The party rental business market is a great one right now. There is tremendous growth in party rental companies in the United States and across the globe for weddings, birthdays, and corporate events.
Before 2021, the market diminished year by year by 3.6%, but in 2021, it was expected to increase by over 15%. Choosing to enter the market now is a wise decision – especially when customer shopping patterns are lean into e-commerce. If you are determined to grow, you can considerably make a successful party rental venture using these incredible tips.
Operating a rental business is completely different than selling or dropshipping online. You are accountable for everything to work out seamlessly. Above all, you have to ensure you’re meeting the legal requirements of choosing the right vendors who will deliver the quality equipment at your doorstep.
Here are the top ten mistakes that new party rental brands make when dealing with vendors to buy equipment for your company.
1. Not knowing what equipment you need before buying
Starting any new business will likely mean cash flow is limited in the beginning. Before starting to buy equipment from a vendor, know exactly what you need. Do you need tents, chairs, catering equipment or something else?
Do your research and fully complete your business model, including what equipment you will offer to rent to your customers. If you can plan exactly what you need, you can likely find everything you need from one vendor and possibly save money in the process. You are also less likely to be persuaded into buying products you don’t need for your business.
2. Overestimating the pieces of equipment to buy
Your brand is new. You probably don’t have enough customers renting from you yet that require you to buy a full stock of equipment. It’s important not to think too big too quickly.
By overestimating how much equipment you need in the beginning, may lead you to spend money you don’t yet have. If you only have one or two bookings a week, buy enough equipment to meet those expectations and only buy more as your business grows.
3. Not looking into where the equipment will be coming from
If you’re buying your equipment online especially, you will probably find hundreds of potential businesses all trying to offer you deals and lower prices than their competitors.
It’s important not to jump for the lowest price you find before ensuring the quality of the product and finding out why the equipment is so cheap. Oftentimes it’s because it’s coming from a foreign country that will take months to get to you or the quality of the equipment matches the lower price. If you’re not sure where the business is located or where the equipment will ship from, check the “About Us” page or contact the vendor.
4. Ignoring the Research and Review Process
Not knowing much about the vendors you will need to buy equipment from can lead to hasty decisions. One of the best ways to find out the reputation of a company is to look at reviews online – but don’t be too trusting.
Google, Yelp, and Facebook are great places to start but be sure to click on the username of a few reviewers to see their history. If it looks like their profile was made solely for review, or their review process looks “funny,” then it is possible that they’ve been hired to make reviews. Read reviews thoroughly.
What did they like about the vendor and what issues did they have, if any. You can also research existing party and event equipment rentals to see where they buy, a reliable source could be the customer base of a party rental software provider.
5. Buying Before Checking Liability Insurance
Having liability will be essential for running your party rental business legally. In this industry, it is only a matter of time before someone will be hurt on or due to your rental. Many insurance companies and policies have very specific requirements when it comes to your equipment. This may mean if you cannot buy previously owned equipment, require certain safety devices installed, and more. Not having insurance lined up before you buy equipment can become an issue or lead to your policy being canceled if the equipment doesn’t meet these standards.
6. Paying in Full for Equipment
Unlike if you were to walk into a retail store like Walmart to purchase the equipment for your party rental company, most vendors set their prices with the expectation that they will make a deal for a lower price. Paying the asking price without even trying to get a bulk purchase discount or deal can lead to you spending more money than you needed to. You’re in the B2B industry, which means communicating with the businesses you work with is key to keeping costs and expenses low. On that note.
7. Undermining Building Relationship With Vendors
What steps have you taken to communicate with possible vendors before making a purchase? Starting to build strong relationships with your vendors, especially if they are local, can only be beneficial for your rental business. For example, vendors who know you may come to you first with new equipment in stock, or they may refer you to customers who come to them asking if any companies rent their equipment. Strong relationships in the business world are essential to growing your business and, again, minimizing your overall expenses.
8. Skipping the Equipment Warranty
Choosing the right equipment means looking into more than just the upfront cost. Sometimes equipment will seem cheaper on the surface but if it doesn’t come with a warranty, any repairs will come out of your pocket. Choosing a vendor that offers a warranty of at least two years gives you the ability to send equipment in for repairs of manufacture defects instead of having to accumulate expenses you didn’t need to. So, in the long run, you end up paying more if there is no warranty or repair policy
9. Not Talking the Customer First
It’s important to offer your customers variety, but it’s also essential to find out what they want so you don’t waste money on equipment that won’t end up getting rented.
Reach out to your customers, and if you don’t have any yet, you can hold a focus group with potential customers or even ask your audience on social media platforms. Questions such as which ideal products they would most likely rent from a party rental company and which ones they’re more likely to buy themselves are both ways of truly finding out which equipment is best for your business
10. Not Deciding Rental Equipment Pricing
Either you’re about to buy equipment and haven’t decided how much you will charge your customers or you’ve already decided on a price and you’re trying to find equipment to match it. In both of these scenarios, you may not be making the right decision to ensure your overall costs remain low. For example, if you’re expecting to charge your customers a low price to rent your party equipment but are buying the top-tier products, it will take much longer before you pay off what you’ve put in and started making actual revenue.
You need to go hand in hand. If you find a suitable vendor based on other factors, choose the cost before buying. Will this potential cost be too high for customers? Are there competitors charging less for lower-cost equipment? Perhaps you may need to find a different vendor.
Choosing the right vendor at the initial stages gives you an advantage in the long term. It is why proper due diligence is necessary before finalizing who to purchase from. Have a proper checklist in place and conduct thorough research before you buy. There’s more to do than just choosing the right vendor. Deciding how your customers will book from your party rental business is also key – especially if you want to make a profit. Make the process as simple as possible so customers won’t have to stress when they already have a busy event to plan. Reservation software for rental businesses will do the work for you.
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