I wonder how successful it would be if Audiogon established an advertising page just for manufacturers who were willing to rent a demo piece of equipment or who offer a 30-day refund period. Would members be interested in that? Jeff
The advantages for the manufacturer to offer this service include: they are not required to cut out the brick and mortar store or distributor; they have the lowest cost invested in the demo; they control the number of demo units on hand and thus their investment level; the investment on behalf of the audio community is spread across many versus one; and they already have the tech support in place to keep the demo operating. Last, they could charge for the service. I doubt they will make money on the rental, but the good ones will increase their sales by getting their product into the hands of more consumers. Last, a list of such suppliers on audiogon is an inexpensive way to get their product into the eyes and hands of their demographic most likely to buy, especially in areas where they have no retailer (not that many retailers will loan you the component anyway). |
Welcome to the problem dealers have trying to keep their store stocked with high end gear only to be borrowed and then someone buys it off audiogon.... One of the dealers I frequent said that he has to sell 7 units of an item just to pay for his cost on the floor model. That's a lot of sales plus rent to have floor (demo) models... and you guys wonder why brick and mortor stores need the margins that high end gear offers?? Plus 2 channel gear is a dying market for retailers. Almost all of our local retailers are changing their stores to be hometheater centric because that is where families are spending their money, plus their original 2 channel customers are dying off..
The only reason the cable company makes money is not with the 5% rental but selling cables at full retail because people don't want to pay the 5% rental fee.. but it's also a way to actually save money buying and selling cables on audiogon to find out what fits in your system.
Also shipping cables is a lot cheaper than charging someone $140 for shipping roundtrip on a rental of gear... Honestly the projector rental example really does show what it takes to be profitable. Tube Gear would be impossible. Then you have to also watch out for fraud, as my dealer sold an item on ebay, the guy said it didn't work and he wanted to return it, and the buyer sent back a different serial number which was broken......
If you wanted to do a rental or tweakers (footers, isolation, and maybe power conditioning) that might be another market which would have a lower inventory cost and broader appeal.. still I think this is a great idea but there is no market for it at what people WANT to pay. |
things are so tuff out there that many small manufacturers are willing to put products on the floors of key retailers on consignment. the inventory investment to carry a real variety is making it impossible for a proper business model. virtual stores risk less, but in any case renting is accident waiting to happen. |
narrod you are right i am seeing the light on this one.just because i would like the chance to rent i can now see it is not profitable.oh well.this is why i mention the idea here on audiogon.you get professional results from the mwmbers.thanks all for the input. |
Gotsouldr, build the business case. Determine how many pieces you need to have steady rental income. How well are you capitalized? How long a payback period can you handle before realizing a profit? For example, a $6000 product (your cost) rented at $500 a month will require 12 monthly rentals before you break even. Can you live with that? Is that a reasonable and realistic payback period?
Is this going to be a business or a hobby? How much money are you willing to risk to see if this is an idea with legs? It sounds like a terrible investment to me. Of course, I think anyone who chooses high end audio as a business is a little odd. It is, I believe, a small and getting smaller business segment. Only invest what you are willing to lose. Good luck. |
Rayd and Gotsouldr, the audio recording industry and the sound reinforcement industry has tons of rental companies also. They cover 32 pages of the NYC business phone directory. |
well it is a idea and i appreciate the feedback.i guess i am looking at my own interest here.i would love to rent a mac tube and see how it sounds in my system.you guys know how it goes.you see something on audiogon you would really like to buy and when you get it in your system low and behold--"it sucks"this happend to me several times.next thing i am selling the piece back audiogon and hope to get close to what you paid for it.i like the figures rayd has gave(i could live with those numbers).also to protect from damage the person will have to have a credit to cover the unit.when it comes back to me with no problem we would then release the credit.ok guys jump on this thread. |
If cable co charges 5% plus shipping, then I think you would have to at least double that to cover damages. In some ways, isn't that what Audiogon is all about? A larger initial investment, but then resell and take a small loss aka rental charge? |
Warnerwh,
What and where are these two stores in Portland?? I am visiting there in September and would love to checkthem out.
KT |
The cable company charges 5% of the retail price plus shipping both ways. That 5% is put towards the price of a cable or other item if you buy it. Your percentage may have to vary but this may give you a view of how to charge. A good reliable way to try say amps or preamps to start may work, just some ideas. Good luck and keep thinking. |
As others have said, interesting idea, but......I work in the video field and I know a lot of companies which have rental departments. Here's a reference from the video world: a 2000 ANSI lumen LCD projector, sell price of about $2000.00, will rent for about $100.00 a day, $450.00 a week, $1500.00 a month. A 6000 ANSI lumen LCD projector, sell price $7500.00, will rent for about $250.00-$350.00 a day, $1000.00 to $1600.00 per week, $3000.00 to $4000.00 per month. Now these are estimated but realistic figures. These are the dollars you would have to charge to be profitable. I think these prices would transfer to your rental business as amps and preamps easily approach the $6000.00 level. Your inventory would be tremendously expensive. You need to have a repair department, a shipping receiving department, someone to handle the paperwork, plenty of storage, etc. Will people pay these rates (and more) for equipment? What would people pay for equipment? If you had any given $7000.00 preamp, what would the market bear for a daily rental? Let the Audiogon members help you.
Rayd |
I would love it, but I don't see it flying as a viable business. On the other hand, wouldn't it be nice if many more manufacturers kept a component or two for test rental purposes. Of course, many manufacturers could do this but don't since the reality of the component often does not live up to its marketing and reviews. But, for those who really are confident in their product it would be a wonderful service. |
Now if you also sold used high end gear it may work. I keep thinking of asking Kurt at Echo HiFi here in Portland if he'd rent me a tube amp. He will give you whatever you want with a money back guarantee though so that may be better yet.
Btw there's two used audio stores here in Portland. One carries purely high end while the other also carries vintage and lower grade high end although I've seem some Mac gear in there too. Both of these stores have been thriving for years.Kurt's store is downtown where rent is no doubt very high. He also has very good prices, about as good as Audiogon only you get a 3 month warranty. He's not getting rich but is doing fine. |
Keep thinking. Every great idea was preceded by a thousand bad ones. |
This will never work, you may aswell stick your money in a paper shredder. Anyone serious with high end gear can deposit for a demo wich is what you are pretty much offering. This business couldnt survive on long term rentals unless you had unlimited income and didnt care about a profit, and didnt mind the very high chance of damage. I admire the whole new idea process but how could you make money on small rentals on one piece of gear, multiply that several fold for your start up inventory and it would take years to break even, in the meantime you need to invest in current products to stay relevant and it gets even harder to justify. Maybe someone smarter then I can figure out a way this would work, but I cant see it. |
well they it would work is i would buy stereophile recomended components class a and b.rent the units for 1 week intervals.if you want it for a month that would be 4 rental intervals.i would take special reguest only if the unit is highly recomended. i would put out a list of what is avalible for rent.the problem would be to figure out a rental price for a particular unit. |
Sounds GREAT!....I want to rent some Wolcott monos for six months, or so.... (winter time would be best for me).
Dave |
Sounds great I would like to rent a Krell 402 for about $20.00 a month let me know when it is available. thanks in advance. |
