Using Your Dealer Inventory Policy to Build a Revenue Stream
If you own a heavy equipment dealership, you’ve probably realized that in this economic environment you need to diversify your product and service offering, if you want to earn great returns. What you might not know is that there are ways to use your dealer inventory insurance (also called Inland Marine) to increase your revenue streams. In this article, we look at how these dealer inventory policies work, and how they can increase your profits.
What Is Dealer Inventory Insurance?
Most equipment dealers know what this type of insurance is, in most instances your lenders require you carry it. It provides coverage, for the equipment which sits on your lot, against loss or damage. It protects your investment, before it’s sold to your customers. What you might not know, however, is that with a little forethought, you can also use this type of insurance to generate an additional revenue stream, as opposed to just a fixed cost on your balance sheet.
How Can Dealer Inventory Insurance Earn You Revenues?
Most insurance policies cost you money. It’s a grudge purchase – we all know that. However, with specific policy wording, there is a way to obtain proper coverage which allows you to offer your customers “access” to your dealer inventory policy, which the dealer can charge to the customer, at the time of rental.
This means, after your customer leaves your lot with their heavy equipment rental, you can rest assured your equipment is properly covered. It’s a proven method of transferring coverage while increasing your revenues, without chasing certificates.
What Other Benefits Are There?
- Aside from offering you a quick and easy boost to your profits, offering access to your dealer inventory coverage has added benefits for your customers:
- Eliminates the need for your customers to find and sign up for their own insurance policies – a time consuming, costly and tedious process in most cases
- Offering access to your coverage in this way also allows you to retain ties with your customers, which can be very beneficial, in terms of an ongoing relationship with that customer
- Eliminates lost opportunity costs associated with your customers waiting for a proper certificate to take possession of your equipment and get to work
Offering a Complete Package
By offering your clients the option of renting their equipment complete with comprehensive, quality coverage, you not only create a passive income for yourself, but also position yourself as a one-stop shop.
When you’re dealing with busy people, any service you can offer that adds value is an important marketing tool, and this type of accessible insurance is no exception.
So whether you’re interested in becoming a truly full service dealership, or you’re just interested in creating a passive income stream to supplement your sales, finding a dealer inventory policy that allows you this sort of flexibility might be just the thing you need.