Survival on the Warehouse Front

By Joel Rollins, CTS-R

Often, running an AV Rental and Staging company is a bit of a high-wire act. We have to prepare to offer the latest in services and equipment to our clients – while not plunging too deeply into costly investment avenues that don’t always pay off. We all know that the big cost factor, and thus the most important single figure to control, is payroll. But often we concentrate in other areas. Why?

We love gear.

We’re crazy about STUFF. We read about it, talk about it, and covet it. We buy it on hunches. An oft-heard phrase is “If you build it, they will come.” We probably wouldn’t be in the business (at least, most of us) unless we were pretty fond of the technology we employ.
So we love gear. So, in controlling our inventory numbers, our biggest challenge (next to maintenance and loss prevention) is how to restrain our buying. I’m as guilty as my techs at rationalizing why we MUST have that new device – that life as we know it cannot continue if we don’t have one.

And yet, maximizing return from our inventory investments is something we must do to be successful. Some of the “truths” about maximizing our inventory investments are, indeed, self-evident, but so important they bear repeating:

1.    Intelligent purchasing of inventory for a rental company means that the more multi-purpose a piece of gear is, the more valuable it is. Pay attention to alternative uses for any piece of gear you purchase, and make sure you buy things that can be used (and thus rented) in a variety of ways.

2.    “Right-sizing” the inventory is critical. Pay attention to the APPROPRIATE number – of anything – to have in inventory. We want to keep the inventory rented as often as possible, without placing ourselves in shortage situations that lead to increased cross-rental costs, emergency purchasing, and ultimately client dissatisfaction.

See related  Search for the King

The third principle, and often the most difficult one to accommodate, is “Don’t try to build the church for Easter Sunday.” So, when you purchase a particular type of gear, pay attention to other sources to obtain the same gear on a temporary basis. Also, there are types of gear we use infrequently enough that they don’t justify a purchase – but we may need them anyway. The three sources to watch:

1.    Alliances: I like to work with my “friendly competition” to make sure we buy similar types and quantities – allowing me to borrow or trade out use of additional units when necessary.

2.    Manufacturers: When I purchase gear, especially high-end gear, I like to negotiate loaner or rental unit provisions with the manufacturers – allowing me to conveniently source the number of units I need when dealing with temporary high-volume situations.

3.    Cross-rental firms: Over the last 10 years or so, a number of extremely high-quality firms have opened up to specialize in cross-rental of gear to AV rental companies. Many of them come from an AV-rental background, meaning that they pack and accessorize gear properly, making it easy to employ (unlike manufacturers loaner gear, which often comes in cardboard straight from their warehouse). These firms base their rates (and their services) on being accommodating to rental companies. I often involve the one I work most closely with in my inventory planning each year, ensuring that they’re planning around my needs as well as my competitors’.

Anyway, while most of this is pure logic, as I said I think it bears repeating. Over the next few months, we’ll be looking at more ways to maximize our investments, and if there are any you think we’re missing, or would particularly like to discuss,our community is here and we’d love to hear from you.

–JRR