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Re Rental is NOT failure: 7 reasons to Re-rent.

"You are FAILING as a rental store if you have to rent a piece of equipment from a competitor!"

This was a comment I recently heard from a veteran counter person. They felt that having to offer someone else's equipment to their customer was equivalent to losing the order!

In my opinion, the comment couldn't be further from the truth.

Re renting (AKA sub renting) is a legitimate strategy for everyone from new start ups to stalwarts of the industry. By renting at a discounted rate (typically 20%), you can satisfy demand and still realize profit.

So when would a "re rental" make good business sense:

#1 - CASH or CAPEX is limited or restricted

It happens to every rental house at some point.

For a privately held company, cash is needed for other expenditures and not available for a big purchase.

For a publicly traded company, your budget or CAPEX has been maxed out.

By re renting you can still provide a solution.

#2 - No technical expertise

You know what piece of equipment is the right solution but you don't have the mechanic, parts or training to provide the level of service your customer deserves. Re renting allows you to supply the piece with the support of the other rental house.

This is usually true for rentals from specialty rental houses. An example might be a Poly B Fusion welder or a large tent rental.

Get a pro in your corner. Your customer will appreciate it.

#3 - Try before you buy

It is one of the same reasons we tell our customers to rent. Get familiar with a brand, make or model before you spend.

Trying to decide between three different tracked skidsteers? Why not try one of each and ask your customers what they think?

Research pays off. Take your time and get the right machine.

#4 - Peak shaving

Landing that big order is a thrill we all live for. What happens when you only have half the product required. The key is always knowing how much to buy. Buy what you are comfortable with and re rent the rest. The re rental fills in the peak of the demand curve.

#5 - Education

How better to learn about a new category of equipment then handling it?

Maybe you are looking at offering shut down tools or party rentals but not sure of the labour required to supply professionally.

By re renting some items you can test your system, people and facility while learning what you need to "rent it right".

Most rental people are "hands on" and learn by touching, loading, cleaning and renting the product. Re renting gives you that opportunity while still making some profit.

#6 - Another form of finance (RPO)

Many manufacturers offer Rental Purchase Options on their new equipment. This may be a bit of a stretch from the typical re rental but it is still renting from another company to satisfy demand. It gives you the flexibility of sending the equipment back to the manufacturer if not satisfied or if demand has dried up.

(Watch for more on RPOs in a future JIMBO's RENTAL TIPS)

#7 - Rental rate research

How better to research rental rates of your competitor than by renting from them? You get book rates and also see how low they are willing to go on discounts. You can guarantee that whatever discount they offer you they will offer most larger customers or long term orders. No guessing. Hard facts in black and white.

Hint within a tip: Make sure to communicate with your rental source as soon as the unit is off rent. An extra two day charge could eat up any of your margin.

Don't feel bad about having to rent from another source to provide a solution. Embrace it! it may be the best solution for your business.

Together, let's make our industry better.

JimBo