Why Rent Is the New Buy
The internet-based sharing economy has allowed consumers to rent products from different types of businesses and peers. At the same time, it has allowed asset-owners to make money sharing their stuff. We might see these rental marketplaces as something very simple: simply go to a site, order your product on rent, and pay monthly rentals for it.
However, the rental market is not as simple as it seems to the end-users. A much complex organization of different business models differentiates every rental marketplace from its peers. Take Airbnb for example.
Airbnb allows homeowners to rent their homes to Airbnb users. It is a peer-to-peer rental marketplace model (P2P), where the platform does not own the assets it is renting to the consumers. Unlike the traditional rental model, where marketplace owners hold the assets they rent out, the P2P model allows the users itself to rent out to the other users. The marketplace makes money from fees and commission from the users.
What makes rental business this special now?
To be honest, the renting economy has been in the market for a long time. However, due to the high renting cost per asset, it was limited to expensive and infrequently used goods alone, such as vacation homes, luxury cars, etc. With the introduction of economical channels (like ready-made rental marketplace script and improvement in the existing business infrastructure (like subscription-based recurring payment solutions and SaaS), we now see rentals ruling every sphere of the market.
Today, not just consumers are renting almost everything but also the change in the consumer-behavior has encouraged entrepreneurs to come up with different rental business models. We can see the impact of economical business solutions and drop in overall renting cost per asset in every market. Besides traditional rental marketplaces like Airbnb, whether it is Uber, eBay, Amazon, Upwork, or TaskRabbit, every big business that we see today is renting out something in one of the other forms.
- Uber, Ola, and Lyft are renting their platforms to the car owners and letting them find people who would rent their cars to commute around for a fixed time.
- Shopify and Big Commerce are renting their hosted and managed eCommerce solutions to the entrepreneurs and giving them ready-made eCommerce sites.
- Amazon and eBay are renting their platforms to businesses and users to start their web-stores and sell products to the consumers online.
- Upwork and TaskRabbit are renting their platforms to freelancers and service-providers to find consumers who would rent their services.
Check out this infographic to know more interesting facts about current rental business models. We have looked at why renting is the new buying, and how much businesses are making after tapping on this new trend.