Material equipment rental business and its benefits in INDIA

There is a steady increase in the price of material handling equipment in India these days. Apparently the hefty cost of maintaining them has left warehouse owners think twice before investing on one. Unlike those days in the back where a huge sum was blocked in investing on material handling equipment, things have changed over the years, where business owners are opting for material rental business.

Material equipment rental business in INDIA – the harsh reality

Rental business is not so widespread in India. The idea of equipment rental is slowly picking up in India. With over the $ 2.3 billion equipment sold in India, only 7% is sold to rental companies. The number seem to be increased in the global scenario with an average of 50%. The number is little more in China with 35%, a little further in USA with 65% and with 80% in Japan, it is 80 per cent. Ideally, the equipment rental industry in India is fragmented today.

But India is waking up to the situation of beating high machine costs with an alternative. Instead of the only choice to buying the equipment, the customers are left with the choice to hire their heavy duty machinery along with their spare parts for best process, right from the comfort of their home. Thanks to the internet, which has been playing a major role in amplifying the trend of equipment rental in India.

The actual scenario of equipment rental

Warehouse equipment being the most crucial in any business, the rental list is actually big. The following reasons are primarily why the business is growing huge in India now.

Reasons for the rise in rental business in INDIA

  • The increased cost of purchasing equipment
  • Rise in economic uncertainty
  • Lack of capital
  • Technology up-gradation
  • Unpredictability
  • Infrastructure growth
  • Depreciation woes
  • Costly breakdowns
  • Space constraints

Benefits of rental business in INDIA

The need of the equipment comes without any capital intervention. This assists in avoiding the initial investment. When it comes to purchasing new equipment, it always calls for a huge investments as most of the equipment are expensive. This might hugely affect the business budget too! More so, purchasing warehouse equipment is a long-term investment. Therefore renting out one can prevent the upfront costs related to buying one, which can help better allocation of financial resources.

The rental business ultimately protects you from the unpredictable market fluctuations. The warehouse scenario being the highly dynamic one with many influential things, the rise and down of the equipment can highly impact your business. During such scenarios, renting out equipment can help by and large. It can be a backup to your company during such financial downturns that might crop up during such unforeseen situations. Warehouse rental business is a flexible option which can help you easily handle the ups and downs of the market forces.

The fleet and stocking of spares gets reduced by half

The rental expenditure is treated as 100% revenue expenditure, which is adjusted by the Income tax department during taxation

The contractors who opt for rental is always in profit without the need to invest in purchasing a new material handling equipment.

Gives room for comparatively less maintenance and repair cost, helping you to keep your business up and running without any delays. Whereas, these two accounts in when you actually own in an your own equipment. Though maintenance and repair are factors that is associated with rental too, yet they are relatively low priced when compared to the ones purchased. The reality, by choosing to rent, you become less worried about expensive breakdowns, which is taken care by the rental company. This way, you get to save time, cost and labour.

Run short of depreciation costs. Purchasing a material handling equipment tends to depreciate. Using the equipment over the years is sure to depreciate, which when planning to sell makes it difficult to incur the initial purchase cost. Also with advancement in technology there are chances for your material handling equipment to become obsolete. Therefore it is always better to rent.

Renting can help curbing the transportation costs too! This is applicable especially when your site is farther away from your current location, in which case the equipment should be transported from one place to another. Situation like this demands for a lot of hurdles including time consuming logistical delays.

There is a steady increase in the price of material handling equipment in India these days. Apparently the hefty cost of maintaining them has left warehouse owners think twice before investing on one. Unlike those days in the back where a huge sum was blocked in investing on material handling equipment, things have changed over the years, where business owners are opting for material rental business.