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June 10, 2002 02:00 AM

Moving-truck rentals can be a real money-maker, if you put in the time

Kathy McCarron
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    AKRON (June 10, 2002)- With time as the only investment, renting moving trucks as a side business is a straightforward way to earn extra cash, according to two tire dealers who have been profiting from such ventures for several years.

    Moving truck rental operations, often found at self-storage lots, are a natural second business for tire dealerships because of their retail experience, according to three major rental companies—U-Haul International Inc., Budget Group Inc./Ryder TRS and Penske Corp.

    A rental operation not only offers commissions to tire dealers, it also can generate new customers for their core tire/auto repair businesses. In the case of “one-way” truck rentals in which people are moving into the area, the dealer “has a first shot at those people for your main business,” said Budget's vice president of local markets, Pete Martinelli.

    Various factors are involved, but the general requirements to become a truck rental agent or dealer is a desirable location in a target market with enough property to park at least a few trucks. No capital investment is required and the companies provide the trucks and major maintenance. The companies also provide Yellow Pages advertising and location finders through their Web sites as “that's where 95 percent of the business comes from,” said Dave Baptisti, manager of Penske's national rental programs.

    The truck companies pay a commission—averaging about 20 percent—on each truck rental transaction on a weekly or monthly basis. They also offer training support and guidelines for servicing the customers-—which includes keeping dealer locations open on weekends, the most popular days for people to rent trucks.

    Generally, it is up to the individual dealers/agents as to how large of an operation they want to run. For example, one tire dealer in New York has increased his truck rental business to include 35 trucks to bolster profits while another dealer in Texas gets by with two rental trucks that provide some extra cash at the end of the month.

    Joseph Matrone of Tallman Tire & Auto Repair in Tallman, N.Y., became a Budget/Ryder truck rental agent after he moved his tire dealership to a former Sunoco gas station/Ryder truck rental site in 1994. At the time, the new location had two service bays and two Ryder trucks.

    Today the dealership has an additional building and 35 trucks. The profits from the Budget operation have grown as well—with gross sales jumping from about $35,000 initially to $500,000 last year, from which the dealership receives a percentage commission.

    “I treat it personally as extra money,” said Mr. Matrone. “It's nice to get that check every month. It's supplemental income.”

    The Firestone-affiliated dealership also operates an additional business as a Budget truck maintenance provider. The truck rental operations account for 15 percent of the dealership's profits, according to Mr. Matrone, with tire sales, general auto maintenance and revenues as a New York emissions inspection center making up the balance.

    The extra profit from the rental operation overshadows its accompanying headaches, Mr. Matrone said. As a rental agent, the outlet has to be open for business every day, including Sundays, to accommodate customers renting or returning vehicles. The trucks take up a lot of space on the lot, often usurping customer parking spots, he said. And then there are the add-on sales inventories for the rental operation—such as packing materials, boxes, blankets and bubble wrap.

    “It starts to overtake you,” Mr. Matrone lamented.

    It's his admitted “money-hungry” attitude that compels him to come in Saturdays and Sunday mornings to service rental customers, refuel and fix up the trucks. “You have to because people move on weekends. You have no life,” he said. “You make money, but you're always working.”

    Drawing rental customers into the dealership is fairly easy with the prominent yellow Ryder trucks sitting on the lot by the highway. Between the trucks and a loyal customer base, Mr. Matrone said he only needs to advertise in quarterly mailers. “Certain people come to you because they like you, not necessarily because of the Ryder name,” he said. The rental trucks have at times boosted his customer base. “Sometimes we get people inbound (moving into the area). We give them our card. Sometimes we make a customer out of them.”

    While Tallman Tire has built up its rental operation, conversely Willie Tire Service in Houston has experienced a downsizing since it started renting U-Haul trucks nine years ago.

    The small tire dealership started with about five U-Haul trucks but, owner Willie Quinn said, U-Haul changed its system and now only allows him two trucks. He said the U-Haul rental operation “used to be really profitable” but now he has fewer trucks and has competition from other truck renters spread all over town. Despite the drop in business, “I make a little something,” he said.

    Besides selling all brands of tires, which he orders from nearby warehouses, Mr. Quinn sells the add-ons associated with the U-Haul rentals, such as boxes, ropes and packing materials. The U-Haul trucks on the lot seem to help draw business. “A sale is a sale,” he said. “People see you have U-Haul and then they see you have other products.''

    But like Tallman Tire, Mr. Quinn bemoans the fact that the rental operation requires extra hours. He admitted U-Haul isn't pleased when he closes his four-employee dealership for the holiday weekends and Sundays. “They don't like you off for the holidays. They want you open for business.”

    Even with his low-key operation, Mr. Quinn said he does make a profit because the rental business doesn't require any of his own capital. “You put nothing in it but time,” he noted.

    “It's work, but there's a lot of reward,” Budget's Mr. Martinelli acknowledged. “There's no magic to this business, or to any business. It's just good customer service,” he said, and he encourages dealers to answer the phones readily, greet patrons with a smile and be aggressive.

    “You have to sell hard on the phone,” Penske's Mr. Baptisti noted. “Business doesn't just flock in because people see the truck on the lot. That's a common misconception.”

    U-Haul's dealer program manager, David Rose, also suggested dealers display the equipment properly, such as neatly lining up the trucks on the lot for a positive presentation.

    All three companies encourage their rental agents to provide one-stop shopping for customers by offering moving materials. The agent can either buy direct from the company or from other vendors. “It offers a high margin. They can make a nice profit,” Mr. Baptisti said. Some dealers actually make more profit on the materials than they do the rentals, according to U-Haul's Mr. Rose.

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