When it comes to investing in products for your rental business, it can get overwhelming to pick out the right ones. Fortunately, no matter the industry your rental business will be operating in, there are the same principles that apply when it comes to choosing and investing in rentable items.
Don’t worry - this is a common challenge every business faces when starting out. The truth is there is no ‘one-size-fits-all’ when it comes to choosing the products that fit your unique business. Luckily there is a way to scope it down by taking a moment to write out what are the enablers and disablers of your business.
To help out with this, we've compiled a simple framework that you can use. In it, you will define what is your business principle when it comes to, for example, storage space. If you have to operate your rental shop with a 20 square meter storage space, maybe a product size of a fridge is not the one to start with.
In the list below, you’ll find some of the most important themes to consider when choosing the right equipment for your business. For each of the themes, you can write out your principle, and we promise you’ll see if the product you have in mind is the right fit for your business.
Product Demand & Fit
Just like with any business, figuring out the demand and fit for your rental products or services is the first step. After establishing that renting is the way to go, you want to make sure the demand for the equipment is there and that the product is a good fit for your business, regardless of if you’re just starting out or adding products to your existing business.
Is there a demand for your products?
The popularity of a rental product fluctuates depending on trends, seasons, global situations—you name it. But popularity is not the only factor that determines whether there is a demand for it. It is important to take into account the industry you operate in, your location, and your customers' needs.
For example, if you’re operating a hardware store in a larger city, you might want to consider renting out drills, bigger tools, and delivery services that alone-living city folk might need every once in a while but don’t have the space for it. On the other hand, renting out rafts and paddleboards when you’re miles away from the closest water might not be the smartest business move.
Are the rental products a good fit for your business?
In case you already have products that you’re renting or selling, and you’re looking into expanding your offering, take into consideration the fit of the products. While we also mean physically, we are also talking about whether the product makes sense to add to your overall inventory.
Launching new products and expanding your offering with new categories will help open up and reach new customer groups. However, it can require a lot of resources like money and time. Investing in something completely new will mean that you and your staff have to spend time learning about the new products and how they function, which might not be the best option.
You will always want your products to complement each other. For example, if you’re offering outdoor products like canopies and picnic chairs up for rent, having coolers and backup chargers would also make sense, as they are something that picnic-goers might end up needing.
|Current Offering Product Fit
|Launching something new
|Extending existing offering
Whether you’re a small rental business that’s just starting out, or a larger retailer that’s considering expanding its offering, space is one of the first things to consider when deciding on the products to rent.
In-store space means everything from shelf space, back-storage, and possible outdoor space.
Ideally, having lots of floor space or shelf space in the front would make it easier for the customer to choose the exact product they need, but that’s not always possible. Mapping out the size and amount of products you can fit in your store will help you narrow down the kind of selection you’ll be offering to your customers.
For example, products like drills fit in a relatively small space on the shelf and don’t limit the moving space in the store. Meanwhile, you might want to reserve things like leaf blowers or canopies for the back storage or even the outdoor space since they’re designed to withstand outdoor weather conditions.
Maintenance is one of the key elements in running a successful rental business. Since the products are in constant rotation, it is essential to make sure that the items are being taken care of so they can last a long time. Ideally, you would offer rental products that require minimal maintenance, but since that's not always possible, then investing in rental products that are not only relatively easy to maintain labor-wise but that are also easy to find spare parts for is the way to go.
For example, investing in items that are all from the same manufacturer means that spare parts will most likely be easy to find, and they’ll fit more than one product. Since accidents happen all the time, what you don’t want to be doing is having to invest even more money into spare parts that are either expensive or hard to get your hands on.
The durability of rental products
One thing you want to avoid is investing in products that are either low quality or that aren’t just made to last non-stop use. It’s like the saying goes: you get what you pay for - if you invest in inventory that is of lesser quality, what you’ll end up having are products that need to be constantly replaced. It's simple: the longer your items can withstand use, the more profit you’ll get.
This also means avoiding products that aren’t necessarily meant to last non-stop use. For example, when starting out with a clothing rental business, thin, delicate, lacy pieces of clothing might not be the best items to start with, as they may tear after one use. Or if your selection is made out of delicate clothing, it might be worthwhile to plan how to repair or recycle fabrics at scale.
Timeless or trendy?
Depending on the industry your rental business operates in, you might want to take the timelessness of the products into consideration. If the industry doesn’t depend on trends, as the fashion industry does, for example, you might want to initially invest in products that have a long shelf life and that aren’t based on what's cool in that current season.
Starting your rental business with trendy products is not necessarily a bad thing, though. It can help you get awareness and enter the market with a bang. By acknowledging the potentially shorter shelf-life, you may plan to sell the equipment as refurbished with quicker rotation than usual.
|Is the product easy to maintain?
|Is the product durable?
|Is it timeless?
As the name suggests, product complexity is all about how complicated the processes related to rentable products are. Product complexity will help determine how easy it is for your customers to use the items and how profitable the products will be in the end for your business.
There are things like marketing, upselling value, and self-sufficiency to consider when it comes to product complexity. Let’s take a look at what they mean and why they should be taken into account when deciding what to stack your inventory up with.
This point is surprisingly easy to overlook: how easy it is to market your business and your rental products. When the product is already familiar to your potential customers, it takes significantly fewer resources and effort to market them. This allows all of your marketing efforts to be focused on attracting and converting potential customers into buying ones instead of focusing on promoting the item and what it does.
While investing in well-known brands can help customers feel more comfortable with using the product, it's not entirely necessary. It can actually be an excellent introduction point to different brands and models. Offering the opportunity to test out new brands or products can make the purchase decision much easier and ultimately convert your rental customer into a buying one.
With self-sufficient rental products, we’re talking about how easy it is for a customer to use the product without any additional instructions. Using equipment like a set of speakers is pretty self-explanatory and doesn’t require a how-to session from a staff member, while with products like game consoles, the customers might need some extra guidance on how to set everything up.
Obviously, not everything works with a press of a single on/off button, so sometimes additional instructions from the staff are required. Whether the staff has the extra time, knowledge, or tools to provide the needed instructions or not might affect the selection and types of rental products that will end up at your rental business.
We already talked about finding products that fit and complement each other. It doesn’t only help to run your business more efficiently, it helps grow your profit margins and open up opportunities for growth. Having a complementing inventory means that you have products that go well together: bikes and helmets, paddleboards and waterproof backpacks, skis and skiing lessons, trailers and plug adapters, and so on.
However, offering complementary products isn't the only upselling strategy. People usually go for what's better for them: why would they want to use something basic when there's something really good and high-quality available, especially when the price difference isn't that big. So when building your inventory, take into consideration further expansions and whether you will be able to invest in more complimentary rental products or more expensive, professional gear.
For example, imagine running a bike rental business, and you're offering pretty standard bikes fit for exploring the outdoors. Now, if you also start offering high-end e-bikes that can get your customers through any terrain and weather conditions, suddenly, your customers have the option of upgrading their bike and really going all-in on their outdoor exploration. Which one do you think the customer would choose?
|Is the product easy to market?
|Is it self-sufficient?
|If it's not self-sufficient, do you have the resources in order to provide sufficient instructions?
|Is it easy to upsell?
If you’re operating from a brick-and-mortar location, consider how easy it is to get to your store and how easy it is to pick up your items. If the store is located in a busy area with good public transportation possibilities and/or parking, it shouldn’t affect your product selection much.
However, if you’re located in a remote area, and the products you’re about to invest in aren’t portable by hand, this might make things more complicated. Carrying a full picnic set with a canopy on a bus isn’t necessarily pleasant (or possible), so you’ll want to look into offering delivery services or something similar that will make the pick-up and drop-off experience easier for your customers. With Twice, you can easily set up and manage your delivery service and process all orders and deliveries in one place.
|Is your store easily accessible?
|Is the product carriable by hand?
|Do you offer delivery services?
Losing money over broken, damaged, or even stolen equipment is something that should obviously be avoided. The reality is that when you’re renting out the same product over and over to people, an accident is prone to happen sooner or later.
When deciding on what kind of products you want to have in your inventory, risk management should be one of the most important things that you should consider. Look into getting products that can either be insured in some way or placed in a well-secured space where nothing can happen to them.
Luckily when it comes to rental products and risk management, security deposits have been a sufficient way of making sure the business isn’t experiencing any monetary loss due to accidents or other unwanted events. With Twice Payments, you’ll be able to accept payments immediately and set up automatic security deposits.
|Can you store your product in a safe space?
|Is there insurance available for the product?
|Can you set up security deposits?
Direct & Indirect Value
What type of value this product brings to your business - that is the ultimate question. In all seriousness, it is the bottom line of every successful business, so it needs to be determined. Rental products can either work as a great source of monetary profit on their own, which is a direct value, or they can have indirect value to the business.
Indirect value means that, although it might not be directly the greatest source of revenue, it attracts more traffic to the store and being able to up-sell other products and services. For example, potential customers come in because they were interested in renting a leaf blower for the day but end up also buying a couple of rakes and other product categories you offer as part of your normal retail operation.
So there needs to be a strategy: is the product there to bring direct value, or does it help boost the profitability of other goods and services?
|Does the product bring monetary profit?
|Does it attract more traffic & help upsell other products?
|Can it do both?
That's it for our guide on how to choose the right rental products for your rental business! Like we said, while there's no cookie-cutter recipe on which products are perfect for renting and which are not, there are certain guidelines that can be applied to nearly all rental businesses.
Whether you're just starting out small with your rental operations or are expanding your offering from retail products to rental services, we hope our guide and checklist were useful, and we wish you the best of luck with your business!