Rental Management 101: Introduction to Rental-Module 3: Dealers Need Rental

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The revenue mix within a dealership is crucial for its profitability. New machine sales have seen a decrease in gross profit margin, while used machine sales have fluctuated. Rent-to-rent has shown much higher gross profit margins compared to new machine sales. Parts business has remained stable, while service has decreased in revenue percentage. High-performance dealers have a different revenue mix, with less dependence on sales and a higher percentage from rent-to-rent. It is important for dealerships to embrace rental services to improve profitability and adapt to market trends. Rent-to-sell is a tool used to put sales deals together and create used machines. It involves using rental charges as a down payment and accelerating depreciation to lower the sale price. Rent-to-rent, on the other hand, focuses on renting equipment and generating higher profit margins.

Keywords

revenue mix

profitability

rent-to-rent

used machine sales

high-performance dealers