The old saw says “Why rent when you can buy?” and I’ve got three darned good reasons. Renting is better than buying when—
- You’ll use It only once
- When It loses Its value quickly
- When you want to try It before you buy It
In the brick-and-mortar world, we rent power tools and moving trucks and library books and all kinds of durable reusables. Old news. No surprises there.
But the tried-and-true rentals model is spreading to new and unexpected corners online, and it’s earned its own page in my Online Business Playbook. Netflix started it and—based on the newer players—there’s no guessing where (or if) it will end. Check these out…
Paperback Book Rentals
Okay, maybe we should have seen this one coming? Parallel to the Netflix no-late-fees-ever-just-drop-em-in-the-mail system, BooksFree rents paperbacks on a circulating basis to subscribers who pay a monthly fee. The fees vary depending on how many books are held at one time—from 2 to 15(!) books, from $14 to $50.
Sure, Joe Subscriber could go to his local library and borrow books for free. But the “going to the library” part is a step that many (including me) are happy to avoid. BooksFree rentals ship with a pre-addressed, pre-postaged pouch to mail them back. No stamps required, no due dates, no driving, no overdue fees. Happy Joe!
Some things to note about BooksFree’s setup—
- Books ship USPS Media Mail, which is both cheap and fast.
- Joe can cycle through new-to-him books many times a month, depending on his reading speed and delivery times
- If Joe really really likes a book, he can pay for it and keep it (most of the time…tough-to-find titles can’t be kept)
- Joe can donate his own paperbacks for store credit towards “keepers”
- BooksFree also sells books
Between membership fees and shipping and keepers and donations and sales, I’m having a helluva time tracking the money on this one. In general, when I think back on how many books I read as a subscriber, I feel sure they lost money on me every month.
Once—and only once—I held a pair of books for 3 months. So that time those two books cost me…what? $30 or something? Before that, I was round-tripping paperbacks 2 to 4 times each month. On those months my subscription fee didn’t even cover the shipping.
And then I dropped the subscription because I wasn’t reading much. Which is entirely unlike our Netflix subscription, which goes unused for months as DVDs sit unwatched next to our TV…yet we can’t bring ourselves to cancel.
Something to think about.
And while you’re thinking on that, think on this—
Fashion Accessory Rentals
Now called Avelle, Bag Borrow or Steal (BBS) rents the kind of stylish stuff that loses value over time. I don’t mean like a car, which depreciates over years. I mean handbags, sunglasses, jewelry and watches that lose their value over a few months.
Best that I can tell, we don’t have to be members of BBS to rent these things. Being a member means discounts and advance notice, though, which might be worth $5 to $10 each month for the true fashionista. Either way, 100% guaranteed authentic glam can be rented by the week, month, or quarter…or as BBS puts it: for an event, a month, or a season.
Are you feelin’ it? Yes? No?
Okay, go peek at this:
Hermes Vintage Crocodile Birkin Handbag
Yup, that one costs $4,800 per month. To rent.
TO RENT.
But there’s always the Whiting & Davis Cheveron Envelope Clutch for a teensy $20 per month. Or, between those two prices, there are 2000+ other purses to choose from.
Something else to think about.
With that in mind, here’s another one…closely related, but super-super-focused:
High-End Watch Rentals
Steal the Time does a similar thing, but they only rent expensive watches.*
Just watches.
Like this Hublot Chrono Depose can be rented for $308 per week. Or for $905 per month. Or purchased outright for $9,495. Which isn’t bad, considering the MSRP is $14,200.
‘Nuf said.
Actually, one last bit…
Among the nifty things about these rentals is they keep us from accumulating short-lived stuff. We rent It, use It, enjoy It, and then return It for someone else to do the same. It’s quite smart, really…
…and I suspect there’s decent money in it, too.
There’s a lot of math to making sure it’s profitable, though. Lots to consider: buying new stock and anticipating demand and managing inventory and shipping (both ways) and pricing the membership fees and selling used stock for the right price at the right time.
But it’s doable. Folks are doing it.
And some of them have been doing it for quite a long time—Netflix has been around since 1997. Booksfree since 2000. Bag, Borrow or Steal has been in business since 2006. It appears Steal the Time is the baby of the bunch, as their domain registration is only a year old.
Durable reusables. For rent. Online.
Something to think about.
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* Curtsy to @sheamus for releasing this into the Twitterverse…
Curious thought: when we pay for consulting, are we renting that consultant for an hour (or a day, or a week, or whatever)?
Further: is it helpful or useful to think about, say, web server space as a rental, in much the same way as we might rent an apartment? (Which reminds me, I have a check to write this week.)
HA! Okay, that’s a fun thought
Are consultant hours durable? Maybe.
Reusable? Nope…once they’re gone, they’re gone.
Is web server space durable? Kinnnnda…?
Reusable? Definitely.
Is an apartment durable? We certainly hope so, but not always.
Reusable? We certainly hope so, but not always!
Hmmm. This “durable reusable” test is tougher to pass than I originally expected…
Ok, that might just be one of the craziest things I have read online recently. You can rent a Cartier watch? I can’t imagine the type of insurance and personal info they would need to take from you in order to do that safely. I would not be surprised if part of the contract had you give them the rights to your first-born child if you break or lose the watch. It is a great business concept! I bet they are making money hand over fist and doing even better in this economy than when things are good. In an expansion everyone can buy the watch, now in the recession people still want to “front” but now they are forced to rent.
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Renting is a great idea. Love the watches from Steal The Time and the handbags from Bag, Borrow or Steal!!
I would hardly call a consultant a rental (especially when comparing it to a web server). I look at consultation as an investment because consultants are there to help you learn, whereas as webserver is just there to hold information that you already have.
If that makes any sense.
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This is a very interesting post. I think this is where the market is heading in the American marketplace. We are a dispensable society and things get old quick. Just like buying cars. Do we really need to buy cars every 2.4 years? Of course not. That’s why this business model will probably be successful in the new marketplace. It’s exactly what the marketplace wants.
This applies for our SEO business too. We find it better to hire and outsource some work then “buy” or employ people to work. Hiring is indeed better then buying in some cases.
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I don’t think i’d ever rent a watch (or says my coworker a purse) for that much. the books however seem like a nice deal. I think it’s just the thought of renting a high end item like that seems more frivolous to me than books or dvds
What a great idea. It would be great for parties, weddings, etc. Handbags for the ladies and watches for the men!! We’ll have to try it.
I am an avid reader, i love reading books but all those books once read never get touched again, I am glad that now i can rent the book and even give away my books for rent.i think its very interesting and economical thing to do as now i dont have pay fortune for my hobby moreover i will getting extra space to keep my stuff after i have packed them off to this rental company.I like it! Thanks for sharing such valuable information.
Great article. Rent-a-girlfriend next? Oh wait, that already exists
Cheers.
With the slow economy right now renting is a great alternative to buying. I know there are several services/products that last year I would have bought without a second thought. Now that money is tight I have been trying to find venues where I can rent them instead.
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Yes, rent is better than buying. This is great idea for starting online business. Thanks for sharing
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Wow – this post really got me thinking…
All those ‘worn once’ items in my closet – if Ida… rented that handbag instead of buying additional storage essentials to house all that stuff or like my friend who can’t let go of anything and rents a storage space, because she ‘might need it one day’… this can really stop you in your tracks and rethink – “will I want to own this after I’ve used it once?”
Couldn’t do the book rental because I’m a book junkie and either keep them or pass them on to friends or recycle them back to the ‘friends of the public library.’ But for avid readers – cool – very cool.
I agree with Aaron – “I think this is where the market is heading in the American marketplace.”
Renting the watch appeals to me – so that’s about $44/day – to have the absolute pleasure of that kind of treat – like renting a limo for an evening!
Aaaah… to live like royalty just for a day! I love it.
Never even heard of BooksFree! Great idea! Like you, I am not a fan of getting to the library. Definitely a useful service. Glad to stumble onto your site today!
Yea, I am not a huge fan of renting, but sometimes it is the best best. Guess you have to determine all the variables first.
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Well, sometimes is good to rent, but me personally, prefer to buy and own my stuff.
I don’t believe in renting to pretend to be something i’m not.
I am who i am, and use what i can afford to buy, no more, no less.
Regards…
Really interesting article..You have to understand that I was born, raised, and somewhat still practice the Dale Carnegie/Dave Ramsey way of doing things..Always buy when you can/never rent etc..This is all kind of hard to get my head around, but I definitely do understand what you are saying regarding the benefits of renting. Great Blog!
I often want to have something I like. If I like a book I also buy it. I want to have it also if I don’t read it a second time.
Interesting idea, and I bet there are plenty of people at the moment who wish they were renting their homes rather than seeing the value of their homes depreciate and negative equity creeping up on them. Another major upside to renting is the increased flexibility it gives you. Anyone who has tried to sell a house in this stagnant market will know what I’m talking about!
All of these ideas are good. However, for any of them to change consumer patterns in a big way, they would have to be implemented with profitable and scalable business model.
Most home improvement stores (Lowe’s, Home Depot) do rent tools. All sorts of power tools, step ladders, scaffolding, machinery, and trucks to haul it in. Pretty decent prices, too.
I never heard about renting a watch? or fashion accessories? thats funny
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Renting in most cases is less worrisome and can end up being alot cheaper. I live in a fairly warm climate and there are alot of boating enthusiasts around here. Well a boat costs as much as a freaking car! These people are crazy! Paying $30000+ for a vehicle that you can only use a few montsh out of the year…when you fill it up you burn it all ina weekend easily. I figured you could easily rent a boat everyweekend everysummer and still come out ahead after many many years. Think about that!
The same is true of a house. Renting a house before you buy a house (even if you don’t buy what you’re renting) will teach you what you want (like a garage) and what you don’t want (like paneling).
Other benefits to renting come with high dollar equipment like bulldozers. If I were CEO of a business and we occasionally used a bulldozer or backhoe or something I’d rent because then you don’t have to worry about repairing and maintenance. Or storage! So renting, in some situations, can be wise.
Buying sometimes get really expensive and like you said, renting is the best alternative of it.
But when it come to cars, what would be the best thing to do? Rent or buy them?
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Hmm…interesting concept. Netflix started small, but I’m not sure if this book thing will take off.
I definitely think the idea of renting high priced fashion accessories is a great idea…but the durability of the product is a question.
The best part of the whole idea is that the books will delivered at your door steps so you have to go hunting for it.Just switch on your PC and select your book and order it.I think my wife is also gonna love this as she is obsessive about bags, i think she will not only encourage me to opt for this service she herself will also become a member.I am feeling blessed as now i can save a fortune which got spend on the accessories of my wife
Awww I could be rich for just a matter of hours! What a concept!!
Look how far we’ve come. Now we can rent contentment, happiness and self esteem. Too bad we can’t rent wisdom, morals, character and intelligence!
It really depends on what you’re buying or renting although I’ve completely embraced NetFlix, GameFly, iTunes movie rentals, etc. Any type of media that I only need for a short amount of time I always prefer to rent – Well at least until I can get a big enough hard drive to store all of the BluRay’s and PS3 games I own already and want to buy in the future. Then I’ll probably end up torrenting them anyway. I guess the only reason these companies are making any money off some tech savvy people is because right now it’s just easier to rent it (for now…)
Renting fashion acessory? not a good idea,i will prefer to buy,and own them.But for books, its okay.Because you dont have to worry storage.
It may sound cheap but I go to a few garage sales in my neighborhood every once in a while and can usually find a dozen or so books that I’d like to read for around a quarter a piece. In fact, I now have an entire bookcase filled with books waiting to be read. I even look for books that my family and friends would want to read. But, for other larger items I suppose renting would be a better alternative.
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i think this is where america is headed. Everything on a temporary basis.
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