[su_box title=”As you can see in the below table, different brands of Telehandlers have higher margins than others.” box_color=”#ddd” title_color=”#000000″]
|Year||Manufacturer||Model||Size Class||FMV||Weekly Retail Rental Rate||Gross Margin|
|2014||JCB||506C||2.71 – 3.0 MTons||$50,583||$902||64.91%|
|2014||JCB||508C||3.6 – 3.9 MTons||$63,976||$947||53.88%|
|2014||Genie||GTH-5519||2.2 – 2.70 MTons||$57,915||$766||48.14%|
|2014||Sky Trak||10054||4.5 – 4.9 MTons||$111,573||$1,369||44.66%|
|2014||Genie||GTH-1056C||5.0 MTons & Over||$158,317||$1,469||33.78%|
It is no secret that lift trucks are very popular items in the rental market, especially Telehandlers (Telescoping Boom Rough Terrain Lift Trucks to our EquipmentWatch Values customers). The above margins are based on the maximum annual rental potential (52 weeks) with a reasonable utilization of 70%. We then divided that number by our Value to get the maximum gross margin. We also do not take into account any cost factors such as maintenance or gasoline when calculating these margins, because those factors are beyond our control and can vary substantially across different companies. We also do not factor in the wholesale or financing incentives that OEMs offer to rental houses. These margins are very important for all three sides of the equation (contractors, renters, and OEMs). Rental houses always want to maximize their margins and contractors always want to reduce costs, while OEMs want to secure the maximum possible price for their equipment. If premium OEMs see that rental houses are purchasing lower-cost brands, they will offer discounts or incentives and if rental houses see that customers are renting more of the lower-cost brands, they will start to carry more of those brands. Each side can influence the market in different ways, so it’s important to keep track of the various trends in the rental industry.
The lift truck market is dominated by a small number of manufacturers, which produce highly comparable products. Genie, JLG (Sky Trak & Lull), and JCB make up the majority of the models in this type of lift truck. Genie and Sky Trak are more of a premium product, while JCB prices are generally more competitive. The margins on the JCB are a little higher than those of Genie and Sky Trak due to the lower cost to own.
The five models in the table are some of the most popular models in the rental industry based on rental house listings. All five models have different lift capacities ranging from about two tons to over five tons. The higher lift capacity models obviously will cost more than the lower models. Also, the less expensive the equipment, the higher the margins should be. As you can see, the Genie GTH-1056 margins are a good bit lower (14%) than the smaller GTH-5519; the same is true for the two JCB variants, with the 508C margins resting about 11% lower than the smaller 506C. The Sky Trak 10054 is a very popular brand made by JLG that has been around since 1994 and always brings a premium price with lower margins (44.66%).
Depending on what size Telehandler is needed, it’s likely that one of these three trusted brands can meet renter and contractor expectations. For rental companies, to maximize margins it is clearly better to go with a less expensive, yet reliable brand such as JCB or the smaller size Telehandlers from one of these brands. In terms of rental rates, most rental houses will charge about the same rate for each size class without any significant cost penalty for renting premium brands.
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