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Rent or Buy?  5 Reasons Why Companies Often Choose Rentals

In today’s competitive landscape, most organizations are constantly looking for areas of the business where they can reduce costs without affecting productivity. Watching expenses carefully can be a delicate dance, particularly when the market is competitive or very cyclical in nature.

Equipment rental is not often thought of as an option and seen as a cost adder rather than a money-saving strategy.  There is some truth to that notion, but it really depends on how often the equipment is being used and how much it costs to rent vs. buy.

There are many situations in which a company may prefer to rent warehouse automation technology:

  • Money savings over time
  • Satisfies the need for short-term manufacturing or inventory requirements
  • Accommodates a temporary boost in production
  • Available when other devices are being maintained or repaired
  • Allows for greater flexibility with fluctuating demand

With respect to bar code scanning equipment or even industrial mobile devices like a handheld computer or rugged tablet, these devices are often good candidates for rental. In many industries that have seasonal highs and lows renting equipment is a smart strategy.  In manufacturing, for instance, organizations frequently hire temporary workers to conduct inventory, cover shifts during the summer and in peak times of the year such as the holiday season.  For these occasions, renting equipment makes sense.  A rule of thumb is to measure the amount of time these warehouse devices are going to be used – if it’s more than 60 or 70 percent of the time, then you’re probably better off buying.  But if it’s only 25-30 percent of the time, then renting can be a more cost-effective option.

The best strategy is to conduct a cost-benefit analysis for your business and include these cost estimates as appropriate:

  • Cost to rent per device, per period
  • Cost to purchase the same devices
  • Storage expenses, if any
  • How often the devices are used
  • Projected life of the devices
  • Applicable maintenance and repair costs
  • Additional uses for the devices outside of the primary use
  • Financing options, available capital

In general, if you’re thinking more in terms of how many years you’d need the equipment vs. how many days or months, then you’re probably better off purchasing. The exception to that rule would be if you’re planning a project that will only last 12 or 24 months, and then the equipment will no longer be needed.  In that case, the numbers might tell you to rent.

Not sure where to start with a cost analysis or need more details on data collection device rental?  Contact us today for more info.



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