{"id":22865,"date":"2020-04-13T12:44:36","date_gmt":"2020-04-13T07:14:36","guid":{"rendered":"https:\/\/www.fatbit.com\/fab\/?p=22865"},"modified":"2025-11-17T12:45:39","modified_gmt":"2025-11-17T07:15:39","slug":"roadblocks-in-starting-online-rental-business-and-how-to-overcome-them","status":"publish","type":"post","link":"https:\/\/www.fatbit.com\/fab\/roadblocks-in-starting-online-rental-business-and-how-to-overcome-them\/","title":{"rendered":"11 Challenges Faced by Entrepreneurs When Starting An Online Rental Business – How To Solve Them"},"content":{"rendered":"

Last Updated: 13th June, 2022<\/em><\/p>\n

Online rental businesses are soaring in demand courtesy of the changing consumer habits favoring rental over the purchase of goods\/services. It all started with Airbnb; a peer-to-peer website that offered people a way to find affordable rental spaces and explore foreign cultures like a local. After that, there\u2019s been a flurry of websites offering rental options for everything from home and office furniture, textbooks, construction equipment, travel gear, to dresses and musical instruments.<\/span><\/p>\n

The Rise of Rental Economy – Promising Sustainability & Economical Usage<\/b><\/h2>\n

It\u2019s not difficult to understand why renting has garnered widespread popularity when one considers the benefits it has to offer. Right off the bat, there\u2019s the cost factor; it makes more sense to rent expensive or infrequently used items. Additionally, individuals who own such items are eager to list them on online platforms to make passive income. In a way, both renters and rentees satisfy each others\u2019 needs and make rental a viable and profitable business model.<\/span><\/p>\n

At a macro level, renting reduces the stress on resources as a single item circulates to fulfill many people\u2019s needs over its lifetime. Furthermore, an online rental platform can be started with just about no inventory since the sellers\/providers create the demand. All of this makes one thing clear \u2013 if you\u2019re planning to become an online rental business owner, this is the right moment.<\/span><\/p>\n

What you Need to Know Before Starting an Online Rental Business<\/b><\/h2>\n

If you have a business idea to start an online rental marketplace platform, then you\u2019d have thought about how it will operate. From the technology to business models, revenue streams and so on.. Moreover, you must also have some ideas about the website\u2019s looks and it\u2019s overall user experience. It\u2019s vital to not try to match your website against the likes of Airbnb because their present website doesn\u2019t tell their entire story.<\/span><\/p>\n

In the beginning, Airbnb was nothing more than an average WordPress website managed solely by its founder Brian Chesky and Joe Gebbia.\u00a0 What it did allow them was to test the market demand for their idea and that should be the aim of every startup online marketplace owner. That\u2019s why it\u2019s better to launch a minimum viable platform (<\/span>MVP<\/span>) and integrate new features\/functionalities as you learn more about your user\u2019s needs. But even that journey is rife with challenges.<\/span><\/p>\n

Challenges Faced by Entrepreneurs When Starting an Online Rental Business<\/b><\/h2>\n

At FATbit technologies, we have built a number of marketplace platforms for a diverse range of industries. In our experience, we\u2019ve found the following are the major challenges in setting up an online rental marketplace.<\/span><\/p>\n

1. Getting a Business license<\/strong><\/h3>\n

The Challenge:<\/b> Businesses are often regulated by state or federal agencies. They allow entrepreneurs to conduct legal business operations under specific geographical jurisdictions of the respective governing body. The common problems that entrepreneurs face in getting a business license is the lack of direction about the licensing process, misclassification of business, and conflicts with licensing agents.<\/span><\/p>\n

Solution: <\/b>To soundly apply for a business license, the correct approach should be to rely on government websites. The cost of the license can vary from location to location and you may need to purchase separate licenses for operating your business in different jurisdictions. Delay in issuing a license or skipping this step can result in heavy fines and civil lawsuits, whereas obtaining a business license will provide you with benefits like legal protection and eligibility for funding.<\/span><\/p>\n

2. Select The Right Hosting Service Partner<\/strong><\/h2>\n

The Challenge:<\/b> Online businesses require a website, which comes with hosting and a server. While there are several businesses self-hosting their websites, for non-technology business, self-hosting isn\u2019t a viable option, especially in the startups category. As a result, they first get stuck between finding a reliable hosting service and then with the method of website development. <\/span><\/p>\n

Solution: <\/b>Different hosts offer different kinds of servers at various rates with most popular ones being Linux and Windows servers. However, the majority of them have their plans sorted for personal websites, blog sites and businesses. Their business plans often include an SSL certificate, anti-malware software and other site protection features, which make them suitable for a rental marketplace.<\/span><\/p>\n

3. Selecting Website Development Method<\/strong><\/h3>\n

The Challenge:<\/b> There are two ways to get your rental marketplace platform built. While the first one is custom development from scratch, which again isn\u2019t a viable option for people with less technical knowledge, the second is readymade solutions that are either available at a one-time payment or as a SaaS (recurrent costs).<\/span><\/p>\n

Solution: <\/b>If you require full-fledged control over the marketplace and want to be free from the terms and conditions of the SaaS provider, you should opt for a <\/span>readymade whitelabel solution<\/span><\/a>. They are often available as fully customizable and have all basic features to launch your marketplace.<\/span><\/p>\n

How do you know you can trust them? <\/i><\/b><\/h6>\n

Check reviews on websites like Trustpilot, Digital and PCMag. You can also find reliable reviews on YouTube.\u00a0 <\/span><\/p>\n

4. Defining Custom Functionality<\/strong><\/h3>\n

The Challenge:<\/b> Limited capital puts a cap on the customization of the most prominent and unique features on a marketplace. This is where entrepreneurs also struggle as unique customizations aren\u2019t usually cheap. Even after hours of logic defining, coding and testing, the features can require redevelopment, which ramps up the cost. Thus, entrepreneurs face indecisiveness while selecting the added functionality they require in the end-product. <\/span><\/p>\n

Solution: <\/b>A simple solution to this challenge is to reach out to a subject-matter expert, which can be a web development company with experience in crafting eCommerce solutions. Although most of these companies will agree to provide you a rough cost estimate (considering you to be a valuable lead that can convert in future), others might charge you a consultation fee, which will still be safer than spending your resources impulsively on less essential features. <\/span><\/p>\n

5. Ascertaining The Ideal Pricing Model <\/strong><\/h3>\n

The Challenge:<\/b> There is always going to be an ebb and flow between the demand and supply in a marketplace. Moreover, the external economic forces can easily disrupt the whole demand and supply chain. That\u2019s why there\u2019s a special need to have a pricing mechanism that takes different factors into consideration. <\/span><\/p>\n

Solution:\u00a0<\/b>The three most prevalent ways to provide contingent pricing are as follows:<\/span><\/p>\n