Web-based cross-rental platform Second Warehouse recently introduced a new CashBack feature to its service, designed to enable rental companies to earn money from hiring in pro AV equipment.
Launched back in February, Second Warehouse aims to make the cross-rental process faster and more efficient, allowing companies to do business in a safe and cost-effective manner. Its new CashBack feature is designed to provides users with up to three per cent cash back against the amount they spend on equipment hire within the system. All users will receive two per cent cash back on the total value of rentals they make. That percentage will rise to 2.5 per cent cash back after a user has either made 10 rentals or entered at least 50 qualifying items into their own Second Warehouse inventory. After 20 rentals or entering at least 100 qualifying items into their inventory, users will benefit from the full three per cent cash back. The cash payouts will occur twice per year, providing users with the time to accumulate a bi-annual lump sum.
To find out more about CashBack and how the pro audio market has taken to Second Warehouse, Daniel Gumble spoke to its founder, Stuart Kerrison...
What’s been happening with Second Warehouse since its launch earlier this year?
Our first half year has outstripped our expectations. We are far ahead of where we hoped to be at this stage, both in terms of the number of companies who have registered to use Second Warehouse and the equipment that has been added to the rental inventory. In the meantime we’ve also been paying very close attention to how companies have gone about cross-renting equipment in the past and how they are now beginning to use Second Warehouse. It’s all been really exciting and the progress that we’ve already experienced has enabled us to look further ahead at implementing a whole host of new plans.
What has the response been like?
Without exaggeration, it’s been 100 per cent positive! Prior to the launch of Second Warehouse we conducted a long period of beta-testing, when we ran demos for a lot of rental companies throughout Europe. The feedback was really encouraging, but I always wondered if the real response would be a bit more subdued when the service went live. In fact, the opposite has proven to be true. We now have hundreds of rental companies across the UK and Europe signed up to the service, and the general feedback is that Second Warehouse is a service whose time has come. I won’t pretend that there haven’t been challenges along the way, but I’m very proud of what we’ve built in such a short space of time.
Explain how the CashBack feature works.
Pro AV rental companies have always earned money by renting out their equipment, but now, for the first time, rental companies can earn money when they rent equipment in. Renting in extra equipment is part of everyday life in a rental company, so equipment sub-hires are an unavoidable, necessary expense that everyone just accepts. Now, when you make those sub-hires through Second Warehouse, you can actually earn up to three per cent of the rental price back – not in points or vouchers but in real cash. As before, you’re free to negotiate prices as much as you like with as many companies as you like, but no matter what final deal you end up with, you will always get between two per cent and three per cent of that amount back.
This is a brand new feature but we’ve already become accustomed to our users having to take a little time to let its significance sink in, particularly what it could mean for a rental company’s bottom line. With the enormous sums that companies spend on sub-renting in equipment every year, we’re talking about a substantial amount of money coming back. The fact is that if a company chooses to rent in equipment through any means other than Second Warehouse, they’re literally throwing away thousands of Euros. Meanwhile, every company who chooses to rent in gear through Second Warehouse will get at least two per cent of that rental price back. Companies who make their own equipment available for hire by adding it to their Second Warehouse inventory will earn 2.5 per cent or even three per cent. The more you add, the more you earn. And that’s on top of what you make hiring out! All of this is paid back to users in real money, straight into your bank account, twice per year. We’re really excited to find out how the industry feels about CashBack, but it’s not the only big addition to Second Warehouse.
As part of this update we’re introducing two new search methods, one of which allows a renter to simply tell us what they need so they can get back to other things while we gather quotes on their behalf. The other new search method is aimed at solving a huge problem which every touring professional understands – those last minute emergencies when a piece of equipment fails and you desperately need to find a replacement. For the first time, finding that gear is as easy as pressing a button thanks to what we call SOS Mode. You simply tell us what you need and we’ll send urgent SMS and mail messages to every relevant supplier in your local area, asking them to get back to you within 12 hours. Problem solved.
Have you encountered any sceptics wondering if there is a catch?
In terms of our CashBack scheme, the answer is not yet – but we’re sure there will be people who are sceptical initially, and that’s fine. The best response to those worries is to try the system and experience the benefits. Also, we work in a relatively small industry where everyone knows one another. Word will spread quickly that this is exactly what it seems to be – a really good deal.
Do you think this latest development will help get more people on board?
Getting companies on board isn’t really our priority right now, as at this stage we already have far more European companies registered with us than I anticipated at this stage. Of course, we always welcome new registrations. I’m sure that all the news surrounding CashBack will bring new companies onboard and in turn that will create an even bigger pool of equipment to rent so everybody wins. But features such as CashBack, SOS Mode and Gear Finder, are more aimed at driving day-to-day rental activity. We’re really proud of what Second Warehouse has achieved but we’re never going to be complacent about the need to bring in new innovations to keep our users on the system and feeling great about being part of the Second Warehouse family.
How challenging is the task of persuading the industry to part with the traditional rental/ cross rental process?
It is definitely a challenge and it would be foolish to expect otherwise. That’s why we decided to start Second Warehouse in careful stages and take our time to make sure everything was right before we announced features such as CashBack. Changing the way people work and go about their daily lives is always a really long process, even when it’s offering to make life easier. People are creatures of habit and they naturally stick with what they know, especially in a business as traditionally conservative as Pro AV rental. We’ve taken that challenge very seriously with a lot of marketing activity to help spread the word – including good old fashioned knocking on doors – and a carefully planned strategy for building a long-term platform. I think it helps a lot that Second Warehouse is made up of people from the audio business so we understand where our users are coming from and what they need from us. Also, it’s important to remember that the times they are a-changin! There’s a new generation of younger companies coming up, run by people who have basically grown up online. They are open to newer, more efficient ways of doing things, and for them online services like Second Warehouse are now the norm. The world has changed and our business is changing with it.
How many companies are currently using the service?
Well the number grows by the day but it’s already in the hundreds. We are meticulous in ensuring companies pass a credit and status check when they register to make sure that Second Warehouse is a safe environment in which to trade. Registered users have access to our user list on the service so they can see which other companies are on board.
What next for Second Warehouse?
I don’t want to get into specifics now, but there are a lot of exciting things on the horizon. It’s clear that other third party software developers, equipment manufacturers and vendors see the many benefits of a service such as Second Warehouse and we are currently in discussions with a number of them regarding future integrations and services – the message is very much watch this space.