One theory about — and argument against — electronic equipment rental marketplaces is that they will only facilitate nastier price wars that make life tough enough for reps in face-to-face or phone-to-phone dealings.
It is true that one of the Internet's major attractions for contractors will be the ability to “shop around” quickly for the best rate on a particular item, but a recent analysis of online consumer shopping habits offers a different take on the subject of pricing that also might be applied to e-rental habits.
“In the off-line world, tests of price elasticity are often expensive and time-consuming,” says McKinsey Quarterly, an e-commerce industry newsletter. “By contrast, the Internet provides for continuous, real-time price testing that produces instant customer responses. If an e-business wants to know the sales impact of a 3 percent price increase, it can conduct a test by trying this out on every 50th visitor to its site.”
In another words, by allowing rental companies to study the renting patterns of their customers, the Internet can allow them to tailor rates based on each individual customer — a good off-line practice, no doubt. Online technology, however, can offer a great leap in precision and flexibility.
“A company can extrapolate the future buying behavior of customers from their past behavior,” the McKinsey newsletter says. “Whichever technique a company may choose, the Internet maximizes its chances of making a sale at the highest possible price.”
e-Fact
Twenty-four percent (24%) of rental companies now accept equipment reservations online.
source: RER survey, Dec. 2000
— Launched in March, this site gives do-it-yourselfers the ability to design and plan home improvement projects for free. The site also help users create detailed project supply lists, including tools they may need to buy or rent.
Quick HITS
www.usedaerials4sale.com — This site offers hundreds of used aerial lifts for sale. Each unit is backed by a third-party inspection of five criteria: structural condition, functionality, appearance, paint and tires. Sellers can also use the site to list items.
www.constructmyfuture.com — Developed by the Construction Industry Manufacturers Association and the Associated Equipment Distributors Foundation, this site provides information about career opportunities in the construction industry.
