Nearly two years after the Member Buying Alliance was introduced at the 1998 A.R.A. convention, and 18 months since it began operation, the impact on the businesses of those who have joined the program are coming into sharper focus.

The American Rental Association launched operation of the MBA on July 1, 1998, to provide a means of leveraging the group buying power of the A.R.A. membership. For any such group to succeed, it needs buyers who are willing to pool their purchasing power to obtain volume-purchasing discounts. The more volume that goes through the program, the greater the discounts become. Also, the more volume the program generates, the more attractive it becomes to attract more vendors to itself.

Since the MBA debuted, about $8.5 million in purchases have been made through the program, according to sales figures through mid-November.

Assuming an average saving of 5 percent per purchase from all MBA suppliers - actual discounts may be 2 to 3 percent or as much as 30 percent, depending on the vendor and the product - MBA members have kept about $425,000 in their pockets by purchasing through the program. According to Joe Lynch, A.R.A. deputy executive vice president, that amount represents about $1,100 in savings per member store per year.

"That might not sound like a lot, especially since it's an average," said MBA Committee Chairman Richard Frechette, Quality Rental Center, Pawtucket, R.I. "But when you consider that the member has only paid the $750 enrollment fee and had no monthly fees or minimum purchases, it's not bad at all. Plus it will continue to grow in the years to come."

Frechette said the key to getting more MBA savings is an increase in membership and an increase in sales volume.

"Many of the MBA's critics said we'd never make it to $1 million in sales, and look what we've done so far," he said. "Our sincere thanks go to all the MBA members, especially the charter members, who have helped make the program the success it is today. But to increase the discounts, and to make the program more beneficial for everyone, the program needs a greater sales volume.

"Sometimes it's tempting to go around the MBA to save an additional 1 or 2 percent," Frechette said. "Going around" the program, he explained, means buying from an MBA vendor, but not running the transaction through the MBA system. "In the long run, that hurts both the program and the chance to increase the volume and get greater discounts for all members. The whole point of a buying group is to pool together."

One of the greatest selling points for a program like this is the success stories of satisfied members. "If you're an MBA member who actively purchases in the program, tell your fellow rental owners about the program and about your dollar savings and time savings," Frechette said. "You've made the commitment, you've helped the program grow to what it is today and you can help the MBA achieve even greater success by spreading the word."

MBA members gear up

for Anaheim convention

The 44th Annual A.R.A. Convention and Rental Trade Show is the single best opportunity for members to use the Member Buying Alliance's purchasing power to full advantage in buying from program vendors.

Almost $4 million was purchased through the MBA at the 1999 Las Vegas convention, and MBA officials expect to double that amount at the 2000 show in Anaheim.

Current MBA members are lining up their financing now, and completing their convention plans. For nonmembers of the MBA, there is still time to join before the Feb. 14-17 show. Joining while in Anaheim is another option. Regardless of anyone's membership status, financing is the key to successful purchasing at the A.R.A. show.

"When you join the MBA, you complete an account application and agreement with National Hardlines Supply. Using the financial information you provide, NHS will establish an account and credit limit for you," Frechette explained.

"If you want to purchase more than what NHS has allowed for - and many people do - you can establish financial arrangements with your own lending institution, a leasing company or a lending group such as The Associates. You also can call NHS at (630) 472-4997 and ask for Jeff Sieben. He can provide you with a list of lending institutions that have established a relationship with the MBA."

A common question about the MBA is what happens if an MBA member exceeds the established credit limit with NHS?

"Before placing the order, NHS will contact you after the convention to let you know you have exceeded your limit and ask how you would like to handle the balance," Frechette explained. "It's an understandable situation. With all the deals available on the show floor, it's difficult to keep track of your NHS account.

"The options available are to send NHS a check or to inform them of your source of credit, such as The Associates or another lending institution. Once that is taken care of, your purchases will be on their way," Frechette said.

MBA members will receive a show special catalog in late January or early February outlining the show special pricing available from vendors while in Anaheim.

Additional programs a

benefit to MBA membership

Besides the purchasing opportunities, the MBA has two additional programs to benefit members: the National Yellow Pages and the National Truck programs.

The National Yellow Pages program can save members up to 8 percent on Yellow Pages advertising based on purchases through the MBA. "The more you buy, the more you save," Frechette said. "So far, MBA members in the Yellow Pages program are saving an average of $1,288 in their Yellow Pages advertising compared to the previous year. One store has saved more than $3,400 over their last year's figures.

"When you add the average Yellow Pages savings with the average savings through the MBA on equipment purchases, each store (in both programs) is saving almost $2,400 per location," he said.

The National Truck Program with Volvo/GMC allows members to purchase trucks, pickups and delivery vans at national fleet pricing - a substantial savings.

MBA in Anaheim

Discounts on equipment purchases are not the only MBA benefit at the A.R.A. Convention and Rental Trade Show Feb. 14-17 in Anaheim. Here are some things to remember:

• MBA Reception: During this reception, scheduled for 5 to 6:30 p.m., Sunday, Feb. 13, in the Anaheim Convention Center, MBA members and vendors can learn more about the program and socialize.
• Giveaways: MBA members are eligible to enter a drawing to win a truck and other special prizes to be awarded during the convention. For details, visit the A.R.A. Membership Services booth, near registration, or the MBA booth, no. 5616, on the show floor.
• MBA Ribbons: All MBA members and vendors can be identified at a glance by the MBA ribbons on their convention badges.

To receive an MBA application packet or to have any questions answered, call the A.R.A. at (800) 334-2177, Ext. 281, or call the

A.R.A. fax-on-demand system at (877) 384-7368 and request an

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