Be it renting a bicycle for the day or a car, the online rental business scene has now expanded beyond the transportation industry into clothing, lifestyle, accessories, and even art! Did you know that you can now rent a tie, a purse, a necklace or even a painting for a short or long period of time for a monthly subscription or one-time payment?
Even considering the ordering time, dry-cleaning costs or logistics, you still spend only a fraction of the original price. Considering all of these factors, it’s no surprise that people are extensively preferring rental services over buying premium or expensive items for special occasions.
Running a Rental Business – An Entrepreneurial Perspective
Online rental businesses are becoming a viable business opportunity owing to their popularity today. They are a sound way of maximizing profit margins with a venture that can scale quickly, requires reduced capital investment, facilitates long term customer relations, and provides an immense opportunity for growth.
There are generally two platforms you can run your online rental business on – a virtual marketplace and your own website.
Option #1: Deploying Your Products on a Marketplace
Marketplaces are a good way to start your business when you are in the process of building your brand and creating a niche for yourself in the market. They provide a quick and simple start as well as an additional channel for your business. You should ideally sell on a marketplace when you have a reasonably lower number of products. Marketplaces are pretty reasonable to advertise on or to get your products ‘feature listed’ on. Naturally, they provide a great kickstart for your business.
Option #2: Building Your Own Store
In the meantime, it’s always advisable to start building your brand and selling on your own website as well. Building a website is feasible when you have, say, over 30 different items to sell. As opposed to a marketplace, your website has only your products. This makes your store an extremely powerful tool in your branding and marketing arsenal.
Starting to sell on your website is a great way to increase your profit margins and maintain them. It’s also the best way to build a strong brand presence when you’re in a position to scale.
All things said and done, there are some important aspects to consider before starting an online rental business. Although it’s a sound business idea with good prospective growth, basic concerns cannot be overlooked.
The 4 Important Questions to Answer before Starting an Online Rental Business
How much capital will I need?
That answer depends on how your venture pans out. If business picks up quickly, you will need to purchase a larger number of products in a fairly short amount of time to cater to consumer demands. Depending on the type of products that you are renting, you should be able to arrive at an estimated value based on your business trajectory.
How do I Stock to Scale?
Now the trick to stock is ‘smart’, not stock ‘more’. Don’t overspend on stocking up inventory right at the start. Buy a minimum required amount and then observe the business trends. Is your business picking up immediately or is it taking time?
Assess the demand for a certain period of time before investing further in inventory. You don’t want to be stuck with products that are not as popular among your customer base. On the other hand, you can’t be struggling to keep up with the demand of the best-sellers on your store.
What will the replacement costs look like?
The risk of running an online rental business is that of product damages. If a product comes back in damaged condition, you’ll be incurring additional costs to replace it. You need to consider the type of goods you’re renting out in terms of fragility.
Can they be easily damaged? What percentage of your products are likely to come back damaged? How much is it going to cost you to replace the product?
Depending on all of these factors, you need to fix your ‘security deposit’ amount. Now, coming up with this pricing can be quite tricky. That’s because your security deposit can by no means be high enough to push away your prospects or low enough to cause huge losses.
What about logistics?
Logistics is an important aspect to bear in mind, especially when you’re renting out products. This involves the warehousing, shipping, storage, and also the cleaning, maintenance, and refurbishing of your rental products.
What kind of processes does a product go through when it is returned and before it is shipped out again? Where are you going to store these products? What delivery channels are you going to use? Take all these factors into consideration beforehand, because logistics is a critical part of online businesses.
Once you have these fundamental aspects taken care of, the next step is setting up your website. WooCoommerce along with its extended arms – WooCommerce Bookings and WooCommerce Subscriptions – makes for a solid foundation of a Rental Products business. Let’s check out some features that are critical to any Rental Website.
Setting Up your Rental Business Website on WooCommerce
#1 Create Organized Listings
Listings are a critical part of any product-based eCommerce website. They ease the search process for your customers and improve the discoverability of the products on your store. Your rental products need to be sorted and listed based on various metrics, like popularity, availability, price, type, category, color, size, etc.
You’ve got three options to get this implemented. One of them is to use WooCommerce’s built-in shortcodes. Now, these shortcodes will work just fine, provided you have only a limited number of products on your store. That’s because you have to manually create the listings.
However, when your business starts to scale, you’ll need a more dynamic listings feature. This brings us to option numbers two and three – customization and an off-the-shelf plugin, respectively. Custom solutions are always the way to go when you look at it from a long-term perspective. Having said that, the WooCommerce Product Table and WooCommerce Quick View are two great plugins that play well with each other and allow you to significantly extend and enhance your listings feature.
#2 Add Advanced Search
A plugin like WooCommerce Product Finder can easily take care of all the basic search requirements of your website.
However, when it’s a rental products website we’re talking about, you can’t overlook the ‘availability’ of your products. In this case, a tool like the WooCommerce Bookings: Availability Search Widget would be a great fit.
#3 Enable Bookings and Subscriptions
WooCommerce Bookings is an extremely versatile plugin that you can use in order to allow your customers to book or reserve products for particular dates.
Subscriptions, on the other hand, are a great way to retain your customers. The WooCommerce Subscriptions plugin can help you to acquire and manage subscriptions on your website. You can enable your customers to subscribe to your website and create their accounts, which you can then manage from a single Interface.
#4 Add Wishlists
Wishlists allow customers to save products that they have liked and want to revisit later. While it may seem like a very basic feature to have on your website, there’s a lot more it could do for you. If implemented well, a wishlist functionality on your website serves as an excellent conversion tool!
#5 Integrate Calendars
A calendar would enable your users to select the dates for which they want to rent your products. More importantly, it’s supposed to help you to plan, schedule and seamlessly manage the availability of your products and your backend inventory processes.
While WooCommerce comes with a range of calendar plugins that can help you out here, seamlessly integrating it across all systems can be quite tricky unless you know exactly what you’re doing.
#6 Allow Social Login and Sharing
Some users prefer to sign up using existing credentials instead of creating new ones. Needless to say, the ‘barrier to entry’ of your store needs to be as low as possible. The WooCommerce Social Login plugin allows your customers to sign in using social media login credentials. This also enables more social media sharing, thereby fostering publicity and a wider reach of your business.
#7 Payment Gateways and Checkout
Payment gateways are a fundamental part of any eCommerce website. WooCommerce has the capability to integrate with popular payment gateways like PayPal. All you need to ensure would be a swift and easy checkout process.
#8 Product Tracking
All good eCommerce websites have product tracking functionality that enables their customers to track the shipment. If that sounds like something you want to enable, you can make use of plugins like WooCommerce Shipment Tracking or YITH WooCommerce Order Tracking.
#9 Inventory Management
WooCommerce allows you to manage products in terms of checking quantities, setting up alerts or sorting products based on various characteristics. When we’re talking about a rental products store however, these default capabilities of WooCommerce won’t really suffice. You can use plugins and extensions like the Smart Manager for WooCommerce and Bulk Stock Management by WooCommerce, that’ll help extend WooComerce’s default functionalities.
#10 Add Customer Messaging Tools
Check out platforms like Crisp and Zendesk in order to set up a seamless messaging and customer service portal for your website. These helpdesk tools allow your customers to leave their comments and queries for you to get back to them. All major eCommerce stores use such tools as they are crucial to maintaining a good relationship with your customers.
#11 Support Reviews, Ratings, and Feedback
Collecting Ratings, Reviews and Feedback from your customers is extremely essential. Customer reviews and recommendations are often considered as the most important assets for building credibility and trust among your existing as well as your potential clientele.
Customer feedback can prove to be a major advantage when given due importance. While the positive responses become your confidence-booster pills, the suggestions and negative feedbacks give you an overview of a much-needed customer’s perspective and help you improve and better your offering.
Starting an online rental business is not difficult provided you answer the important questions related to capital, stocking, and logistics. Your website needs to have all the essential functionalities ready and working to ensure maximum customer convenience.
Having said that, you need to make sure you keep the dependency on third-party plugins as minimal as possible. If a piece of custom code can handle your requirements, avoiding the use of too many plugins is always advisable. At the very least, you need to ensure all of the plugins and extensions you’re using ‘play well’ with each other.
Also, never underestimate the importance of good UI and UX. The interface and experience design of your website goes a long way in building a strong, and credible brand at an extremely fast pace.