Anyone know how rental pricing on power equipment is determined?
 

We're a distributor for a top-of-the-line push seed/fertilizer spreader manufacturer who markets primarily the golf and high-end turf maintenance market. They've come up with a gas powered walk-behind unit that fills the gap between a standard push and the very expensive ride-on spreaders. They're very maneuverable and able to get in to small and odd-shaped areas that the larger rideable ones can't as well as giving the user the ability to cover large and hilly areas while "pushing" around 100-150 lbs of material. The superintendents really seem to like it because it has a set spreading speed so they have an idea of exactly how long it should take an employee to cover a given area no matter who is using it.

We've demo'd them at a few of our better customers' courses and they've ended up purchasing one but I was thinking about coming up with a rental rate for those who don't quite reach the level of freebie trial use or for lawn care operators who may have a couple larger properties but wouldn't have enough use for one to purchase it. I think most courses who try it would probably end up buying one so a rental would be a good way for them to try it out.

I've never rented any power equipment (tillers, aerators, overseeders) although I have a decent idea of what they go for when new. Anyone have an idea? 1/10th the purchase price?

Go to Home Depot and get their rental price list. You could use that as a starting point.

---{SHUDDER}---- ;) That's probably the easiest way.

It tends to vary with the cost of the equipment.

A $600.00 power washer might rent for $50. for the day.

However, a Bobcat, typically a $30K machine, might rent for $300. for the day. There is NFW the Bobcat will pull $3K for one day's work. Nobody would rent it.

If the spreader has a sales price of $5K, I'd suppose that you could rent it in the range of $175 for the day. You won't get $500.

They take a piece of equipment, add the sum total of purchase and carrying costs and a reasonable profit, then divide that sum by the number of days they can send it out into the field before it returns as a battered, useless POS.

Without the sulky attachment they run around $2K, I was thinking maybe $200 for a few days. I'm not looking to get into the rental business per se but I think it would be a good way to get the machine into a customer's hands to try and decide that they just can't live without one while giving enough disincentive to keep them from just asking to rent it everytime they have a lot of spreading or topdressing to do.

You might be OK at $200. if it's a one time deal...........seems a bit steep to me for a $2K machine. But, you've got to determine how many times you can rent it in a season. If it's only three or four times, then you'll need to charge $200. to amortize the machine cost. If you can rent it 10 times in a season (very doubtful), you can certainly reduce the rental fee to $125 or so.

:D There is a lot of truth to that.

It's not something that I would put out to rent to any shmoe off the street for that very fear. I'd have our salespeople target courses or sports turf customers with maybe a minimum of $15K in purchases from us a year. Not that their employees are any less liable to abuse it, just that it would limit the abuse to a smaller segment.

I loaned it out to a $40K customer last week to try and and she's putting it in her budget for next year so it does sell itself. And it came back as clean and sparkling as it was when it left.:) (Probably the exception to the rule. ;))

Maybe for a week? I have no desire to get into the rental business so I'm not looking at it as a money maker but OTOH I don't want them calling me up every 3-4 weeks during the growing season to rent it for their greens applications. If only a handful take us up on the offer that'd be fine with me. Maybe we could let them know it's just a one-time offer.

I agree. If it's your intent to allow them a tryout prior to purchase, the rental fee is really not a meaningful number. I'd probably keep it quite a bit lower than $200. because I'd want them to take it for a test. I still think $200. it a bit steep.

If the machine doesn't become obsolete in two years, you can always sell it as a "demo" model if it hasn't had much use. The rental costs would not need to fully amortize it.

X2 took the words right out of my mouth. Than go down to the competition and see what the market will bear. If the numbers work go for it, if not screw it.

If it is a one time thing, it should be more like a security deposit.