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How Fun-2-Rent’s Peer-to-peer rental market can boost unit sales for the powersports industry

tl;dr version:
Peer-to-Peer (P2P) rentals allow owners of vehicles to rent directly to people that want to try them out. Fun-2-Rent is a new company that provides the technical infrastructure and the legal and liability protections to allow it to happen. This market can help salespeople at dealerships sell more units so it’s in our interest to promote Fun-2-Rent to our customers.

I like radical & disruptive ideas, especially if they have the potential to be totally symbiotic (i.e. win-win for everyone involved). I like to see people start companies or try out ideas that are contrarian, crazy, and that the established powers deem to be a failure from inception, only to be proven drastically wrong.

I think I’ve just discovered a company that has the potential to become the biggest thing to happen to our powersports industry in a very, very long time.

Hyperbole? Read on, and if you think I’m wrong, then please offer up a substantive counter-argument because I can’t find one thing about this that doesn’t make it a huge boon for our industry at a time when it needs all the help it can get.

If you think I’m right, then I’d say that it behooves you to get on board and spread the word.

The concept I’m writing about is Peer-to-Peer (or person-to-person) rentals (P2P from here on out as it’s establishing itself as the established nomenclature for this type of rental structure), and the company that’s bringing it to our industry is Fun-2-Rent.

First, a bit about the concept of P2P rentals (check out the Wikipedia or the Peer-to-Peer Foundation if you want to learn more about the concepts and check out this great write up in TechCrunch). P2P renting works like this: A person owns a bit of property they don’t or can’t use 100% of the time, which leaves some “down time.” They list their property on a P2P marketplace run by a 3rd party. Another person needs that same bit of property for a limited amount of time. They go to the P2P marketplace to find someone that has what they need at a location and a price that seems reasonable. The 3rd party marketplace facilitates the rental transaction between the owner and the renter.

If you are a salesperson (or the manager of salespeople) and you can’t see the tremendous potential to use Fun-2-Rent to close a huge percentage of business that you would never be able to close any other way, then you are really in the wrong line of work…

The owner benefits because they can generate some revenue from an otherwise inactive asset that can be used to counter things like depreciation, finance charges, etc. The renter benefits in three main ways:

  1. the item in question is privately owned and is therefore more likely to be “taken care of” because it’s a person’s own property.
  2. the selection and variety of rentals is likely to be much more varied and interesting as the rental pool does not need to conform to a “fleet” model that traditional rental companies use to achieve economy of scale in things like service, parts, etc.
  3. because the owner is not trying to run a business but merely looking to generate a small amount of supplemental revenue to offset ownership costs, the rental rate is typically half to one-third the rate of rentals in the general rental market.

As the enabling technology (i.e. the internet) matures, and as the business processes and consumer expectations evolve, you’re seeing more and more P2P rental concepts pop up (and in some cases receive immense start-up funding rounds) in several markets:

Fun-2-Rent is bringing this P2P marketplace to our industry and it’s an opportunity to sell more vehicles. There are a few others like Qraft [CB Profile] dipping into this space, but they are lacking in terms of liability, legal issues, insurance, etc.

F2R is the only game in town in the powersports peer to peer market that has the technical infrastructure as well as the legal liability and insurance protection pieces (for both renter and owner) put together in a nice neat package with minimal friction. I think the idea is, on balance, not only non-threatening, but has the ability to provide a sort of internal multiplier effect in terms of vehicle interest, usage, and thus sales.

If you work at a shop I know you get people calling to ask (potentially on a regular basis): “do you rent _____?” or “where can I rent a ______?” I know that most of you say “No” or “I don’t know” because there isn’t, or you don’t know of, a place where people can rent. The good news is now you do have an answer for this question, and it’s an answer that will eventually result in more of what you care about, vehicle sales.

Now I know that vehicle dealers/retailers typically have a negative, Pavlovian response when they hear the word “rental”:

  1. They don’t want to operate a rental program out of their shop because they have heard the horror stories of the shops that tried it and got sued for the whole ball of wax when some jackass wrapped the rented Harley around a school bus.
  2. They fear rentals because “why would someone buy from me if they can just rent when they need it?”

I’m here to explain to you that what Fun-2-Rent is offering via the P2P rental market is not something that should occupy the same parking space in your brain as other rental concepts. Not only is P2P rental in our industry not a “bad thing”, if we in the industry play it right it can be a very, very, very good thing for us!

Here’s the two primary ways how…

The first way that a healthy P2P rental market is good for us is that it provides a tool to overcome objections and obstacles in the sales process.

If you’ve spent any time on the floor selling vehicles in the last few years you know that getting customers that require (or are considering) financing into a unit is getting more and more difficult.

Maybe they have good or decent credit but are leery of taking on any more payments because they are worried about their job security, their investments, their home value, etc. etc. etc.

Maybe they have less than stellar credit because of age, financial track record, etc. If you’re even able to get them into financing the rates and/or payments are crazy high vs. what the customer wants or is able to swing.

Whatever the reason, they are afraid of assuming the new level of risk reflected in the payment. They want the vehicle, but they are afraid. You need to offer them something that can overcome that fear. Fun-2-Rent is the only legitimate tool you can use unless you have some great stock tips or a “sure thing” down at the horse track.

You whip out Fun-2-Rent’s brochure or show the customer the website and explain to them that if they list their soon-to-be purchased vehicle on this site and rent it for 2-3 days per month via the P2P market, they will essentially be able to own the vehicle for free!

If you are a salesperson (or the manager of salespeople) and you can’t see the tremendous potential to use Fun-2-Rent to close a huge percentage of business that you would never be able to close any other way, then you are really in the wrong line of work…

Even if you are selling something like a $50,000 wake boat to someone that has no issue swinging the payments, or can just plop down the cash on the barrel head, you’re still going to deal with the hesitancy that this vehicle is going to be spending a lot of its life idle. You can demonstrate that all the customer has to do is utilize the highly efficient and effective P2P marketplace that Fun-2-Rent has set up to rent out the vehicle two or three times a month to offset a lot of the vehicle’s depreciation or financing charge.

The Second way that a P2P rental market is good for us is that it create a valuable customer referral loop (i.e. word of mouth sales).

Here’s two scenarios that illustrate how this works:

Scenerio #1:

Joe lives near a body of water and owns two PWC and a trailer that he bought from Sam, his sales guy down at JimBobs Power Palace after Sam explained how Joe could offset ownership costs by renting it out a few times. Even though Joe lives close enough to the lake to use them quite often, he still likes the idea of offsetting some of the costs by using F2R’s P2P marketplace. So he rents them one weekend to Dave. Dave takes them out with his family and they LOVE it. So much so that they decide that they want to get one of their own. So of course Dave asks Joe where he got his… Next thing you know Dave is visiting Sam.

Now think about this… Dave begins with a desire to try out a PWC… Maybe from seeing other people on the lake, maybe it was a TV commercial… Whatever it was, something caused Dave to want to try it out. He jumps on Google and types something like “waverunner rental” or “jetski rental.”

In today’s market, all he’s going to find are a few rental places at marinas that may or may not be where he wants to go.

  • If they are too far away, he never rents, and Sam never makes the eventual sale.
  • If they are where he wants to go, but the rental rate is too expensive Sam never makes the eventual sale.
  • If Dave rents them and they are worn out pieces of shit and his wife is stranded in the middle of the lake Sam never makes the sale.
  • Because the rental places force Dave to assume ALL responsibility for damage to the vehicle if something should happen to it, and ALL the liability if something should happen to a rider, bystander, or other property, Dave rightly does not think that renting a waverunner is worth playing Russian roulette with his financial well-being. Ergo Sam never makes the sale.

Now in a world where P2P rentals are a viable option because of F2R, imagine that there’s four or five folks listing their PWC on the F2R site in Dave’s area. They are listed there because when Sam sold them, he told his customers about F2R. Dave rents Joe’s PWC via F2R. Joe and Dave are both covered for liability and damage by way of insurance that is a standard part of the rental process with F2R. Dave gets the recommendation to visit Sam. Sam makes the sale and there’s another PWC in F2R’s system that can lead to more sales. Rinse and repeat!

Scenerio #2:

A lot of the customers in our market may only own a dirtbike, or a UTV, or a PWC, but almost all of them would like to have the opportunity to at least try some of the other forms of powersports out there. If they don’t have friends or family that own the vehicles, and their can’t (or don’t want to) try their luck with the existing rental options then there’s not much of a chance they will ever expand beyond the powersports niche they are currently in.

This is of course similar to the first scenario, except this time we’re dealing with a P2P rental transaction between two people that are already both in the powersports fraternity, just different houses.

Joe has a Jetski and wants to try a RZR out on the dunes. Dave has a RZR and wants to try a Jet Ski. The each rent though F2R and pay each other $100 day making it basically a trade. Joe likes the RZR and decides he wants one himself. Dave tries the Jet Ski and decides it’s not as much fun as he thought, but he got to try it basically for free because of F2R.

It’s “winning” all the way around!

Now, it’s possible that the above agreement could have come about through some kind of deal on craigslist, but you have to deal with non-vetted users, lack of legal and insurance coverage, etc. No thanks…

With F2R, you have renter and owner rankings (think eBay’s rating system), insurance, liability coverage, etc. all wrapped up in a single one-stop site.

To give a little more info about how Fun-2-Rent works (visit their site for all the details):

  • The owner and the renters both need to have accounts on the site that are linked to a real identity.
  • Owners, renters, and vehicles can be rated just like on sites like eBay so you know if a renter has a history of abusing vehicles or an owner has a knack for putting off maintenance so you’re running the risk of getting stuck in the woods.
  • Renters are required to take online safety course for the vehicle type in question (i.e. online boating safety course for watercraft).
  • Owners and renters are required to get liability and damage insurance through Fun-2-Rent as part of the rental process so everyone is protected.

All-in-all it’s a pretty basic matchmaking system that has efficient safety mechanisms built in that protect the owner and renter about as well as you possibly can. Fun-2-Rent has a rock-solid legal and insurance framework behind them that places them well in the lead of any other P2P outfits that may be out there or may pop up in the future.

Again, I encourage you to check out their site, give them a call, and maybe even try it out for yourself.

The concept of peer-to-peer rentals is here. It’s proving itself out in other industries and there’s a viable way for us in the powersports market to benefit from it. I’d like to think that for once our industry can actually take advantage of technology and business process improvements early on, instead of following the demonstrated mode of not getting on board for 10 years after everyone else has tried. Computerized point-of-sale and inventory control, dealer websites, and e-commerce, are just some examples of technology and practices that are still being slowly accepted in our industry despite long-standing and widespread adoption in the greater business world. Let’s not let the significant potential of peer-to-peer rentals pass us by too.

All you, as a salesperson in the powersports industry, need to do to help make this P2P marketplace the industry accelerator it could be is to:

  1. Know it exists and understand how it works.
  2. Tell everyone you know about it and explain how it can help them get into the vehicle they want.

That’s it! Think about it… There’s no risk for the salesperson or shop. It can help you close deals you would never be able to close any other way, and once word gets out, and it creates a positive customer referral channel right back to you.

All you gotta do is tell people about it. Not a bad deal.

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