Hi scott f,

Thanks for sharing with some knowledge and advices with regards to equipment rental.

We are a dealer for a couple of different manufactures. Our rental department is a MAJOR portion of our income and profitability.

We have found success in the Long term rental market, 3+ year terms using new equipment. We have also had good success with our seasonal customers whom require additional equipment during peak periods in their businesses. These seasonal customers can range from trucking companies, to mostly companies dealing with agriculture during harvest times.

There are a lot of Huge Equipment rental companies that specialize in the Construction Industry, that is a nich that we have not gone after because we are dealing with Industrial accounts on a more regular basis and our equipment lines better suited for the Industrial sector.

Being a dealer for a major line you do have an advantage over some of the specialty "Rental Companies". You can purchase equipment at a lower cost and have the benifit of generating income for your service department doing warranty service during the first year or so of the life of the equipment.

Our best target customers are those that work on a contract basis. Logistics companies and storage warehouse companies are prime examples. Because they typically contract with a manufacturer to store and distribute their products for a specific amount of time, long term rental is an excellent way for them to establish a fixed cost for their equipment, and not have to invest capital in equipment that they may not have a need for if their customer should leave after the initial contract, limiting their exposure, and start up costs for the project as well as freeing up operating capital which can be invested by them into buildings and or facilities that make them money.

Depending on your current financial position, and availability of credit to purchase the rental eqipment, an other way to start is to establish and promote Full Maintenance Leases, using the customers credit line by leasing them equipment through a finance company while you contract with the company for monthly maintenance charges. Finance companies in the states will collect these charges from the customer with the monthly lease payments and forward them to you. This can give you an opportunity to "Test the waters" with your customers or potential customers with the concept as well as your sales peoples ability to sell the concept, with out tremendous up front expences.

Focus on your core business, study the maintenance history of the trucks that you are currently servicing and represent, average costs of operation per hour, legnth of warranty. Know your customer and his application, hours used, conditions, abuse etc. Be realistic with your internal service rates, your Rental Department may become your biggest customer, that cant happen at the expense of your service department.

Good Luck!

Good Luck!

Yes, we are an authorized dealer for a particular brand... However, my concern is focussed on how to establish the rental department such as the steps involeved. For example, how I should penetrate the rental market given that there are various companies doing rental here in the Philippines. Can you suggest a management and marketing format on how to undergo the rental department. Our company for the past years had been focussed on selling brand new forklift units and aftersales services. Our experience with doing business in forklift rental is not adequate to determine the form of management we would employ to implement the rental department and on how to grab a market share of the rental here.

Your question is dependent on whether or not you are an authorized dealer for a particular brand. If you are, the answer is obvious, yes. If you are not, then the question becomes more involved. There are many plus sides to have 1 brand: mechanic training, parts inventory, etc.
The downside is your cost of new equipment and replacement parts.. There is much flexibility in the pricing of new trucks and parts and if there is no competition when you puchase a new truck or parts, the pricing could be higher.
As long as you have some control of your equipment and parts pricing, using one brand does have an overall advantage.