Re-renting equipment from third-party vendors is a routine part of construction operations. But too often, it’s treated as a one-off transaction instead of what it really is: a strategic lever for improving project profitability and optimizing fleet investments.
In our last article, we explored how some contractors are using markup automation to recover costs and strengthen margins. This time, we go deeper, outlining how to build a company-wide re-rent markup strategy that supports smarter job costing, procurement efficiency, and long-term ROI.
Why Re-Rents Deserve Strategic Attention
The truth is, most companies only think about re-rents when they’re in a pinch. An urgent job site request comes in, internal fleet assets are unavailable, and a vendor is called to fill the gap. That urgency often leads to disconnected workflows:
- Job sites get equipment, but finance teams don’t get clear cost attribution
- Vendors are paid, but projects aren’t billed accordingly
- Decisions about fleet expansion or procurement lack real data
When re-rents are not tracked and marked up systematically, the organization loses visibility and money. But when approached strategically, re-rents can:
- Reveal gaps in fleet utilization
- Strengthen vendor partnerships
- Help prioritize future asset purchases
- Ensure every project pays its fair share
Three Pillars of a Successful Re-Rent Markup Strategy
- Establish Clear Markup Policies
Start by defining consistent rules around how re-rents are billed back to internal projects. For most companies, a percentage-based markup works best. It’s flexible and automatically scales with the value of the rental.
Example approach:
- 10% markup on all short-term re-rents
- 15% markup on specialty equipment
- No override allowed without senior approval
Set these rules within your equipment management software to eliminate manual work and ensure consistency.
- Designate Preferred Vendors
Your procurement team likely has vendors they trust. Formalize that into a preferred vendor list with pre-negotiated terms and performance benchmarks. When re-rents are needed, project teams can go straight to the approved list, speeding up sourcing and reducing rate variability.
Benefits of preferred vendor strategy:
- Faster procurement
- Better pricing
- Reduced disputes
- Stronger relationships
RentalResult clients track vendor usage and reliability inside the system, which helps inform future negotiations.
- Create Visibility Across Departments
The biggest gains come when operations, procurement, finance, and project teams are all working from the same playbook. When re-rents are properly marked up and billed to the correct jobs, project managers get more accurate cost reports, and procurement teams get data to evaluate buy-vs-rent decisions.
That visibility can:
- Justify fleet expansion
- Flag underperforming vendors
- Improve project forecasting
- Reduce surprises in month-end closeouts
First Steps to Build Your Strategy
Not sure where to start? Here’s a simple roadmap:
- Audit your current re-rent activity. Where are you sourcing from? Are job sites getting charged? Is the markup consistent?
- Define your markup tiers. Create a simple rule set based on equipment type, project size, or rental duration.
- Automate with your existing tools. Use your equipment management system to enforce rules, flag exceptions, and generate reports.
- Train internal teams. Ensure procurement, PMs, and finance teams understand the why behind the markup strategy and how it protects the business.
- Monitor, adjust, and optimize. Review results quarterly. Track how much revenue is recovered and where breakdowns still occur.
Re-rent markups aren’t just a pricing tweak. They’re a lens into how your business uses its equipment, allocates costs, and manages profitability across every project. With the right strategy and tools in place, you can transform re-rents from an overlooked expense into a key driver of operational and financial performance.
Want help mapping out your re-rent strategy?
Schedule a call with a RentalResult expert to explore how to get started.
