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What is the business model and funding sources of furniture rental companies in the USA?
Hello! Thanks for your question about furniture rental companies in the USA. The most useful sources I found to answer your question are the furniture rental company websites, Gaebler and Pitchbook. The short version is that some of the important points to consider while starting a furniture rental company are the terms of lease, key selling points, financing options to customer, franchising and online showroom. Below you will find a deep dive of my findings.
DEEP-DIVE
Furniture rental is attractive for customers who want to furnish their homes, etc. without long-term commitment or relying on credit to purchase furniture. Lease payments are the primary revenue source for furniture rental companies. Here are a few points to consider while creating a business model for a furniture rental company.
*Terms of Lease
The terms of lease may vary, but commonly a two-year lease costs more than double the retail cost of the furniture. This is done as there is no guarantee that the cost of merchandise can be recovered. Lease fees add up when the time value of money and delivery charges are added to the cost of the furniture.
*Key selling points -
With so many options available to the customer, it is essential that the business provides some key selling points. Besides providing low prices, the business can emphasize flexibility, multiple payment options or ease of access as its key selling point.
*Other revenue options -
Besides leasing, many companies also provide rent-to-own options or financing options for customers with no credit or bad credit. Although the company incurs extra risk of no credit check, the company can charge higher rates to compensate for it.
*Franchising -
It might be beneficial to consider franchising as this increases the odds of the business succeeding due to its proven business model and the brand image of the parent company.
*Online Showrooms-
Another method to attract customers is to build an interactive website that showcases all the furniture options available to the customer. A rent calculator can also be provided to help estimate the cost of renting a particular piece of furniture. The website can also have sections to accept online bookings and payments.
Below I have attached a spreadsheet that includes information regarding Churchill Furniture Rental, McGuaire Furniture Rentals, Cort Furniture Rental and American Furniture Rentals. The information includes:
1. Company Name
2.Company Website
3.Business Model
4.Funding Sources
OTHER NOTES
For an in-depth information regarding the business models of each business, the FAQ sections of the company websites are very helpful and informative.
CONCLUSION
To wrap it up, some of the important points to consider while starting a furniture rental company are the terms of lease, key selling points, financing options to customer, franchising and online showroom. Thanks for using Wonder! Please let us know if we can help with anything else!