With the widely prevailing trend of DIY home repairs, carpentry and renovations, there is an increase in demand for rental tools. However, a major problem that many customers face is the lack of rental options in their nearest hardware stores. Thus, they reluctantly have to invest in one-time usage tools that remain idle in storage for months and years. This highlights the profitability in launching a tool rental business that provides customers with the flexibility to rent power tools and hardware items. 

As per statistics, the tool and equipment rental size in the US market alone was $4.5 billion last year. The industry is further expected to grow because of the following reasons:

  1. Lack of tool rental options in local markets
  2. Profit from consumable items such as drill bits, screws, hinges, latches, pipes, chains, handles, cutters, etc.
  3. Repeat earnings from the same inventory
  4. As the tools are rented for short-term usage, the demand for all brands is equal
  5. Multiple revenue generation options such as rental charges, delivery charges, rental add-ons, display ads, and subscriptions

Launching an Online Tool Rental Business in a Calculated Manner

To begin with, business owners are required to do some research on their target markets. This includes the areas and regions you will be targeting, the type of power tools your audience would like to get, and what shipping options are available to you. As customers are only renting tools for short term usage, it is feasible to create a diverse inventory by investing in used power tools and equipment. Many consumable items are general commodity hardware and procuring them is simple.

The actual efforts that you will need to put in are in obtaining your business license, developing an online platform, software implementation and marketing. Let’s look into these one by one:

1. Obtaining a License 

As business licensing requirements vary from state to state, it is better to consult a proper licensing agency in order to get all your licenses and permits. Federal regulations, on the other hand, remain the same for every region. Also select your business name or operating name, logo, slogans, taglines, etc. to register for trademarks, copyrights and intellectual properties.

2. Launching an Online Rental Platform

You also need to work on technology in order to take online orders. This can be easily done with the help of an off-the-shelf tools rental software. In our eyes, you can try the YoRent rental software that comes with numerous features required to launch a powerful tool rental platform.

For example, some of its supporting features are:

  • Order management
  • Inventory management
  • Rental security management
  • Agreement management
  • Booking calendar
  • Rental add-ons support 
  • Rent plus Sell (important to sell consumable items)
  • Late returns management
  • Late cancellations management
  • Daily, weekly and monthly pricing
  • Document verification
  • Product comparison
  • Map view filter
  • Multilingual and multi currency support
  • Unlimited listings, transactions and user profiles

Yo!Rent’s demos are also publicly available and free to browse without providing any personal information or credit card.

3. Configuration and Product Listings

The next step is to configure the software to become operational. This will include setting up the primary pages, such as home page, about us page, terms and conditions page, etc. You will also need to set up your payment gateways, i.e, add your payment address, wallets, bank accounts, etc. The most important step is to add product listings. Take a look at the following checklist to upload detailed product listings:

  1. Upload high quality product pictures
  2. Add alt tags to every image
  3. Write SEO friendly names
  4. Add product description in detail
  5. Add product features and specifications
  6. Select product category
  7. Select product tags
  8. Set pricing

Also checkout:

https://www.slideshare.net/Yo_Rent/how-to-start-an-online-heavy-equipment-rental-marketplace

4. Marketing

Once your tools rental platform is fully operational, you need to execute a well-drafted marketing strategy in order to get your first customers. This strategy is also known as GTM strategy and is inclusive of branding, SEO, social media marketing, paid campaigning, discount strategies and more. You can hire a third-party digital marketing agency to handle all these, but if you are handling marketing operations by your own, you need to take care of the following:

  1. Create vision, mission and value statements that resonate with your services and customer demands
  2. Set clear unique value propositions and brand offerings
  3. Use pre-launch campaigns on social media to create general brand awareness
  4. Research region-specific keywords for SEO and paid marketing campaigns
  5. Focus on content creation and keyword rankings to create an online presence on search engines and become discoverable
  6. Do third-party business listings on sites like Yelp and GMB to improve business reach
  7. Run paid ads on social media and search engines for faster lead generation
  8. Set discount offers and use email marketing to invite your first customers

Conclusion

After launching your online tool rental business, you can expect to reach the break even point within 6 to 24 months depending on the approach you take for marketing and sales. Along with conducting tool rental operations, you can also take cost-saving measures such as hiring an in-house engineer for reducing repair and maintenance costs. However, investing in a general equipment insurance or collecting rental security amount on each order can reduce maintenance costs vastly and increase profit margins.
Lastly, focus on using the most-advanced rental software solution to stay agile at all times and lower operational costs.