![]() That's when your company has a brick-and-mortar presence. The most common and straightforward way, especially for small businesses, is to have their warehouse connected to the shop. Learn how to choose the right products → Storing and warehousingīefore purchasing any equipment, you must plan how and where you store them. Another approach would be to determine the number of items you purchase and calculate how much revenue you can make with the planned fleet size. Typically companies approach forecasts through sales targets which determine how much to invest in equipment, marketing, and other things. These estimates will give you an idea of financial projections and how much you have to invest in equipment to reach your estimates. However, you need to make sales and cost estimates to ensure your business idea is viable in real life. So, you have your business idea and probably thought out how everything will work. Next, we'll cover how to plan and prepare your inventory. Whether you use your savings or finance the rental equipment by taking a loan from a bank, you want to be sure that you're using the money wisely. Inventory can be a rental company's most expensive asset, requiring upfront investments before any sales. Pretty much like playing Tetris with your calendar. It's about maximizing the usage of individual rental assets and fitting in as many bookings as possible on the booking calendar. So, it's not about maximizing the unit sales when discussing rental inventory management and growing sales. Whereas for a company that sells t-shirts, a white t-shirt is a white t-shirt both in the inventory and in the product catalog. Instead, they sell time for the right to use these physical items. Rental companies don't sell physical items. Even though the guided tour and the standard rentals might utilize the same physical assets from the inventory, they are different products in the catalog with their unique value props and price. It can include rentals of different durations, combinations of rentals and services, and insurances, for example.įor example, an outdoor rental shop might sell guided tours in addition to basic gear rentals. Whereas your product catalog is the way you commercialize these assets. The articles and Stock Keeping Units (SKUs) represent your business's physical assets in the inventory. On a conceptual level, it is important to understand that these are not the same in the rental industry. The difference between product catalog and inventoryĪnother difference between renting and selling lies in the inventory and product catalog correspondence. While it is also important for rental companies to source products effectively, the main emphasis is tracking and scheduling the rental assets and ensuring enough stock is available at the right place and time. Whereas for rental companies, it is vital to ensure the products get back in stock at the agreed time so they can be serviced and prepared for the next customer. The direction of goods is one-way, and the focus is on optimizing the cycle from sourcing to sale. When selling products, the expectation is that the seller won't see the sold products again. The two-way – or circular – flow of goods changes the nature of inventory management compared to selling stuff. Rental inventory management is the process of sourcing, storing, tracking, scheduling, maintaining, and recycling your equipment as effectively as possible. Every item in your warehouse or retail store's backroom is part your the inventory. Inventory refers to all the physical assets your company owns and uses as a trading instrument, for example, by selling or renting them out. What is inventory management, and how is it different for a rental business? No matter what equipment you're renting, by reading this article, you'll learn about the basic principles of preparing, managing, reporting, and optimizing your rental inventory. There's a lot to chew and take into account, but with the right tools and processes, your company is set for success. It's a process that has a high impact on both sales and costs – after all, it's about managing and keeping good care of the most critical assets of your business. Inventory management is hands down one of the most essential operational processes of a rental business.
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