The farming equipment rental industry is growing rapidly and is projected to reach $80 billion globally by 2030. It means the industry is promising for those planning to start their business in this niche.
But we all know that success does not come by itself.
You must study your market (location), develop attractive pricing strategies, and be knowledgeable about farming activities.
On top of those, your inventory should include innovative technologies and equipment for precision farming, which is a popular trend in the farming industry.
Let’s put them into perspective.
- Your target location should have enough farms and population to get sustainable rentals.
- Pricing should be low enough to attract farmers who are, most of the time, in the set budget.
- You must know about the farming activities and essential tools and equipment suitable for each activity. The knowledge is essential to provide high-quality support and help farmers to make the right choices.
- Your farming equipment should be innovative. Farmers may already have old variants of equipment. Now, they want advanced ones to adapt to precision farming practices.
Precision farming is aimed at optimizing the use of resources, improving productivity, and reducing waste. Therefore, the equipment you are trying to rent should be aligned with this modern trend.
What else you should know before you start?
1. Global Farm Equipment Rental Market Size is Over $56 billion.
The numbers are expected to go up at a CAGR of 6.3% from 2024 to 2030.
The largest market share belongs to North America which has the most diverse agricultural sector. Meaning, America grows a wide range of crops, raises livestock, and engages in farming practices.
The higher diversity means more demand for different equipment.
2. Tractors are the most rented items.
According to Grand View Research, tractors are the most popular farming equipment for rentals.
The second spot belongs to harvesters, followed by balers and sprayers. Another report adds rotary cutters & mowers, and wagons & trailers as high-demand items.
Despite the reports, you must do your research on your target area’s farming activities.
Because something popular in one area may not be the same in different places.
3. Farmers have specific reasons to rent.
Knowing the driving force behind the farmers’ intention to rent can help you do precision marketing and shape your business model accordingly.
Here are the top 5 reasons why farmers may prefer rental over procurement:
- Instant access to farming equipment without upfront costs.
- Timely access to up-to-date equipment to increase the yield and quality of their produce. Procured equipment may be outdated after a couple of years, considering constant developments.
- No maintenance and storage fees associated with owning the equipment.
- Tax benefits as farmers can file rental fees as business expenses.
- No depreciation risks since farmers do not own the equipment.
4. Big players dominate the biggest portion of the farming equipment market.
Although those companies may seem like threats, you can learn good lessons from them.
For example, getting to know these businesses will give you an idea of different business models, high-demand equipment, and pricing options to shape your own rental business.
The biggest farming equipment companies are:
- Deere and Company
- Kubota Corporation
- AGCO Corporation
- CNH Industrial
- Flaman Group of Companies
- Jfarm Services
- FM WORLD Agricultural Machinery
- Pacific AG Rentals
- Mahindra & Mahindra Limited
- United Rentals
5. Low-emission equipment will be in high demand, especially in Europe.
If you are planning to start your business in the EU, you must acquire equipment that meets EU standards.
The European Union policies and subsidies are directed towards supporting farmers to use efficient and sustainable farming practices.
For example, the Common Agricultural Policy (CAP) supports farmers with financial incentives if they decide to invest in advanced equipment and technologies.
It means your rental equipment should align with the following goals :
- Reducing emissions
- Increasing productivity
- Conserving resources
- Promoting sustainability
- Supporting precision farming
6. Equipment with GPS systems is on the rise.
The GPS is now highly used in farming. There are equipment that come with a built-in GPS, and GPS devices that you can install to existing equipment.
Why GPS systems are used in farming equipment?
- To enable auto-steering on tractors to minimize overlaps and missed spots
- To minimize labor costs
- To automate record keeping of all operations
- To precisely map out fields and do precise jobs in the fields with straight, curved, and other abnormal shapes.
- To be able to work in low-visible situations.
- To reduce fuel costs by using accurate route planning.
7. Renting is a way of contributing to the environment.
When farmers use the same equipment jointly, they contribute to the environment as the need for manufacturing more equipment drops significantly.
To be more precise, here are a few other reasons why renting farming equipment is good for sustainability.
- Minimizes the depletion of natural resources for raw materials.
- Extends the lifespan of individual units as rental equipment goes through timely maintenance whereas individual-owned equipment may stay collecting rust in the garage.
- Minimal waste. The environment or the landfills have to facilitate the discarded tools and equipment. Fewer items mean less waste.
8. Trial before purchase.
Not every farmer is willing to keep renting. Sometimes, they rent once to try the equipment before deciding whether to purchase it.
But it does not mean every trail taker will purchase the equipment. So, you must have incentives in place to show them that renting is much better than buying.
For instance, you can offer memberships or deals for repeat customers, and make them feel good about their decision.
You can easily implement memberships and more with Reservety’s Rental Software.
- Rental website with free web design and migration
- Online booking and reservation system
- POS system to take orders in the office
- Inventory management system to manage all your inventories and their availabilities & schedules with serials and barcodes.
- Order management system to handle orders, process deliveries, and manage full and partial payments
- Marketing system to connect with farmers through the use of newsletters, automated emails, notifications, and social media.
- Tracking system to track inventories and their deliveries.
- Automated reports to keep the finances and rental activities in check.
- And additional 200+ features to streamline and automate your farming equipment rental business.
9. Companies offer value-added services to maximize their revenues and improve customer experience.
Since most equipment is high-tech for old-fashioned farmers, some companies offer add-on services for an extra fee or free as a complimentary service.
Those services include:
- Training
- Equipment setup
- Maintenance services
- Technical support
- And other services depending on the equipment.
Some companies go even one step further by offering their rental equipment in the form of servitization.
We have written a comprehensive article explaining what the servitization is, its benefits, and ways to implement it. You may read it here.
10. Modern rental businesses take orders online.
Nowadays, rental businesses started transitioning from traditional brick-and-mortar type to online models.
Here are the reasons why:
- According to statistics, online booking system increases revenues by up to 120%
- Around 35% of bookings are made after working hours.
- 2.71 billion people, or 27% of the world population, shop online.
- 92% of consumers in the US shop online.
- 43% of consumers in the US prefer online shopping rather than in-store shopping.
- 76% of adult shoppers in the US make online purchases using smartphones.
It has big implications for your farming equipment rental, so we recommend the following:
- Create an interactive rental website with an online booking system
- Add all your items there with clear descriptions, images, and pricing
- Accept multiple online payment options such as credit cards and e-wallets
- If you decide to use a hybrid model (online + physical location), make sure your online store and in-store POS are fully synchronized to track orders and inventories from a single dashboard.
- Have an availability calendar to automatically show inventory availabilities.
- Customer accounts with membership plans and preset privileges and discounts.
- Document management system to digitally sign rental contracts, waivers, and other important documents and store them under customer accounts.
- Marketing tools to promote your farming equipment rental business through social media integrations, discount coupons, newsletters, bulk SMS and Email campaigns, and more.
All of the recommended features, plus more, are available at the Reservety.
You can test the software for free with the trial option without a credit card.
Even with the trial version, you will get:
- Free web design services
- Free migration (if you already have a website)
- Free integration to your existing website
- Free premium features
- Free dedicated support.
- And more.
