this post was submitted on 06 May 2024
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This sounds neat until it's run for profit.
There is a business in my town. There's probably one like it in your town. They rent power equipment. Anything from pressure washers to bobcats to bouncy castles. And as a man who has needed to drill precisely 8 holes into a concrete slab in 37 years, there is a genuine value proposition in renting a hammer drill for an afternoon compared to buying one.
This week's rental for me:
Not going to buy those things or pay someone to operate them. It's a good deal.
We’ve got this & a local option!
Rentals seem extremely expensive in my area. $100/day for a shitty 4" wood chipper, $300/day for 6" chipper. For some tools, it's often about the same price or cheaper to buy a tool from Harbor Freight than to rent.
Ah, but is it? A quick search shows wood chippers ranging from $400 to $2400. If they're renting out the $400 model, yeah, you come out ahead by buying even if you're only chipping things on two weekends (and you could resell on craigslist or something).
But if they're renting out a $2000 model, I'm not sure how fair it is to compare to the $400 model (I'm not a wood chipper expert).
Wood chippers might be a bad example. I'd think if you need one, you need one multiple times -- chipping branches every fall at a cabin, things like that.
But overall, yeah, you make a good point that the rental prices can change the tipping point in rent vs. buy.
Sorry, I was unclear. Chippers are not the tools I was thinking of that would be cheaper to buy (a low quality version of) than rent. Was thinking more about stuff like torque wrenches and rotary hammers. Chipper rental prices were just one thing I was looking at recently that seemed way out of line with what other people from other regions were paying.
Ha, fair enough. Yeah, a quick search shows low-end torque wrenches available for like $25. It's hard to see a rental making sense at that scale.
How would that ruin it?
Modest profit isn't an issue, but most businesses of more than a certain size accumulate MBAs like some kind of parasitic fungus. They then proceed to wring out as much money as possible in the short term while destroying the business in the long term.
If it's just a local guy making 5% or so a year off his one rental shop, that's no problem.
Yeah pretty much. There are behaviors that are profitable but not good for the community.
Competition solves this.
The problem is maintaining competition. Another thing those MBAs salivate over is the idea of buying out the competition, and their squeeze-the-company-dry method can give them just enough money for just long enough to buy a competing business to run into the ground when the original one starts to give out. Like I said, parasitic fungus: move to a new host as the old one dies. Keeping them from spreading can only be accomplished by stronger government regulation than many people seem willing to see in place, alas.
Government regulation is needed for a healthy capitalism country yes.
In a purely profit business, you price things based on how much people are willing to pay for them.
That translates into things never being priced as being “worth it”, but almost worth it, and definitely not worth it for people with tighter budget
There's a local store that rents outdoors gear (climbing stuff, camping supplies etc), it's for profit and it's great. Would be way cooler if it were a library, but the local business is totally affordable and easy.
I've used it several times. My friends and I plan an outing and plan supply pickup/dropoff as part of the outing.
So, the key is to run your business for loss. Wait, that’s called a charity, not a business. How is this thing supposed to work?
Libraries don't make a profit, AFAIK. Non-profits and co-ops are things too.
That’s true. If something doesn’t directly make money, it can still exist because of taxes or another arrangement like that.