True and the payments up front assured them of at least breaking even. And if you made the payments, there was a lot of profit built in.
We might have the same guy in common. This man owned a single store for about a decade. I was friends with his daughter and nephew. I worked for him two summers and outside of his business, he was a great mentor.
I parlayed my vast rto knowledge into working for a national chain while at UK.
If you're still talking rentals....back in the day I knew (not close friends) and had lunch a few times with Charlie Laudermilk...founder and owner (at the time) of Aaron Rents. Lots of profit.
The mom and pop as well as the national chain, both had the same formula. Neither bought merch in a significant quantity to buy inventory much cheaper than regular retail. The local had 250 items out on rent. The chain averaged 500 units/store. The store I worked at was the biggest in the chain. It had 1000 units out on rent. A sofa/end tables/lamps would be three units.
The contracts were setup 78 weeks or 18 months. Whatever the company paid for the item, it was marked up 3.5x and divided by 78 to figure the weekly rent.
That sounds like a lot of gravy, right? Well, none of these people have credit, or they wouldn't be living this way. More employee time is spent bill collecting in person than delivering to merchandise to begin a new contract.
The only product that they rented that I didn't feel bad about people getting taken advantage of was washer/dryers. Even though they were paying 3.5x cash, it was still cheaper for a family to rent a set than take their laundry to a laundromat.
I still have a Dwight Schrute like plaque
from December,1991 stating I was the accounts manager(debt collector) of the month for a 37 store chain. I had less deadbeats delinquent than anyone else in the chain for a month. For my efforts I was given a plaque and $250 bonus.
We were allowed to knock on doors up to 8PM any day, but Sunday. Your first angle was the phone call to get a time commitment. If you couldn't reach by phone or they didn't honor the commitment, you went to their home. You had one week to get them to pay or pick up the rental.
I worked the very worst Lexington neighborhoods. Young, dumb and could have very easily ended up dead in a dumpster.