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TRASH OR CASH?

TRASH OR CASH?

WHEN an item takes up space but doesn't make a profit, what do you do? This simple question draws a range of responses from party rental pros — from selling it in cyberspace to depositing it in the dumpster.

A good, old-fashioned parking lot sale has been the method of choice for Los Angeles-based Classic Party Rentals at its El Segundo, Calif., location — formerly known as Regal Rents — for more than 20 years.

Classic's “tent sale” — so named because the company erects a tent on its parking lot specially for the one-day event — takes place every April. “That's because April used to be a slower time for us, between the Academy Awards in March and when business picked up in May and June,” explains Classic executive vice president Michael Stern.

Classic publicizes the event with an inexpensive flyer mailed to nearly 10,000 clients. The event draws some 400 to 500 customers every year, who line up to shop from 9 a.m. to 4 p.m. to find bargains from Classic's warehouse. Sale items are marked with prices, although customers can try to talk them down.

Stern keeps the merchandise moving by awarding a prize to the staffer who writes the most orders. “I don't want {staff} standing there like a bump on a pickle; they need to hustle to do business,” he explains. Even salespeople who usually have Saturdays off must work at least half the day. But Stern makes the sale into a party by bringing lunch in for his employees. The incentives do the trick — last year, Classic pulled in $50,000 from the sale. “You can't beat it,” Stern says.

CYBER SELLING

At the other end of the spectrum, some party rental operators are venturing online to sell inventory, including trying EBay, the 10-year-old online auction that boasts 168 million registered users. But the reaction so far is cautious.

Larry Ott, sales manager with Newtown Party Rental of Newtown, Pa., had saved money and time buying commercial printing parts on EBay for a Web design firm he owns. But his first foray selling party rental items on EBay was not a success, he says.

Although online communication is fast, it may not always be clear. “I found that my descriptions were not helping me at all,” Ott relates. “We were selling a tent that was worn and had passed its useable life with our company, but could certainly be used in other capacities. But the inquiries we were getting during the auction were all about camping tents. I did not want to misrepresent the quality of the item and have it come back to haunt me, but at the same time I did not want to scare away a prospective buyer.”

Ott revamped his online pitch. “We resubmitted the tent with better pictures, a good, honest description and — what's more important — a listing of possible applications. A contractor looking to cover himself while pouring concrete during a cold time of year won the bid and took delivery. We received the price we wanted, and the convenience was great.”

Newtown Party Rental also uses its own Web site to move outdated inventory, making sure to include that all-important “call to action” for potential buyers. “Wherever we have a piece of equipment listed on the site, we have a splash next to it with ‘Buy This Item’ or ‘Buy Instead of Rent,’ which leads the customer to our ‘Equipment for Sale’ page,” Ott notes.

EBAY INSIDER

For those considering jumping on EBay, Ben Shipper IV notes that it's important to bear in mind that selling online requires different strategies than buying online.

“I think there are nuances to each side of the transaction,” says the president and chief operating officer of McCook, Ill.-based Chicago Party Rental. “In selling, you deal with shipping costs, inexperienced buyers and unreasonable expectations. Buying is different — you have the burden to make sure you are buying from a reputable ‘EBayer’ who has a good rating, and making sure you are really buying what you think you are.”

He also urges keeping a cool head during heated bidding. “Set the price you are willing to bid up to, then stop, period, done,” he says. “It cannot be an emotional process; it is just buying something. That is the biggest trap that a lot of people fall into, and {they} regret it later!”

Although he does business online, Ott points to the value of traditional business networking to move outdated inventory.

“I have found that speaking with our manufacturer's rep is a great way to unload some inventory,” he explains. “These individuals are usually speaking with customers in the market for that product and usually can help place some used equipment if they have a customer looking for something inexpensive or who may not have the capital to purchase something new. Our reps do this to help their customers achieve their goal — even if it does not produce a sale for them — to help strengthen the relationships. I prefer this way because we know that the item will be represented appropriately and we have the confidence that it is the right equipment for that application.”

IT'S BAAACKKK …

Although selling outdated inventory can bring in money, some rental operators fear it will cost them in the end, when a sneaky client tries to return the used goods in place of the new items he just rented.

To protect himself, Damon Holditch, CSEP, head of Austin, Texas-based Austin RentAll Party, tries to sell to clients outside his usual service area. Also, “Have {potential buyers} come and look at the equipment before they purchase it,” he cautions. He notes that some party rental companies in his area sell to customers across the border, but warns, “get your money before the equipment leaves.”

But even giving inventory away means it could wind up back in his warehouse, so “most of our party rental equipment is not resaleable,” he says. “We use it up and discard it.”

Veteran party rental executive Tom Gifford, head of Sonoma, Calif.-based ThomasG, agrees.

“Samples and discontinued lines we give to employees and clients,” he says. “Worn or damaged goods in lines we still rent or that are quite similar to equipment we rent, we give to a school, church or similar group that will never be a customer of ours. Or we simply throw it away. The majority of my stuff goes into a trash can. I get flack from people who say it is a great waste, but if I sell in my community, a percentage of the equipment will end up back on my shelf, having been switched out by clients.”

Steve Kohn, president of Miller's Rentals & Sales in Edison, N.J., says it pays to be flexible.

“Remember, everything is for sale,” he says. “Never say no if a client wants to buy any piece of equipment. Whether it's new or old, everything has a price. Turning inventory quickly is a great way to keep your inventory new and current. If a client calls and asks, ‘Do you sell used tents?’ or ‘Do you sell chairs and tables?’ teach your sales staff to handle these calls. Just because the term ‘rental’ is in your name doesn't mean you can't sell.”




RESOURCES

Austin RentAll Party, 512/491-7368; Chicago Party Rental, 708/485-8010; Classic Party Rentals, 310/535-3660; Miller's Rentals & Sales, 732/ 985-3050; Newtown Party Rental, 215/860-0819; ThomasG, 707/933-0909

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