I had the opportunity to meet with a number of other business owners in the past few weeks and I was surprised at how many businesses are starting up renting a service or a product to a customer. One company, I forget the name unfortunately, has started to rent big ticket dresses to ladies wanting a very expensive dress for a special occasion. Apparently women don’t wear these purchases often (like us men going and buying something manly like some new alloy wheels and then not actually fitting them to the car) and so there is a great business model in renting say a £1,000 dress for £75 for the day.
I know we have become a credit society but this isn’t actually being in debt, more renting something for the experience rather than feeling like we have to own it. I mean why pay £30,000 for a car when you could pay £400 per month and keep the cash in the bank. It is unlikely you aren’t going to change it in a few years time and why not view that £400 as your cost for travel, as people do when buying season tickets on the train. It is an idea that revolutionised GM and made them more like a bank that makes cars. Obviously there are the exceptions and I appreciate that but leasing or renting a product is not new, it just seems that now it is becoming more prevalent, and available with more products and services than ever before.
For example in my company, Fluidata, we lease the majority of our hardware now to our customers, as they don’t put much value on it once they finish with our service. So renting is easier than owning. Then we have a music system in the office (the superb Sonos system) which has a Spotify account so we have access to nearly all the music we would want for a flat monthly fee – which stops the arguments. We even pay for the plants monthly – our provider come and water them and even replace them if they die.
While this all sounds great there is of course a downside in that when the income stops you end up with very little… But it does look like, for the moment at least, the opex model is becoming more popular.