In Part I, we noted that even though there are currently a few online marketplaces that support the construction/heavy-equipment industry, there are no true online marketplaces for equipment rental even though it is estimated to be a $38 Billion to $50 Billion market, of which construction equipment represents less than half of all rentals. In today’s post we will address the potential benefits of an online marketplace for equipment rental, but first we will discuss traditional equipment rental sourcing as a foundation.
Traditional equipment rental sourcing
When there’s a job to be done that requires equipment rental, the first step is sourcing the equipment. Most organizations have a policy that requires multiple rental quotes from multiple suppliers in order to establish a basis for comparison and leverage the cost reduction power of competition. The traditional equipment rental sourcing process looks something like this:
- Research potential suppliers
(that carry your required equipment) through association directories, online searches, referrals and other channels.
- Contact the suppliers and do further background checks
to ensure the suppliers are legitimate and reliable.
- Submit quote requests to each supplier
that met your preliminary criteria. There will likely be some back and forth communication with each supplier to clarify rental details.
- Research additional suppliers
after discovering that certain suppliers don’t have the required equipment available at the required time or don’t carry all of the equipment that the organization needs to rent.
How does an online marketplace benefit equipment rental sourcing?
Procurement staff (or whoever is in charge of sourcing the equipment) could visit a single website. Select the equipment needed with a few clicks. Provide the details and dates just once and then allow the marketplace platform to do the work. Your single quote request would be automatically and immediately delivered to all of the marketplace suppliers that meet your rental criteria. Any additional details that you may need to communicate can be sent through the system once and distributed to all of the participating suppliers simultaneously.
The system manages the research and communications for you and then delivers multiple, side-by-side quotes for easy comparison. If you need to rent equipment immediately and don’t require quotes, a quality rental marketplace would offer the ability to select and rent specific equipment directly from uploaded supplier inventory. Tasks that traditionally takes hours, days and even weeks could be accomplished in minutes in an online marketplace environment.
An online equipment rental marketplace would provide such efficient access to all kinds of equipment that businesses could easily take on projects that they may have previously turned down due to a lack of equipment. In fact, a marketplace filled with categorized equipment could empower a business to proactively discover new ways to expand their services and their customer bases, simply by renting equipment they don’t currently own. Scrolling through various equipment categories could generate creative ideas about new service offerings and allow businesses to test them out without a large capital investment or strain on cashflow.
When the completion of a job is totally dependent on having the right rental equipment, it’s important to rent from suppliers you can trust to deliver quality equipment, and on time. A good online equipment rental marketplace will have processes in place to ensure the quality of their suppliers so you don’t have to waste time doing background checks and investigations. Suppliers are not only typically certified by the marketplace itself, but most online marketplaces will also include a rating system that allows renters to review and rate suppliers based on their experiences.
Because marketplaces aggregate lots of rental activity, they usually have access to lots of data about how much specific equipment rentals should cost. A good marketplace will create a truly competitive environment, which is always good for the renter. Some marketplaces will even offer transparency so renters can easily see the going rates based on real-time rental transactions.
The time has come for a comprehensive equipment rental marketplace.