I feel convicted to praise the rent-to-own companies in our industry that have supplied the funds in a big way to grow the shed business into what it is today.
When I began my journey selling sheds (back when the dinosaurs roamed the earth 25-plus years ago), rent-to-own just wasn’t available. All I had to rely on were cash customers along with traditional finance companies that lent money based on credit score.
I recall one year losing over $200,000 in sales due to my customers’ credit or lack thereof. I remember holding my breath and crossing my fingers when I would submit a credit application. The finance company would either call me back with a yes, or they would say no.
My ability to sell sheds and make a comfortable living was largely determined by my customer’s credit score. Sometimes my customer’s credit score was great, but their debt-to-income ratio would cost me the deal. Things were much, much different back then.
When rent-to-own hit the scene, it was like manna from heaven! I mean, I felt that it was too good to be true. Suddenly, all of my customers were approved to purchase a shed, and the volume of sales started to climb at a rapid rate!
As time went on and the industry grew, my appreciation and respect for the RTO companies/industry grew as well. I can’t even imagine not having RTO funds available to fuel sales. And I don’t want to. That’s why I wanted to share a few of my thoughts on the RTO business. I hope you don’t mind.
We need to protect the RTO companies. Rent-to-own is an absolute luxury for the shed industry. It is such a powerful tool in our success that it must be protected. What do I mean by protect? I’m glad you asked. You will serve the RTO companies well by doing a few simple things.
I personally encourage my customers that choose RTO to pick the shortest term, and I educate them on the advantage of paying off the shed early. If a customer wants to do a longer term, such as the 60-month option, I try to get more down payment than required if at all possible.
I really try to sell the customer on the 36-month term, especially since more of their money goes for the actual purchase of the shed. This also reduces the risk for the RTO company.
Whenever I get a repo back, I try to sell it as quickly as I can—for more than the RTO company has priced it for. This not only helps me; it really helps the RTO company recoup some of the money they have lost in the process. Remember, the RTO company has already paid for the pick-up and delivery of the repo, in addition to a commission to sell it. It all adds up to a huge expense for the RTO company.
I encourage all of us to treat the money from RTO like it’s our own. By encouraging shorter terms, larger down payments, and selling repos for more than asked, we can greatly reduce the risk for the RTO companies and keep the Golden Goose!
Repos are a HUGE opportunity for delivery drivers! The RTO industry relies heavily on delivery drivers to pick up and redeliver repos. In this day and age of high-volume shed sales, delivery drivers are in big demand and are vital in this process. I can’t tell you how much you are appreciated!
I know that I have predominately focused on the RTO side of the business, but I would like to point out that we all rely on each other—from the lumber and material suppliers to the builders to the sales and marketing folks, and the delivery drivers.
We all need to work together in order to make our industry the absolute best that it can be for the wonderful customers that spend money with us!
I truly believe that we are at the beginning of the “golden age” in our industry. When I began my sales career, I never imagined that we would have a Shed Builder Expo, Shed Haulers Bash, Shed Geek Podcast (those guys are really cool by the way), and of course Shed Builder Magazine!
I feel that we must protect and honor the RTO companies that provide the funds that keep our industry moving forward. Without them, every aspect of the shed industry would suffer greatly.