RM Online - What the MBA means to its members

The American Rental Association's Member Buying Alliance (MBA) has been operating for about a year and a half - long enough for members to begin seeing the MBA's impact on their bottom lines.

The return on investment a member gets from the MBA really has no limit, MBA officials point out. An A.R.A. member is required to pay only one fee to participate in the program - the one-time $750 enrollment fee. There are no monthly fees and no minimum purchase requirement.

The value of the program is not limited to the savings on equipment purchases members make from MBA vendors. Other important benefits include the National Yellow Pages program and a National Truck Purchase Program with Volvo/GMC.

Since the creation of the MBA was announced in January 1998, the program has grown from zero purchases, zero operations and zero vendors to more than $8 million in purchases, nearly 1,000 rental operations and 300 vendors. A buying group had been a top request of A.R.A. members for several years, which led to the creation of the MBA.

"We know the members wanted and do want the MBA," said Richard Frechette, Quality Rental Center, Pawtucket, R.I., chairperson of the MBA Committee. "While the MBA has really grown to get to where it stands today, the road to this growth has not always been a smooth one. We've undergone some growing pains that come with creating any new service or business.

"We appreciate the comments and the feedback we've received from members so far, since that lets us know ways to improve the program and make it easier for everyone to use," Frechette continued.

"We're doing what we can and will continue to work toward making the MBA the most complete program it can be. But it takes time, it takes patience and it takes volume, and we appreciate the understanding of the members and the vendors as we work on the program."

As with any program, the members who use the MBA know it best. Recently, several of them shared their opinions about their savings in both time and money and the additional membership benefits.

Doug Jones, East Kentucky Rental and Supply, Hazard, Ky., is a charter member of the MBA, having joined in March 1998.

"We use it quite a bit - in fact, I was just getting ready to place some orders right now," he said. He sees the savings on equipment purchases as the biggest advantage of the MBA.

He has made more than 30 purchases and spent more than $25,000 through the program. "If we've saved even 5 percent on what we've bought by being in the MBA, then it's been well worth it," he said.

Jones advised those who are not part of the MBA to try it out and give it a chance. "It's all a matter of habit," he said. "You've probably been in business a lot of years and have built up relationships with your distributors. It's hard to change. But try the MBA for six months - what have you got to lose? And you'll be saving yourself some money by doing it. You'll find for the most part that your relationship with your distributor changes little, if at all."

Herb Swanson, Herb's Rent-All, Wenatchee, Wash., has used the MBA since the beginning. During its first month of operation in July 1998, Swanson made 16 purchases through the program. Today he has made more than 60 purchases and buys more almost every month. As the owner of a single store, he believes "it's an advantage to be able to buy at a rate I could never get on my own."

Swanson said he finds a wide variety of vendors, and he buys from vendors from whom he has not purchased before, just because they participate in the MBA. "It's been a great opportunity for my store to take advantage of the MBA, and it's also allowed me to save so much on my purchases," Swanson said. "Now, because of the MBA, I'm able to buy parts, which has allowed me to expand my store's services. A buying group is something that we've all wanted for a long time from A.R.A. I was happy when it was originally created and couldn't have imagined something this beneficial."

One thing could improve the MBA, Swanson said: "What's going to help me and everyone else involved is to get as many people as possible to participate. There's strength in numbers."

While Jones and Swanson own smaller rental operations, larger stores also save through the MBA. A.R.A. Vice President Charlie Neffle, All Occasions Event Rental, Cincinnati, also is a charter member. He has made more than 40 purchases through the program. "The more volume we build by buying through the MBA, the better prices will become because the vendors will see the value," he said.

Neffle acknowledged that the MBA is a different way of purchasing for most people. "It's been a learning process for the members and the vendors, since there is a third party involved in the process. But buying through the program demonstrates to the MBA vendors it was worthwhile for them to join."

Neffle described the additional programs as great benefits of membership. "The Yellow Pages program especially can be a great savings for MBA members, and many have taken advantage of it already." Neffle encouraged members who are not part of the MBA to join and support it.

"The A.R.A. membership asked for this program and here it is. We should take advantage of it. We also need to be patient and realize it takes several years to build the program to its maximum advantage. But it takes participation to get it to that level."

Being able to purchase equipment through the MBA was one of the main reasons Jack Pieper of Commercial Rental, Macomb, Ill., joined both A.R.A. and the MBA in November 1998. Commercial Rental's parent company, Laverdiere Construction, had grown large enough that it did not use all its tools and equipment all the time, so it decided to enter the rental business. "The rental store opened about a year ago, and we purchased additional equipment to aid the homeowner through the MBA. It just made sense to do this, and I've been really happy with the program and the service and especially the fast delivery on our purchases. It's worked out great," Pieper said.

He had a word of advice for those who have not joined the MBA: "You're missing out on some great buys."

Those great buys come courtesy of the vendors who have joined the MBA program. For Barreto Manufacturing, LaGrande, Ore., joining has been beneficial. "We've gotten a lot of business through the MBA - the members account for a good percentage of our business," Lee Bogle, sales manager, said. "Some customers have said they are purchasing from us just because we are part of the MBA."

Bogle said the company joined the MBA because it could see potentially more than half of its existing customer base was eligible to join the group. "It just made sense to be a part of it," he said. Most feedback Bogle hears from MBA customers has dealt with the company's pricing on its tiller and trencher products. "People really appreciate the pricing incentives," he said.

Barreto's sales volume through the MBA underscores Bogle's point. "The fact Barreto is nearing the $1 million mark in MBA sales should be a sign it is working for them," Frechette said. Members who have made those purchases back this up.

Dave Wilcox, General Rental Center, Frankfort, Ky., was familiar with Barreto's products, but had not found a reason to use them. "After the MBA started, I was talking with some other members, and one said he had purchased a walk-behind trencher from Barreto. The feedback he received from his customers about this product was great - people preferred this one and asked to rent it specifically," Wilcox said.

"We then purchased a trencher and have had good customer response and good feedback about it," Wilcox said. "People specifically ask for it when they come in. I'm very happy with Barreto's pricing, products and service and will order from them again."

A.R.A. members who are not yet members of the MBA still have time to join before the A.R.A. convention in Anaheim. To receive an application packet or to have questions answered, call the A.R.A. at (800) 334-2177, ext. 281.