Your thoughts on renting out instruments and other gear?

Discussion in 'The Backstage' started by HawaiiSG, Jul 17, 2014.

  1. HawaiiSG

    HawaiiSG Active Member

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    I've found myself with an excess of instruments and other equipment lately and I've been playing with the idea of renting them out. I assume some of you may have done this at some point so I would love to hear what you have to say.

    I've set up a package including mics, mic stands, cables, 3.5mm adapter, and a 100W PA system. I have it priced at $65/day rental fee and a $400 refundable deposit.

    I've also set up instrument packages for students learning guitar/bass including a guitar/bass, a small practice amp, and a cable. I have it priced at $35/month rental fee with a 3 month minimum and a $105 refundable deposit. Students may also add on extras like guitar stands, sheet music stands, guitar pedals, bags, etc. for a few extra dollars a month and additional deposit.

    I'm considering whether or not to increase the deposit on the instrument packages by about $20 and allow the student to rent-to-own and keep the package at the end of 3 months by forfeiting the deposit.
     
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  2. eS.G.

    eS.G. Well-Known Member

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    Interesting idea. I know some local music shops offer rentals to students. I don't know the rates but that does seem a decent deal you are looking at.

    I mean it must be low enough that the parent sees the value, and understand they are getting better gear or at least better working or better "set up" gear than the "Econo box" at GC or Sears/Walmart/BEstbuy. (evil giant box bastards)

    No Thy Enemy HI.SG
    Epiphone Les Paul Electric Guitar Player Pack | SamAsh

    That said I do not know how many of these Big Box stores you have on the Island.....and freight to HI is always WAY up there----and NEVER free like here on the mainland......so you may have a perfect niche/captive client base.

    Do you know if the local schools work with a rental company presently?? Could be an opportunity. :dude:
     
  3. LeadFinger

    LeadFinger Well-Known Member

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    My first guitar was a rental, a Gretsch hollowbody. After 6 months the store offered to sell it for $150, and my father said, "$150, for this old piece of s---?!?" Now it's probably worth 20 times that much.

    If it had been a rent-to-own deal from the get-go I'd probably still have it. The idea that it was a rental somehow de-valued it in my father's eyes. In terms of a modern business model, I like the Play-and-Pay or whatever they call it. If the person believes they are buying something they psychologically attach more value to it perhaps.
     
  4. CATMANDUE

    CATMANDUE Well-Known Member

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    Keep in mind your precious instruments will be beat to crap by the renters. Even with normal wear and tear. I don't even lend mine out let alone rent them out. It might be better to rent out amps. Only rent the run of mill not your really good ones. That seems like the business there. I have promoter friends that rent gear all the time for certain acts they book.
     
  5. Dadou

    Dadou Well-Known Member

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    I would've loved it if my music academy had had instruments on rent when I started, in fact it's one of the first questions I asked the Director when I went to subscribe for it; the answer I got was "nonononononono, too risky, plus we can't provide instruments for everyone to rent and you never know what might happen, you leave your guitar plugged in and the pickups burn (WTF??????? I swear he really said that)...you get what I'm saying? so you gotta get your own guitar".

    The fact of investing some money in the gear, not knowing if I'd give up after a month of the infamous 1-2-3-4 exercises, was indeed one of my main concerns at the time.

    What I mean by that is that it is a good idea all in all, but I think there are a few points to consider:

    1. We're talking about your own personal instruments here, not some Squier POS 120$ pack you bought on purpose so you have to be aware that the guitar might never come back or come back into pieces or look like a beaten to hell piece of wood after a couple of renters; can you deal with that even if you have the deposit?

    2. Might sound obvious, but you should be able to fund the exact same gear with the deposit; I don't know the prices in Hawaii, but with 105$ you're not even gonna buy a starter pack here in Europe (unless you're a dealer, but then, I don't know what prices they get).

    3. If you want to get rid of some of your pieces of gear, the rent-to-own prices must be competitive with the market, otherwise people are not gonna buy your instruments, especially if they're not the first renter (i.e. a guitar perhaps well looked-after and perfectly playable but showing some wear marks).
    Quick example (applying your prices to Europe and making a rough conversion, irrealistic, but hope you get my point anyway): a starter pack (guitar, amp, cable, gig bag, 2-3 picks) here is about 150$. By proposing a rent-to-own offer, your rig is not worth after 2 months. If your gear is more expensive than the above mentioned squier starter pack, like I think, you are most likely losing money. So i think you should make a discount on the less expensive instruments for those who want to buy them after a pre-determined period and give that possibility for the most expensive ones.
     
  6. HawaiiSG

    HawaiiSG Active Member

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    The guitars I would be renting out are various low end Strats, I have six of them right now. I normally buy them for about $50, spend maybe $10 on fixing them and can usually sell them for about $100-120. I'm not attached to them and a little wear won't hurt their value much.

    $35/month at 3 month minimum plus $105 deposit is $200 so I could completely replace the equipment at retail prices if they were broken or never came back. Since I pick up stuff used, I would probably come out about $110 ahead at $200.

    My though is that for my customers even though the up front outlay of cash to rent would be the same as buying a starter pack, they can recover half the money if they or their kid quits after a few months. On the flip side, if they decide to stick with it, they already have about $95 sunk into the rental, it would only be another $105 to keep the gear instead of spending the $200 to buy from someone else.

    If they buy it from me I make about a 100% return on the sale of the equipment with about a 3 month turnover time. If not, I still make a 100% return on the rental of the equipment, a little cleanup and setup work and a $4 set of strings and I'm good to go again (If anything more is wrong I can deduct the cost from the deposit).
     
  7. dbb

    dbb Well-Known Member

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    This is my experience too. Many customers will treat the gear as if it were their own - for good and bad!
     
  8. smitty_p

    smitty_p Well-Known Member

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    Well, since this is not premium gear, you understand it will incur wear and tear, and since you're not emotionally attached to it, it does sound like an interesting idea.

    I suppose the real question is marketing yourself and getting customers.

    Not to be a wet blanket, but you'll need to anticipate costs of business and how to do your accounting and taxes. Keep in mind, your "profit" that you mention is not entirely profit. Taxes will come out of that!
     
  9. LPBR

    LPBR Active Member

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    :laugh2::laugh2::laugh2:
     
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  10. Dadou

    Dadou Well-Known Member

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    I swear he said that! Isn't it crazy what kind of BS people can throw at you?
     
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  11. Tobacco Worm

    Tobacco Worm Well-Known Member

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    I jumped the reservation!
    This is not like selling on Craig's List or from an add in the local paper. You'll need a business license, a state sales tax permit, a registered business name, insurance, and other things in order to function legally. Now if you do this out of your home's back door and the state gets wind of you doing business in such a manner you'll be a target for being shut down, fined, and possible law suits filed by the state. Running a business without the mentioned items is simply asking for trouble. From the state and from the customer. The rental/lease agreement will have to stand up under the scrutiny of a court of law if you're sued by some parent that rented something that damaged or injured his home or child. You do any of what you propose without covering all your bases by proper licensing, lease agreements filed correctly, and fully insured and your ass is literally hanging out in the breeze. They can get all you own, including your very own home as well... Still wanna rent those instruments you're finding at the garage sales now?:hmm:
     
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  12. Dadou

    Dadou Well-Known Member

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    one of the great things about this forum for a non native English speaker is that you learn great expressions everyday...:thumb:
     
  13. smitty_p

    smitty_p Well-Known Member

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    All excellent words of advice. Plus, you'll probably want to set yourself up as, at least, a limited liability corporation (LLC). This can limit some of your personal risk exposure. If you proceed as a Sole Proprietorship you are more personally exposed to risk, as in, completely exposed to risk.

    Your rental idea is not bad, per se. But, Wade is right. All it takes is some punkin-head kid to snag his finger on a guitar string for an overprotective parent to utter all sorts of threats against you for endangering little Johnny.

    Do your homework on the legal and taxation side. That's the dark side of just trying to make a little money.
     
  14. eS.G.

    eS.G. Well-Known Member

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    A guitar string.........uhm wait till one of them decides to stick a screwdriver in the pedal or amp....and get shocked.....the law suit would be in the millions.......stickers lots of sticker....a book of a disclaimer sheet about 350 pages thick covering EVERY eventuality known to man...and some imagined.............. is probably not a bad idea either.

    I hadn't thought of the potential lawsuit angle......
     
  15. HawaiiSG

    HawaiiSG Active Member

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    I already have an existing business license, excise tax number(Hawaii's equivalent of sales tax), etc. I do business as a freelance computer technician and I set up the legal business name and type of business vaguely enough to cover expansion into new fields under the same business license.

    I am organized as a sole proprietorship rather than a LLC because although an LLC does provide some protection it would not protect me against personal liability because I am the service provider. If say I had an employee who injured someone while driving the company vehicle, my personal assets could be protected from their negligence but it were me driving the vehicle it makes no difference because I could personally be held liable.

    Taxes are a fundamental part of doing business, I am satisfied paying my taxes because it means I made a profit, if I owed no taxes that would mean I made no profit. Potential liability is also a fundamental part of doing business. You can take steps to minimize your exposure and protect your assets with insurance but part of risk assessment is risk acceptance.
     
    eS.G. likes this.
  16. eS.G.

    eS.G. Well-Known Member

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    You Sir are well prepared Did your homeworks, covered all bases, and get a gold star for the day.

    Now go out and rock the SHI* outta the instrument rental market......and lets not forget influence a whole NEW generation of future ROCKERS!!!!!

    Oh hey......and when you need employees, I can be had .....CHEAP........just sayin ;)
     
  17. HawaiiSG

    HawaiiSG Active Member

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    One marketing idea I've had is contacting music teachers to buy introductory lesson vouchers at a steep discount. I would pay the teacher $5 per voucher up front which could be redeemed for a 1 hour lesson. There would be a limit of one voucher redemption per client to prevent anyone from abusing the discount on the vouchers. For minimal expense I could increase the perceived value of the rental and the instructor would have active exposure to new clients.
     
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  18. eS.G.

    eS.G. Well-Known Member

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    Seriously your a genius...I work cheap....I don't make much noise and I can be useful in a fire fight.....send me a ticket to HI and we are good to go.........

    O.K. reality check. Dude awesome idea, now where will you get the next ..oh..-20 guitars you will need because this is gonna take off.....fast....
     

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