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Gear Rental Feasibility - Help Appreciated
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Chris Muthig
(cmuthig) - M

Locale: Georgia
Gear Rental Feasibility - Help Appreciated on 09/19/2011 19:10:30 MDT Print View

Hopefully this will end up being the correct place to post this. Any help is very, very appreciated.

My girlfriend is currently taking a course that requires a group of people and her to do a feasibility study on a possible business, and with my obsession with making gear (I would love to sell it some day) she suggested that they do something with ultralight gear. To try to change things up a bit and be creative, her thought is to a have a sort of rental company. I'm just looking to see if there would be any interest in the idea before they decide to base their whole semester on this.

So the basic idea would be to have quality ultralight gear available for customers to rent for a weekend or some period of time. If they liked the gear, they would then have the option to purchase the gear for the retail price, minus what they paid for the rental. So if it was a $150 piece and they paid $20 in rental, they would owe $130 and just keep the piece.

The idea is that a lot of companies out there have amazing options on gear, but it is really hard to know if it will work for you unless you actually have it in your possession. Currently the options are to borrow someone's gear or to just buy it and possibly return it, or sell it on gear swap if it doesn't work out the way you hoped. So this would give a way for people trying out ultralight practices or just curious if a different style tarp, for example, would work for them.

Now that the general idea is out there, I have some questions about it all.

Would any of you have interest in this type of deal?

How long would you want to rent the gear? A thought is that people could rent for the weekend for a set rate, or they could do a year subscription and rent pieces for longer than that and only pay the shipping on the pieces.

What kind of gear would you be most interested in renting? Tarps, backpacks, quilts? Any other thoughts on gear you would like to be able to rent as either a way to not have to actually own it or just as a way to try it out?

Would you prefer a subscription or just rent it for the week/weekend etc?

How much would you be willing to pay to rent pieces of gear, including shipping? Think cuben tarp, dyneema-x backpacks. Assuming quality gear.

Thanks for any help you can give me. I'm very interested to see what thoughts are.

Landon Adams
(Landon) - F
Gear Rental Feasibility on 09/19/2011 19:33:42 MDT Print View

I might not be your target demographic because I have no gear but I think it's a great idea. I am researching all this gear to try to figure out what I need to get started into backpacking. If your idea was real I could try out different things with the option of buying what I liked and knowing what I don't like. It would be according to how much it costs but it would really be something I would consider. It would be great to try out a tent vs. a tarp for a weekend then be able to make an educated decision on what I wanted to buy. I believe it would all depend on costs.

Jim MacDiarmid
(jrmacd) - MLife
Gear Swap on 09/19/2011 20:37:06 MDT Print View

Well, for quite a few of us, the Gear Swap board fills the 'gear rental' gap. Either we pick up stuff at a discount to try out, or we pay full price with the knowledge, that, while there are no guarantees, we'll be able to re-sell that gear for a slight mark down + shipping costs. You don't always get back as much as you want, but at least you won't completely lose your shirt if you realize a 5'x8' cuben tarp is not for you. Sometimes you can even resell for near full price so people can avoid the 4-8 week wait for brand-n

Most cottage places essentially rent their gear now, for the cost of shipping. I 'rented' 3 backpacks before settling on my GG Gorilla. I returned the other two, one to REI an the other to ULA. It cost me $25 round-trip shipping to try an Ohm, but it was worth it to get the right pack. I couldn't take them out of the trail but I was able to load them up and wear them around the block a few times. I did the same with sleeping bags, buying 3 and returning two after trying them out for sizing at home. I'm sure that happens with shelters all the time, getting set up in backyards and even slept in for a night, just so long as you can return them in 'new' condition.

A place like REI does decent business in gear rental, especially, I think for pursuits like winter camping, where the customer has no idea if they're cut out for it and so doesn't want to lay out $400 for a 0F bag and $150 for a pair of snowshoes, etc.

That said, I'd be interested in the possibility of renting gear for a weekend to try out, but off the top of my head, I'm not sure what my price point would be. For example though, Bearikade sells their Weekender canister for $225 and rent is for $5 for the first 3 days and $2.50 for each following day. Shipping varies based on location, and granted the Bearikade is a rather indestructible product compared to a cuben tarp or backpack, but for my upcoming 6 day trip to Yosemite, I could've rented the Bearikade for $40 shipped ( I live on the East Coast)or less than 20% or the full retail shipped cost. For a weekend, if you lived in CA, it'd be $19, or less than 10%. In my case, So those are the kind of price points you're looking at.

Also, I'd be more interested in renting from an established manufacturer of UL gear, like MLD or SMD. I might be 10% of retail with the option to buy + shipping for something like the MLD Trailstar.

Edited by jrmacd on 09/19/2011 20:40:56 MDT.

Kier Selinsky
(Kieran) - F

Locale: Seattle, WA
Two Problems on 09/19/2011 21:03:22 MDT Print View

OK - it's always easier to poke holes than come up with solutions, but here's a couple issues:

Lightweight gear - these are typically cottage manufacturers. Will they be able to scale their manufacturing to what you need?

REI Rental - say you get away from lightweight due to the above issue. Why wouldn't I just go to REI? They tend to have stores near major recreation areas, and their rentals are dirt cheap for members.

I wouldn't count on people buying gear after renting it for a trip. It has the Rent-a-center "ick" quality. Look more towards the rental car model - purge regularly at standard intervals.

If she hasn't learned it yet, she should learn that business is beg/borrow/steal, so steal rental biz lessons learned from other industries: rental cars, rent-a-center, redbox, netflix (pre-current-implosion), and zipcar (very interesting niche model).

Stretch: could REI's extremely generous return policy for members be considered a rental policy? Hmmm...

Cheers!

Ken Thompson
(kthompson) - MLife

Locale: Behind the Redwood Curtain
Re: Gear Rental Feasibility - Help Appreciated on 09/19/2011 21:26:29 MDT Print View

To have all the gear required and enough of it to be rented out so you can pay the bills would be an enormous amount of capital to begin with. What about the seasonal aspects of the business?
I think it would being done if was a good business model.

James Byrnes
(backfeets1) - M

Locale: Midwest.... Missouri
Re: Gear Rental Feasibility - Help Appreciated on 09/19/2011 23:19:47 MDT Print View

Most experimentation with gear tends to center around concepts like tarp vs tent , sleeping bag vs quilt, what size pot to use ect. So that being said, there is no need to rent the lightest cuben materials. Weight isn't the issue for adoption of techniques.

Ryan Krause
(rmkrause)

Locale: Pacific Northwest
A perhaps even closer example on 09/20/2011 01:02:39 MDT Print View

Besides rental cars, furniture rental, etc - a closer example to backpacking gear is scuba diving. Any dive shop worth it's salt rents gear: wet suits, fins, masks, regulators, etc. Many however don't find it a profitable enterprise - however customers would complain if they didn't (especially with all the baggage fees airlines charge now a days). Many shops replace their gear yearly and prior years rentals are sold off really cheap. You guys could go down to a local dive shop and see what they would share about their rental operations. Don't know where you are located, but even land locked states have dive shops - many people dive in lakes.

Another case study is with very high end purses and jewelry: http://www.bagborroworsteal.com

Chris Muthig
(cmuthig) - M

Locale: Georgia
Thanks for the Responses on 09/20/2011 06:47:08 MDT Print View

This has all been very helpful. It seems to me that there is more interest from people getting into ultralight than already in it, not just here but other people I've asked.

I think my girlfriend is gonna sign up for the forum later (maybe she'll get addicted too. I can only hope), and she has business type stuff to ask, I think.

Landon, you would be a good target audience. What kind of price would you be willing to pay to rent gear for the weekend?

Ken, when you say seasonal aspects, what kind of things are you thinking of? This is one thought that had come up as well, but I wasn't sure what kind of gear would fall in that category. My experience with seasonal gear is limited. I'm in Georgia, so our cold season doesn't range to extreme colds.

I knew about the gear swap working well for most people, but I got into making my own stuff almost immediately to save some money. So I never really had the need to use it in this kind of way.

Any ideas people have are very welcome. Punching holes in the idea is fine. At least she can still change the plan for her feasibility study at this point if it falls through here.

Ty Ty
(TylerD)

Locale: SE US
Backpacker on 09/20/2011 08:40:31 MDT Print View

There is a gear rental place that advertises in the back of Backpacker Magazine if I remember correctly. It looks to be more traditional style gear but the ads appear kinda old school and give me the impression that they have been in business for a long time. That might be a good model to take a look at.

The advantage is traditional gear is sturdier and probably holds up better to novice use and abuse. Also the ultra-light backpacker is often the more experienced backpacker and is someone that would want to own all their gear.

As far as trying stuff out, yes I for example am debating right now between a TT Moment and ZPacks Hexamid Plus. If I could rent the two just for a day to set them up in my backyard I would do it, but the price I would compare rental to is what I could buy both for and re-sell one in Gear Swap. I imagine if I had a Moment or Hexamid, never slept in, set up one time in my back yard, in hand and ready to ship...I could sell either one for VERY close to the original purchase price. Unfortunately that does not leave much room for rental profit margin in my mind. Like someone else said, I think people will pay cost for something like that just to beat the wait time for manufacture.

Richard Lyon
(richardglyon) - MLife

Locale: Bridger Mountains
Gear Rental on 09/20/2011 10:46:43 MDT Print View

I'd be worried about the size of your market. Most of this forum's members are LW, UL, and SUL but that's a small corner of the overall camping gear market. REI's rental fleet includes car camping gear and much more than straight backpacking stuff. So you're in a niche and one that tends to include higher priced items, making your inventory costs on the high side.

I'd worry about theft/non-returns (maybe covered by a deposit) and competition from the Gear Swap too.

All that said, I'd certainly look at such an operation if I were curious about a piece of gear - especially from a cottage manufacturer whose goods I couldn't examine in person.

Good luck!

Ben H.
(bzhayes) - F

Locale: So. California
Excellent Idea on 09/20/2011 10:52:11 MDT Print View

I think this is an excellent idea... with some problems.

First the good... I think cottage gear makers biggest problem is convincing people to buy their products without ever seeing it. This could help alleviate that problem: "Don't buy it, rent it for the weekend!" Some people mention gear swap as filling that void, but gear swap isn't for everyone. Not everyone wants to go through the hassle listing and selling equipment on gear swap. Plus you have no guarantee what you will get back. Your business model has set rates. People know a priori what they will spend.

The problems... 1) UL gear is not as durable as the stuff they sell at REI. That means you would have to rent at a higher margin than REI. Plus... unless you have a storefront shipping costs will be substantial. 2) Many cottage manufacturers are able to offer gear at competitive prices because they have limited or no inventory. Your business model would require inventory which will increase costs. You can't keep 100 bags in inventory and sell them for the same price as someone who has no inventory. 3) "The used equipment conundrum" Say you rent out a new piece of equipment. The guy decides he doesn't want it and returns it to you. You now have a used piece of equipment. You can send it to someone else to try out, but now he is deciding if he wants to buy a piece of used equipment.... you can't sell it to him for the new price. If you only rent out used equipment, you can't keep selling off your barely used equipment at used prices. You now have two sets of inventory: used and new equipment. You have to have rental and purchase prices for each one. Most rental places have rental inventory and new inventory that is for sale. The rental inventory gets sold off every year in a garage sale type event. This does not sound like your business model.

I think this is a great idea, but you have to be very careful about formulating your business model. The one thing that I see would be most critical is to form business relationships with a core group of cottage manufacturers so that prices can be set that works with your business model. You are probably going to need them to agree to put higher margin on there MSRP (which makes their product less competitive :( )

dallas shewmaker
(dallasshewmaker)

Locale: Southwest
Re: Gear Rental Feasibility - Help Appreciated on 09/21/2011 02:12:32 MDT Print View

I'm the guy 'in the back of Backpacker Magazine' - LowerGear - mentioned above that does the online rentals. Despite our evangelism on the topic at our retail store, we only get a few rental requests for UL items that we rent and sell - ULA, Granite Gear, Tarptent, GoLite, Terra Nova etc. The comments in this thread that this concept would be a small niche within a small niche are correct. You can't rent a UL backpack for instance unless you have compact, UL gear to fit inside. And no company is going to carry an inventory of expensive UL sleeping bags for rent that would be appropriate for a UL pack - they would not survive the cleaning process required after every rental. We talk to some of the cutting edge UL manufacturers about trying to rent their gear from time to time, but they don't do enough volume to be able to discount their prices down to a wholesale level to make rentals feasible. And many believe their gear is too "sophisticated" for rentals - (read: leery of warranty issues). So, that's why most rental gear is in the more mainstream, durable lines, or if UL, mostly done via the Gear Swaps, etc.

Edited by dallasshewmaker on 09/21/2011 02:15:28 MDT.

Terry Trimble
(socal-nomad) - F

Locale: North San Diego county
Gear Rental Feasibility - Help Appreciated on 09/21/2011 08:15:50 MDT Print View

The problem as most have pointed out is gear durability of ultra light weight backpack gear. Most of the gear rental companies rent out gear. Only Rent heavy duty durable equipment like REi,Adventure 16 . Because the odds of it coming back in once piece are pretty good compared to light weight gear.

Plus I think the only way it could work is if you lived in the eastern Sierras in PCT trail town or near the Appalachian trail and own a brick and mortar store so people can walk in rent gear and purchase gear. What happens generally is gear is so cheap now day they will buy it off your shelf instead of renting it or they may rent a tent , sleeping bag,stove,bear can and purchase the pack.
Terry

Edited by socal-nomad on 09/21/2011 08:18:48 MDT.

Chris Muthig
(cmuthig) - M

Locale: Georgia
Thanks Everyone on 09/21/2011 10:54:16 MDT Print View

Thanks for all the replies. These were all worries that had come up before, the hope was that by posting here she would be able to know how big some of the issues were. I think she is sticking with an ultralight market, but has decided to go a different route other than rental gear.

Again, thanks for all the great responses. It really helped a lot.

Lawson Kline
(Mountainfitter) - M

Locale: LawsonEquipment.com
Gear Rental Business on 09/21/2011 14:56:33 MDT Print View

I think you could make a business like this work BUT you would need to go after a different target audience. I would say the best audience would be more family oriented. You know car campers that go on one or two trips a year and plan them well in advance. This group usually doesn't know much about camping so they would rather click a few buttons on a website then waste time looking up what kind of gear they need. In addition to this, they don't want to pay money for all the required gear to only use it one time a year. This type of gear is usually very inexpensive and you can buy it all at wholesale so you wouldn't need as much capital to start. I would say after one or two rentals you could probally pay for the gear which means higher profit margins and more cash flow. Another plus about this group is they most likely will rent alot more then they need which means more profit. With all that said. I went car camping one time with a bunch of friends and we ran into a couple who had never been camping before and rented all their gear. They rented a four man kelty tent, two cheap looking sleeping bags, two backpacks and an full size air mattress and I think they paid something like $200. I am not sure but I would say the gear only probally cost the rental company $200 wholesale so they paid for everything in one rental. So I think it could work but as long as you go after the right customer.

Edited by Mountainfitter on 09/21/2011 14:59:49 MDT.