Rental Company Seeks To Increase Revenue
Easy money is hard to come by for most businesses. Yet, in the equipment rental industry, many companies pass up easy money by not offering a product that a majority of their customers need.
A rental company was looking for opportunities to increase revenue. The company were missing opportunities to increase revenue by not offering some products that most of their customers needed; portable fuel storage tanks.
Western Global tanks have (Return on Investment) ROI potential that exceeds most other construction rental equipment. The rental company chose Western Global tanks over competitors, due to Western’s competitive price, minimal maintenance cost and the cube-shape; often approved for being transported full of fuel.
Other features such as, the four-way forklift pockets for simple loading and unloading, and the sturdy steel frames on the TCG range allows tanks to be easily stacked on top of one another, enables fast and seamless deployment, as well as saving yard space for staff to safely operate.
The rental company purchased 25 tanks of varying capacities at about $5,500 each, the parts, labour, maintenance and inspection costs per tank, on average, was $129 per year. That brings the 10-year cost to own to about $6,790. Considering a 10-year-old tank retains about 40 percent of its original value when sold at auction — a $2,200 value — the total yearly investment per tank is $459. Meanwhile, the company rented the tanks for $500 per month with a 70-percent utilization rate, generating average annual revenue of $3,741 per tank — about 800 percent more than the cost to own. Multiply that by 25 tanks rented over 10 years before being resold, and the potential revenue easily exceeds $930,000.