Sample Leasing Model for Your Biz Card Dispenser Advertising Business
I’ve spoken about this in the past, but it has come up again through an email I got from a biz card dispenser operator. The nature of the email I received was referring to ways to get more customers, and how to leverage the dispensers as best as possible.
So… yes you can make money with your biz card dispenser without having to fill them yourself. How?
Well it comes back to this… if you go into a potential location who ‘rejects’ your proposal to locate your dispenser in their establishment for whatever reason, then you can reply to their objection with an offer of a different kind based on leasing the display to them and they fill it up and make the majority of the profits for themselves. You could say something like this…
“Mr/Mrs business owner, I understand that you’re not overly excited about locating this biz card dispenser in your shop, but what if you knew you were going to make an additional $100+ p/week from having it here to help pay your overheads? Would that be of interest to you?” (Of course this offer will be of interest to 99% of the people). You can then go on and ‘run the numbers’ with them…and say “Mr/Mrs business owner, each of these business card advertising spaces rent out for $1 p/day, which is profit of $xxx p/week, and the top section of the display rents out for $2 p/day… so that’s a total profit of $xxx p/week. So what I’m prepared to do is lease the display to you for a fixed amount per week and you can offer the advertising space to your customers as they walk in, and in addition, you can have two next to each other as it grows with popularity … don’t you think this could be simple passive income for you and your business?”
The above ‘script’ is just an outline on what you could test, but keep in mind that all you’re doing is not taking no for an answer after your first offer, and offering another alternative for them to consider. Also, don’t be afraid to outline the revenue potential to them, because that’s exactly what’s going to get them excited!
So how much could you charge them to lease a biz card display from you?
The first thing you might think here is “But once they see the idea they might go onto the internet and buy a display for themselves”, and you would certainly be correct in your thinking. My thoughts about this matter are quite simple, because I’ve learn’t over time that most people are either ‘all talk no action’ (and generally broke), or they simply ‘won’t get around to it’. It’s all a numbers game and the numbers always seem to work out the same. From every 10 people you make this proposal to, only 1 will go around you… so what about the other 9? Well some of them will take you up on it… but you must package it a little also. You might include a script for them to say to their customers, and give them ideas along the way as you learn them yourself.
In terms of a dollar figure to lease it to them for, well that’s what you’ll need to negotiate with them… and it’s going to be based on the amount you paid for your dispensers Vs pay back time you’re looking for. Keep in mind also with this calculation that you’re not having to do much work, so you might not get a large amount of money, but something is better then nothing when you’ve still got other displays that aren’t located!
To put a $$$ figure on the lease price as an example, you might calculate that each display makes $15p/day x 30 days = $450. So how about you propose that you get 20%p/month for supplying the display and they get 80%?
So what else might you need to allow for?
Security and safety of the display. Just like any other leased product, a ‘damage/theft’ deposit could be in order…and maybe atleast 50% (or all) of your actual costs as a deposit could be your aim. This deposit is refundable as long as your display is returned in perfect ‘re-useable’ condition. So at the end of the day you really minimize your risk by getting a deposit.
Think of this whole leasing concept like this… you are essentially selling them a business to run within their business without increasing the overheads of their current business. Maybe read that again last sentence again.. it’s almost a tounge twister the way I just wrote it, but it’s a very powerful way to pitch it to the potential client in terms of an ‘opening line’ to hook their attention.
See what you can do with this idea should it arise… but more then anything, it’s another tool in your sales toolbox that you can use if this scenario arises.
Let us know here online if you’ve either tried this or would like to add to it. We’d love to hear it!
Dean
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10 Responses to “Sample Leasing Model for Your Biz Card Dispenser Advertising Business”
Dean
The business with this model is more than that, Our location owner do not like to hold 1 if they can’t exchange with other locations. The exchange systems bring more business to them and with our record. We can sell more than 3 displays a day. This systems is work rathan we take care of so many process.
Phileas
November 20th, 2007
Dean,
I’m a bit fast here. Let me slow down how it works.
When we approach the retailer for using the display to make money by themselves. Most of them are not interested. When we tell them the story of exchange cards with another location display where there are sharing same group of customers, but no conflict to their business. Then they realize it can create leads from other locations plus doing almost free advertising. Just print the cards. Again, if we lease the units to them, they can also cover the cost by collecting rental from walk in advertisers. Ok! That’s not enough. We have to market their location through internet, agent and for those who like to rent the locations, they can order online. WE get some commission. This strategies was just started. and when people want to advertise, they have to rent display from us not advertise with us only. This method might not making great money at the beginning because we can’t collect rental from the compartments, but for long term, we owned the distribution right and we can market to those “big guy”! That’s how interesting about this project.
For example, maybe one month we can hit 30 untis, and our income for small company will get RM 1,800 (100 per month + 300 deposit) x 30 units = RM 54K, sound good to us. I’m working on the whole process, and we want this method can be duplicate around the country. THen it will be great success for Free Card Display.
At the end, the “network” value a lots of money. Dean, that’s why your website design template is important to all the locations owner or retailer.
Phileas
Phileas
November 28th, 2007
Hello all and well done for all the good work. I take it that this leasing model is based on the assumption that the units have been purchased by you. Has anybody come up with a similar concept where the operators (in this case the locations) actually also finance the purchase cost of the display while u don’t actually lose ownership of the unit?
Nikos
January 29th, 2008
Also, regarding this leasing concept. To my understanding this will mean a. a lot more work on the location’s side b. probably some legal tax implications for them c. problems in controlling the process and the actual income figures achieved (on what basis will you claim your share?). So instead of all that, why no just increase the rent you offer to the specific location for hosting the unit?.. jsut some thoughts, thks
Nikos
January 29th, 2008
Hi Nikos… good to hear from you!
You are correct in saying that you would own the displays before on-leasing them to a business owner. In terms of them financing your initial purchase of the biz card displays and you still maintaining ownership, well that might be possible, but given that displays aren’t that expensive to buy, you might consider taking a different approach… like asking for a ‘deposit’ from the business owner that is refundable should the displays remain in the original condition when the lease period expires. This deposit would cover a large portion of your up front display purchase amount, whilst reducing your risk of losing all your investment if the display got stolen or the business owner refused to pay (or whatever worst case scenario COULD happen).
You are correct in saying that it’s more work on the locations side… that’s better then you doing more work isn’t it 
. They have customers walking in all day long, so all they really need to do is mention it, or give their clients a brochure… that’s it. It’s not really ‘work’ for them… they already have the customers. Put it this way, it’s more work for you to find customers than it is for them, because you have to go out and find the customers, but for them the customers are walking in their door.
About the legal and tax implications… what happens on their premises is out of your hands. Most places will have insurance for incidents that happen within their store… like someone slipping on the wet floor etc. So if someone gets hit by a flying biz card display in the store, they would most likely be covered. Tax implications? That’s an individual matter as each country has different tax rules. The leasing income from the displays would be subject to tax I would think.
Regarding the income and figures, what would be easiest is if you get a set amount from them per week or month, and walk away. Tracking figures would be a nightmare and not worth the time.
At the end of the day, just talk to the business owner and work out a deal face to face based on the course of the conversation. Go into the meeting with a basic leasing model in mind, and then customize it as you go.
Hope this helps.
Dean
deanc
January 29th, 2008
Thks for the feedback. Could a leasing model be a good way for a quick larger scale expansion to other geographic areas? This would be an alternative to an outright sale i suppose but closer to a franchise (although not called that…)?
Anonymous
February 4th, 2008
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Come to think of it, make sure you also give them some marketing material (such as a flyer) to hand to their customers also as part of your packaging. You can also ‘drop by’ and take a few cards for yourself from the dispenser and sell them into your other displays
.
Dean
deanc
November 19th, 2007