Prime Equipment's Rental Outposts could be the wave of the future. Tom Tysl is leading the troops.
Tom Tysl, Prime Equipment's regional manager for central Florida and a 23-year company employee, received Atlas Copco's Peter Wallenberg Marketing and Sales Award this year for his foresighted method on how to serve small short-term rental customers. Tysl developed a partnership with Winter Haven, Fla.-based Scotty's, a regional hardware and lumber chain of 150 stores in Alabama, Florida and Georgia, and Prime Equipment Rental Outposts were integrated into stores in Plant City and Leesburg, Fla. Construction is under way for Rental Outposts at two more Florida Scotty's in Clermont and Cocoa.
RER: How did you develop the partnership?
TT: We approached them with a suggestion to incorporate our store with theirs. They knew us because we had a rental center in Winter Haven, where Scotty's is based. But they chose [now defunct] Rental 1. Rental 1 set up in two or three of their stores, but Scotty's wanted to work with a company that was willing to grow with them, and Rental 1 couldn't do that. They came back to us a year later, and in 1999 we opened our first store in Plant City.
How is a Rental Outpost different from a regular Prime Equipment rental center?
A Rental Outpost is set up in about 4,000 square feet under roof plus additional yard space of their store, and it is staffed by trained Prime Equipment people. It is not a full-service rental store. We change oil, sharpen blades and change spark plugs, but we don't do major repairs. We do have access to all the same equipment as a full-service store.
Why develop a Rental Outpost?
We don't put Rental Outposts in areas where there is an existing Prime rental center. The focus of the Rental Outposts has been in rural areas, where the customer base can't support a full store. It is a major endeavor to start a new store, and if you partner with an existing store, it is much easier. You already have the space and a customer base.
What type of customers are you trying to attract?
Contractors are still the primary customers, and the idea in establishing a Rental Outpost is to have a local source for short-term rental and emergency rental. If a contractor has a big job he's working on like a school or an office building in the area of a Rental Outpost, all of his products would have to come from 40 or 50 miles away. We service that guy. I can have equipment to him in a few minutes. Still, a large majority of the customers who come into a Scotty's don't think rental. The customer base is different because the people who come into a lumber store are the do-it-yourselfers looking for a 2-by-4. Those customers have a "buy" mentality, and the challenge is to educate them on the advantages of rental. When we tell them about the advantages of rental, it's a revelation to some of them. The homeowner, DIY customer is a definite target.
Isn't there a conflict with Scotty's because it sells tools and power equipment?
No. We don't sell the consumer-quality units that they do. Rental stores can't rent a consumer-quality unit because it won't hold up to the rigors of the rental industry, so we stock only heavy-duty industrial equipment, and that's what we sell. We also offer "rent-to-own" purchase plans that Scotty's doesn't offer.
Are Rental Outposts the wave of the future?
I wouldn't say they're the wave of the future, but these alliances are important, I believe, because they fill a market need. NationsRent has partnered with Lowe's in a similar project, and Home Depot is doing it internally within their own stores.
What are Prime Equipment's plans for its Rental Outposts?
The projected growth will be driven by specific market demands, and Prime will grow in the steady, controlled manner we always have. The Rental Outposts will contribute where it makes sense for the area, while other markets will demand full-service Prime locations.