Advancements in industry-specific processes such as fabrication methods in manufacturing, material handling in warehouses, and evolving farming practices in agriculture have spurred the demand for online heavy equipment rentals. The global equipment rental market is anticipated to reach $273.5 billion by 2030 from $176.2 billion in 2020, registering a compounded annual growth rate(CAGR) of 4.4% for the forecast period 2021-30.
Starting a heavy equipment rental business in current times can earn huge profits if planned efficiently and backed by proper market and internet research. Most of the equipment rental marketplaces that run online are powered by a rental platform built to ease rental operations.
In this article, we take you through the challenges faced by equipment rental businesses and how adopting heavy equipment rental software can boost business profitability.
6 Ways Equipment Rental Software Helps Businesses Increase Their Revenue
Equipment rental businesses have huge scope for growth pertaining to the global demand for infrastructure in multiple industries. Generating a profitable revenue is a challenge that most equipment rental businesses have to deal with. Below are some challenges faced by equipment rental businesses while generating revenues along with their possible solutions.
Unavailability Of Equipment
The failure in monitoring the equipment available for rent is one of the major issues that have a direct impact on business revenue. The possible reasons behind the unavailability of the equipment are:
- Equipment being repaired
- Equipment out of stock
- On-going maintenance of the equipment
Such issues usually occur due to a lack of transparency in the operations or untimely updation of the inventory.
Since an equipment rental business deals with multiple categories of equipment, keeping a manual check on the availability of equipment is not a feasible fix to the challenge.
An intelligent equipment rental software that tracks the entire lifecycle of products can be used to maximize the availability of equipment. The rental software allows the admin to update the status from an easily accessible dashboard that consolidates all the information regarding the equipment. The status automatically gets revised for all the stakeholders when the admin updates it.
In addition to this, dedicated equipment rental software also comes with order management modules that automatically update the inventory when the customer returns the equipment.
Efficient Cross-Selling And Upselling
Successful cross-selling in any online rental business can increase the purchasing potential of the customer, thus adding to the overall revenue of the business. This is also advantageous for the customers as they get to rent all required equipment from a single provider, save additional costs of transportation, and so on.
In equipment rental businesses, it is quite easier to cross-sell multiple products in the form of rental kits or bundles. But identifying and approaching potential customers can get inconvenient for the admin.
Rental business software that is built for equipment rental businesses comes with the option to create bundles for relevant products. The admin itself can create the bundles or rental kits. Furthermore, the business owners can also specify products for primary categories which are displayed at a discounted price with relevant equipment.
Insufficient Business Insights
The profitability of an equipment rental business largely depends on the specific categories of equipment that are highly in-demand in the target region. Having no data about the assets which drive most of your business revenue can impact your order management and investment decisions. So, it becomes vital for new and existing equipment rental companies to have enough business insights that help them identify the market potential of particular equipment.
A dedicated equipment rental software has modules to generate business reports. These reports provide key performance indicators which help business owners in making informed decisions on planning and future investments.
An efficient equipment rental software can help you with important details such as:-
- Rental reports
- Traffic insights
- Top performing equipment
- Most searched equipment
- Inventory reports and so on.
Scheduling & Transportation
The buffer time between picking equipment from one customer, examining its health, and then renting it to another customer gives rise to equipment downtime. Consequently, a lack of booking and transportation management can cause delayed pickups and deliveries. This can result in customer dissatisfaction and can lead them to opt for a competitors’ site.
Investing in advanced heavy equipment rental software can help in streamlining the booking and transportation process. It helps prevent overscheduling and aids in planning the next delivery in a way that gives you ample time to monitor the equipment’s health. Further, the feature of notifications/reminders can help in overcoming the challenge of delayed returns as customers are sent reminders for timely returns.
Missed Revenue Opportunities
Every time you rent equipment, a specific document including the agreement and terms of equipment usage has to be signed by the customers. Merely signing an agreement doesn’t affirm the fair usage of equipment, so a constant track of the location and status of the rented products becomes imperative. Failure to do this can cause mishandling and overuse of equipment, resulting in wear and tear, thus increasing maintenance costs. It’s nearly impossible to keep a manual track of usage and unfair handling of equipment unless you have plenty of manpower to do this.
The incorporation of technologies such as Internet Of Things (IoT) into smart devices has made it a lot easier for equipment rental software to efficiently track the exact locations and movements of equipment from one place to another. If the equipment is misused or used for unsuited tasks, the business owner can easily detect it by analyzing the location where the equipment was delivered as per the agreement. The business owner can then charge an extra amount for equipment overuse and if it is used for an unsuited task, then the owner can ask for damage recovery.
Defined Revenue Streams
As per finance experts, the revenue streams of your business should be aligned in a way that no single revenue-generating method should account for more than 15% of revenue.
Though rental fee generated from the customers is a major source of revenue for equipment rental businesses, the dependency of the entire business on a single revenue stream risks its financial health and sustainability. So, insufficient revenue streams is a general concern equipment rental businesses have to deal with.
Dedicated equipment rental software comes with pre-built modules that help business owners to generate additional revenue streams. More importantly, the income generated from additional streams requires no extra resources for the implementation. Below listed are some possible income generating methods:
- Running third-party advertisements
- Selling insurance to the customers who rent the equipment
- Subscription packages for customers
- Running featured listings – (Incase of multi vendor platforms only).
The Final Take
In the new era of digitalization, technological advancements have had a significant impact on the equipment rental industry. Many of the above mentioned solutions, if harnessed, can help in maximizing business profit.
Hence, if as an entrepreneur you are looking for a rental solution that streamlines operations and helps in making your business profitable Yo!Rent is an efficient rental software that takes care of all your business requirements from renting equipment to collecting payments from customers. The software is completely whitelabel and comes at a one-time cost with all the important functionalities. To experience Yo!Rent as a dedicated equipment rental software for your business, you can book a free personalized demo today by visiting the official website.
Saurabh Thakur is an eCommerce analyst and has been active in this industry since 2014. He is passionate about technology and always looking for new opportunities. He helps startups to run their business online with the right approach that helps to get desired results.