RENTAL OPERATIONS
The equipment handoff with adequate how-to instructions is key to success .
The Equipment Rental Economy
The American Rental Association ( ARA ) separates rental into event rental ( party tents , chairs , etc .) and equipment rental . “ Our equipment rental members serve two markets ,” said Nickell . “ The DIY market is roughly 20 % and the pro contractor market makes up about 80 %. That varies by location and business . We are seeing more companies get into equipment rental . It ’ s essentially the sharing economy , with an intermediary .”
Nickel said some rental companies dabble in sales . “ About 30 to 40 percent of our members are retailers to some degree . Outdoor power equipment is one of the most common tack-ons for our members ,” he said . “ For some , 50 % or more of their business is in equipment sales .”
“ Because equipment rental is done in person , the business is a good relationship builder for equipment retailers ,” said Nickell . “ Equipment retailers are facing heavy competition from large national retailers and ecommerce sales . This impacts all retail businesses . And it is driving OPE dealers and local hardware stores to get into the rental business .” United Rentals is the world ’ s largest equipment rental business . The publicly traded company reported revenue in Q1 2024 of nearly $ 3 billion .
OPE dealer viewpoint
When I first talked with Matt Bridges , owner of 3B Outdoor Equipment in Monroe , La ., he couldn ’ t talk for long . “ I ’ m meeting with an attorney to talk about another
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rental business opportunity ,” he said . Bridges currently operates two locations in Monroe , and he ’ s looking at a third . Both current sites sell new equipment and rent a range of equipment . When he called me back , I asked if he ’ d recommend the rental business to other OPE dealers .
“ You have to look at the possible tax advantages . I ’ m a numbers nerd ,” he said , “ and anybody with a little sense knows that you can work this to your advantage . There are a lot of depreciating assets .”
Many of his rental customers are landscape professionals . “ We want to be a onestop shop . To do that , I have to manage the cash flow correctly . It ’ s all in the way the business is set up ,” he said . “ I keep the rental company separate from the outdoor equipment company . And they do business with each other for equipment sales and service and repairs .”
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www . OPE-Plus . com July 2024 OPE + 23