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Forging a subrental partnership

Management | June 1, 2008 | By:

Overbooked? Partner up with another rental company.

Companies that find themselves desperate for inventory in the height of their busy season will often subrent from rental companies with products to spare. Whether you are overbooked for a particular tent or rental item, or whether you want to keep your spare inventory moving, entering into a subrenting partnership could be for you.

Chattanooga Tent Company, Chattanooga, Tenn., often subrents its clearspan tents, mostly to other rental companies that get one large job per year and don’t have the inventory to support it. The Alleen Company, Cincinnati, Ohio, is one such company that calls Chattanooga in on the larger jobs. Clearspan tents are “almost like a whole different business,” says Anne Sheehan, of the Alleen Company. “Getting the equipment to the site is an issue, and training our staff—that would be an issue as well.” Sheehan says her company stocks up to 12-meter or 40-foot-wide tents, but the company goes out of town for anything bigger than that. “It allows us to service our customers, when they have needs for bigger things that we don’t carry,” she says.

Like a lot of things in life, subrenting has its advantages and its disadvantages, depending what side of the partnership you’re on. “A lot of it depends onhow you do it in-house,” says Chattanooga’s Mike Holland. “The advantage is, yes, you make money. If you’re renting to someone you trust, the tent only endures normal wear and tear of an event.” And, Holland says, if he rents some 10-by-10s to a rental company and it works out, then that company is more likely to call Chattanooga when it needs a larger tent.

But, he warns, there can be downsides to subrenting. “If it’s not done properly, you don’t get your equipment back,” he says. “We might rent 50 10-by-10s to somebody, and when the equipment comes back, we get a different style that we don’t own. It sometimes takes a little time and effort to get stuff back.” Holland says he once worked on a project where the client used equipment from a few different companies. “When we got it back, we had parts and pieces from every company.”

How to avoid such chaos? Try to load right at the job site, Holland says, especially with larger tents. “We drive to the site, unload it, verify it with the customer. It takes out any guesswork. If my man is there who knows the parts, he has that moment to say, ‘That’s not right.’”

Sheehan says that a subrental partnership allows both companies to combine inventories and work together on bigger jobs in the area. And when it comes to bidding, Sheehan says subrenting allows her to say, “Yes, we can make that work,” even if the right inventory is not at hand. All it takes is a partnership with a reputable company.

“It’s always a good idea to know the reputation of who you’re going to be partnering with,” Sheehan says. “You need to be able to rely on the companies you’re working with to provide the same quality as you would to your customers.”

From the other side of the fence, Holland agrees it’s necessary to be prepared. “Get a feeling for who you’re dealing with,” Holland recommends. “If you didn’t agree on the delivery cost and the condition of the delivery piece in advance, then you really don’t have a leg to stand on [if something goes wrong].”

Competition can be a factor for those subrenting out tents or other inventory. “There is a little bit of an argument that if you subrent to competitors, allowing them to do bigger jobs, then they grow to where they can become a competitor against you,” Holland says. He advises that it’s smart to be aware of the other company’s philosophy: Is it a young company looking to grow, or is the company just filling its customers’ needs in its niche market? “There’s a fine line if you’re working in the same city,” he says.

But for those who need the inventory, calling a friendly rental company can’t hurt. “I don’t really see a disadvantage to it, from our perspective,” Sheehan says. “We’re not investing in expensive equipment, so it kind of takes the risk out of making the investment to purchase that inventory ourselves. It’s a win-win for us.”

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