to the company.