As technology has improved, more companies are increasingly going online to seek the services that they require. The companies that do not get onto the bandwagon risk losing out to their competition. Digital technology has opened new avenues for businesses, especially in the construction industry, which is looking for ways to make itself more sustainable and cost-efficient.
Today, many construction companies are looking to reduce their overheads and become more sustainable by renting equipment. The demand for renting construction equipment is soaring and the market is expected to cross US$136.1 billion by 2027. So, if you are an entrepreneur planning to start a new business, you should think of starting a construction equipment rental marketplace. Your platform can act as a conduit to connect potential customers with equipment rental companies.
Why is a Construction Equipment Marketplace the Perfect Business Opportunity
Procuring construction is quite an expensive endeavor. A company would have to make a heavy down payment and hence, not all construction companies can afford to do it. That is why you can use feature-filled equipment rental marketplace software to build your marketplace and meet the needs of those construction companies that cannot afford to purchase construction equipment.
Here are some reasons why there is a demand for such a marketplace.
No Upfront Costs
Heavy equipment such as excavators and tracked dozers are quite expensive and require significant capital investment. Construction companies need to plan before they decide to purchase this equipment as returns can take some time to materialize. The money that you spend to procure the equipment will stay tied up until you finish the project and sell it. On the other hand, if you retain the equipment, the value depreciates and that adversely affects its resale value. However, when you rent the same construction equipment, you do not have to worry about your money being tied up and you can use the funds on more important business issues.
No Storage and Transportation Costs
When you purchase construction equipment, you will need storage space to keep the equipment safe from the elements. After all, you have spent a lot of money to procure it and elements could damage it. So, you would have to spend money on appropriate storage space, and each time you need the equipment, you would have to spend money again to transport it to the project site. This can work out to be quite a significant amount, especially for smaller and mid-sized construction companies.
When you purchase construction equipment, you will have to pay taxes on the depreciated rate throughout the life of the equipment. On the other hand, if you rent construction equipment, it becomes a deductible expense and that allows you to save on taxes. Tax authorities view rental equipment as an expense for projects and hence, you can enjoy tax-saving benefits.
Level the Playing Field
Most small construction companies struggle to compete with larger companies as they do not have access to the latest equipment and machines. However, when these smaller companies rent the latest construction equipment, they will be able to take big and small projects without a hassle. Once smaller construction companies have the same equipment as larger companies, it levels the playing field and allows them to compete on an equal footing.
The Way Forward
There is huge potential for an equipment rental platform. The good news is that this platform can generate revenue from the very beginning, unlike so many other online marketplaces. The numerous revenue channels allow you the freedom to select the most appropriate revenue generation model.
Before you choose a revenue generation model, it is important to select the right equipment rental marketplace software. While there are several such software, IdyaFlow offers a feature-rich platform that can be tweaked to suit the need of the business, and as your business grows, you can scale the platform without a worry.
Some of the revenue generation channels that you can make a part of your marketplace are as follows:
Commission: As the owner of the marketplace, you can choose to earn a commission each time a transaction is completed. This commission comes from the vendor’s payment.
Advertising: You can also sell space on your marketplace for companies in the construction industry to display their ads. You can charge the advertisers based on the number of clicks or views.
Feature Listing: This is another way to generate revenue, wherein you get select vendors to list their equipment on the homepage as Featured Vendors or Featured Equipment. This will allow vendors to present themselves before their target audience. It is a highly sought-after service as vendors can attract potential customers and enjoy great returns on their investment.
Subscription: For customers, you can create subscription plans that provide more benefits. Some of the things you can offer are discounted delivery charges, equipment verification, quality assurance, and discounted rental charges. Of course, you would have to work this out with the vendors but if you can get your visitors to subscribe to these services, it can lead to passive income each month.
Regardless of the revenue model you choose, make sure that the equipment rental management software can accommodate it. With IdyaFlow, you have no reason to worry as the software can handle a variety of revenue generation models and can seamlessly adapt to any type of model, including selling new or used equipment.
The Bottom Line
Construction companies have to move with time and adapt to the changes and improvements in the construction industry. Modern technology has made it possible for construction companies to reduce project lifecycles without compromising quality. However, the latest equipment can be cost-prohibitive. That is why there is a growing trend among construction companies to rent state-of-the-art equipment and machinery. But finding a reliable and convenient source can be challenging. That is where an equipment rental marketplace comes into play. It enables construction companies to easily get access to vendors who can rent equipment and machinery at affordable costs.
So, if you are keen to create a successful online marketplace, it is time to sit down and plan a construction equipment rental marketplace using the right software.