$6.3bn rental market expected to rise through to 2024
Revenue for the furniture, appliance and equipment rental industry has risen at a slow pace over the past five years, reports IbisWorld. It estimated the total revenue in this sector for 2019 was $6.3bn with a profit margin of 20 per cent.
However, the analysis firm in 2019 expected the revenue to rise over the next five years. IbisWorld has not yet revised its analysis of this sector post-pandemic.
So while lower unemployment, limited growth in discretionary income and declining household debt have kept rental growth at just 1 per cent for the past five years, the aftermath of the pandemic may see a lift in demand – if the sector follows form. It is a partially counter-cyclical sector which means uncertain or weak economic conditions tend to boost business for rental firms.
IbisWorld predicted a slight rise in revenue of 1.4 per cent through to 2024.
The sector remains highly competitive.
How can you get into this sector?
Rent with Style operates in the furniture and appliance rental space.
It’s a national operation servicing a broad customer base in both the residential and commercial markets.
Whether the customer is small business owner hiring laptops and computers, a single parent needing a washing machine, or a family wanting to install an outdoor setting without the upfront cost of a purchase, Rent with Style can rent out items from leading brands.
Consumers can hire washing machines, fridges, computers, laptops, TV, home theatres, mobile phones, indoor and outdoor furniture.
This Aussie business has been trading since 2012 – it started franchising two years later.
Franchisees benefit from ongoing training and support, and can access cloud software solutions to manage the business.
A distinct difference in this particular business model is the option for franchisees to either pay fees monthly, or on an annual basis.
It’s a lean business with no staff required, no need to maintain stock, and it operates within weekday 9-5 hours.
Marketing support includes social media, flyer distribution and helping set up shopping centre kiosks.
So what does a franchisee need to bring to this business?
Customer service, of course, and a commitment to drive and grow the business are key skills the franchisor is looking for.
Franchisees sign up for one five year term, and have an option to renew for a second, and third term.
And it’s a budget buy – a $29,000 capital investment.