Start a Party Rental Business

People are spending more and more on their children’s party. You can profit from this. Parents need someone to haul in the inflatable jumping things and set up tables, chairs … Another rental market is business promotion.  Stores that are having a sale need to attract families with kids, and there is always the company picnics.

Rent Jumpers and other supplies for store Promotions

Smart businesses will rent jumpers for promotions–It attracts their target customers.  Photo of BlockBuster Store in Huntington Beach.  (cc) OCBusinessStartup.com

People are getting into this business because basically all you need for your job is a pick-up and a place to store the inflatables, tables chairs, extension cords…  Or you could spend a lot of money on one of the new franchise concepts below.   As it turns out, the low start up cost a good thing and a bad thing.  A lot of people have gotten into the business and there is a lot of competition.  People shop for the jumper by price, size and style.  And you might have to compete in price with people who do not pay for insurance.  A lot of these are mom-and-pop operations because it’s a only a two person gig.  And if a business has to pay for state disability insurance, payroll tax, workers comp… those costs must be passed on to the customer.  But as owners of a business, you can just pay taxes on your profits and don’t have to pay for all the burdens California and the Federal governments put on employers.

California’s litigation burden on Small Businesses  Insurance  If you were pumped-up about this opportunity, sorry to deflate your mood.  One of your biggest expenses will be insurance, and California is i high insurance cost state.  There is one more thing that you will need to get started:  liability insurance. Kids will be kids, and at some point kids will be injured.  And in California, the child’s injury is some how connected with your business–it’s your fault.  So before you start looking at inflatables, you might want to start asking for insurance quotes.  Unlike car insurance, there these companies have no obligation to insure you; and your rates could be based on factors such as your credit history, your claims history on other insurance products, and if you have tried to cash in by suing people in the past (slip and fall money).  Romer has it that even if you never went to court, insurance co’s have a record.  The insurance companies will supply you with a list of rules — no fun stuff, limits on the number of people in the bouncy, no back flips…  And they will supply you with a rental agreement or liability release that people must sign before they bounce.  We have made a list of insurance companies in no particular order, we honestly don’t know which are the best.

www.funproins.com   www.inflatableinsurance.com   Insurance through the Event Planners Association.    

Asset Protection  If you have any assets — a house, IRA, savings, you or your spouse have income from a job/business, you should consider forming a corporation or LLC to protect your assets.  That’s because there are limits to the amount of insurance you can buy, and California is known as a state with high payouts  for litigation.  When children are injured in your care, there are no accidents; it’s your fault.  The best place for info on this topic arre books from Nolo press, we have an outline of different types of business organizations and links to some interesting books here.  

Party Rental Add Ons

While some parents might just want to rent the jumper, there is also money to be made by renting other stuff for the party.  And the profit on the other stuff will be as high if not higher than the profit on the main attraction–the jumper.  You might charge a buck to set up a chair, a few bucks for a table, ten bucks for a awning…  Generally, people don’t have tables, chairs, popcorn makers, helium tanks for balloons  big BBQ’s, snow cone machines… sitting around in their garage.  Some businesses make it easy for customers by selling “party packages.”  For example, It only costs $X for the jumper if you buy our party package which inclus a shade covering, ballones, four tables and 24 chairs…”

The best time to buy these things is near the end of summer when home improvement stores like lows are trying to get rid of them.  Another good place to buy is at CostCo.   We also like their nicer chairs .  And while a lot of parents will want to spend the day picking stuff out at Party City, others will not.  You can supply these things.  You can find party supplies wholesale.

  • K & A Party Supply and Flowers LA based outlet supplies themed party supplies (A reader said they had closed) They only have a $50 minimum, and they take credit cards.  And it looks like they have an actual store front in the “wholesale district” of LA so if you are ordering a lot you can pick up yourself. 
  • You can find great deals on cakes at Costco and Sam’s Club.  Just present your clients with photos from their website.  These stores sell the sheet cake as a loss leader to get people in the doors.
  • Beistle http://www.beistle.com/WholesaleCentralCatalogForm.aspx  This is a company that runs it’s own party business, and supplies party stores.  They have a lot of inventory for those who want to sell theme party packages.  You need to sign up for their wholesale catalog to see the deals.  They also have Halloween items, birthday candles and a lot more–tons of stuff.   

 

So where do you buy Jumpers and Jump Hoses ??

Well, your jump house collection will be what makes or breaks your business.  We have found some local suppliers, and some ways to import the jumppers from China.  As with a lot of industries, most of the actual manufacturing is now done overseas.

EInflatables www.einflatables.com This is a local company out of Santa Fe Springs.  The nice thing about this company is that they put up all of their new products on their youtube channel   They have nice selection of bigger units, and units that are designed for bigger kids and adults.  Including zip lines and inflatables with water.

Happy Jump http://www.happyjump.com  This company is based out of Burbank.  We don’t know if they have a local distribution center, or if their products are drop shipped form other manufacturers.

Magic Jump is a family owned, Sun Valley company that manufactures and sells local.  While most of the industry has moved off shore, they still manufacture in the USA and sell to people getting in the party rental business.  They can also customize your jumper to your specifications.  If you need something custom, it will be easier to deal with someone speaking English a few miles away, than a company across the ocean.  See this video about their production

Inflatables 2000 www.inflatable2000.com in AZUSA

Ninja Jump sells them out of Las Angeles.  http://www.ninjajump.com/avm.php  http://www.ninjajump.com .

A second company out of Ventura is called Jolly Jumps jollyjumps.com Looks like they just do rentals now, but they do sell off their used inventory.

Import Jumpers Directly.  An alternative is to import inflatable bounce houses directly from the supplier. There seems to be a whole industry in Guangdong & Henan, China that has has sprung up to meet the world’s demand for inflatable products for children.   As with many other goods, they are made in China where labor is less expensive, and fabricators don’t have to worry so much about class action lawsuits.  Most companies will sell you a single unit; and can even customize the unit to what you need.  But ordering directly from the manufacturar is not like ordering something on Amazon.  There will be a delay before your can get your product and pay for shipping.  The most economical way to ship is by sea, and that takes a while.  You can find a list of suppliers on the international B2B website alibaba.com. www.alibaba.com/showroom/wholesale-party-rental-equipment.html  And so,me of the prices are amazing.  You can get a 15foot by 21foot bouncy castle for $400-600.  (We assume that’s the starting price.)  But there is no Buy it Now button.  You have to specify what you want, and negotiate a price with the company’s representative.  The best way to communicate is through e-mails as some reps may have a bit of an accent and there is a time difference.   We did an interview with one company who was eager to sell to people getting into the party rentals business.

Interview with Susan Wu of the ZHENGZHOU WINSUN AMUSEMENT EQUIPMENT CO.

Background A reader had asked if they could bypass the local suppliers and buy directly from a local manufacturer in China, since that’s where most of the world’s commercial inflatable products are now being made.  We located this company on the internet and noticed that they have a big selection of bouncies and their prices seemed to be really good.  So we interviewed them to see how easy it is to buy directly from china.

Q: Tell us about your company

The Zhengzhou Winsun Amusement Equipment Company has specialized in making commercial inflatable products for more than 15 years.  We produce more than 1,200 kinds of items in our company.  No matter the material you select, design, craftsmanship, and service, we are always the top one in this field.

Q: Do you have any retailers in Southern California where buyers could see your products?

A: We don’t have (own) any retail outlets in Southern California.

Q:  In addition to the Alibaba.com site, does your company have a website that shows your products?  Do you have an English speaking representative customers could talk to over the phone?

A: 2. Our Alibaba website is http://zzwinsun.en.alibaba.com/ , our company website is http://www.zzwinsun.com welcome to visit . And you may call us at 0086-371-66826735 for something urgent, most of our representatives speak English.  (See Editor’s note 1 below.)

 Q:  Would it be possible for you to put the customer’s business name and phone number on the bounce?

A: Your company’s logo, name, telephone number, etc. , which can be printed on our inflatable products.

Q: Are your bouncies certified in any way?   We have heard complaints that some plastics might not be safe.  Is your material considered safe?

A: All of our products have been approved for a CE certificate; and all the products designs are put through safety tests.  We use the most durable material.  Further more, a professional Quality Control team ensures we are shipping safe products.

 Q: Does your company accept credit cards?  Alibaba.com has an escrow service, is that available for people buying from your company?

A: Normally, we always suggest the customer make payment through T/T(bank transfer), which is the most convenient way to pay and saves the customer money because bank transfer fees are less expensive than other forms of payment.  (You can also pay via Alibaba’s Escrow service http://www.alibaba.com/escrow/buyer.html This works like Pay-Pal.  The business does not get paid until you receive your products.  But there are fees involved.)

Q: Can a bouncy be shipped directly to a customer’s house or business in the United States?  Will the customer have to fill out paperwork with the US Customs Service?  About how long will it take for a product to be made and shipped to the customer in the United States?  If possible, could you give a rough estimate of the cost to send your product to California?

A: We can ship the goods to you by sea, by air and by express company (DHL,FedEx, TNT,,,) . Also the shipping company can delivery the goods to your door directly. The costs depend on your location and how fast you need the product.  The shipping company handles the paperwork with the US Customs Service, but Mrs. Wu suggests that you work with a customs agent to handle customs, rather than having the shipping company do the work, because that will save money.

Q: Is there a warranty or guarantee on your products?  Do you supply a repair kit for small holes?

A: .All our products include the repair kits, and come with a three-year warranty.

Susan, thank your for taking the time to answer these questions.  I am sure the OCBusinessStartUp readers will appreciate a way to get into the Party Rentals business for less money.  It’s clear that you work with a lot of independent businesses in the United States and know how to save them money.

 

Used Commercial Inflatables  We noticed a bunch of used inflatables on e-bay.  Some of them were worn out, but if you are just getting in the business, it might be a good way to start.  The key words you want to use are “commercial inflatables”  They also have companies selling new imported products.

Check out the Trade Show before you buy  Twice a year the inflatable industry has a trade show in North America.  This is a great way to shop around, and it’s a legit tax deduction. And they also have educational seminars that teach you about the business Inflatable Air Show  If possible, you want to hit up a show in the South West because local vendors from our area will be at the show.

Basic features you will want to look for when buying a bouncy:

You may be investing thousands of dollars in these products, so these are some factors to consider before buying.

CE  This certifies that a product meets the requirements to be sold in Europe. This certification is not required in the United States, but it does indicate that the product meets some safety standards set forth by the European Community for this type of product. But be careful, there is another symbol that looks almost the same called the China Export symbol. The China Export Mark means that the product has been manufactured in China for export. It’s very hard to tell the marks apart. You may want to ask if the product meets the standards to be sold in Europe. See this Wikipedia article http://en.wikipedia.org/wiki/CE_marking for more info.

UL Underwriters Laboratory UL.com. This is a private organization that certifies products as safe in the United States. If you see the UL on the product, that means that the manufacturer claims that the product has passed inspection by this organization. The symbol is a UL in a Circle, not to be confused with the Union Label. UL website UL.com. Only manufacturers who have meet their requirements can use the UL label, you can check to see if the manufacturer has authorization to use the label from UL here: http://www.ul.com/global/eng/pages/offerings/perspectives/manufacturer/authorizedlabelsuppliers/

EN71 Certificate This indicates that the product meets European safety standards with regard to such factors as chemicals and sharp edges.

Thickness of Material The thickness of the material is measured in mils or mm which is an abbreviation for millimeters. That’s 1/1000 of a meter. For instance, a trash bag might be 1.5 – 3 mil. That’s way to thin for a bouncy that will last for years. The thicker the material, the more tough it will be, but it will be more heavy and harder to inflate. This is one factor to consider.

Stitching, areas where the material is put together may be have double-stitching or re-enforce stitching. This indicates a higher quality. The stitching is sealed by matching material .  

Party Rental Franchises

As with every business we cover, it seems like people have found a way to franchise the idea.  The advantage of a franchise is that you get training and a connection with suppliers.  But the main thing  a franchise can offer is marketing and creditably with potential customers.  That’s why people pay a lot more money for a McDonald’s Franchise than it would cost to rent space and set up a burger stand themselves.  You have to look at what it would cost to start your own business–including advertising costs–and compare that with the convience of the turn key set up of a franchise, and the marketing skills they bring to the table.   They all sell the dream of becoming an instant executive in a dynamic business, but there is no way around it.  Unless you are doing this as a hobby and can hire employees, it’s a lot of work–whether or not you have a franchise.  It seem like in this industry, there are a lot of independent operations.  We didn’t find any franchise opportunities for businesses that set up for parties at peoples homes, but we did find operators who set up permanent locations.

Franchises:

The idea is that you rent some un-used space with high ceilings and set up your own version of Chucky Cheese.  Lower rent warehouse or industrial space works well assuming it’s not in a bad part of town.  Parking and permits might be an issue.   But with California’s high rents and California’s high liability costs it might not be feasible.  Insurance costs are so high in California, that it would be unlikely that you could charge a reasonable price.  You need to have a liquid worth of more than $100,000 to get started.

We found some opening up in unused industrial buildings in Huntington Beach and Anaheim.  These are the national franchise opportunities we found.

  • BounceU  This is a franchise opportunity to open up a facility.  The require at least $100,000 in liquid assets.
  • Jump Zone  They claim on their website that the cost of a Jump Zone Franchise is less then other franchise.  It only costs $30,000 for the initial fee and a flat royalty of $1,200/month.  They claim that their program will save you 50-70% every month on franchise fees.  Just to be clear, this is the cost of the franchise.  It does not include equipment.  They have deals with vendors that allow you to get a good price on equipment.
  • Pump it Up  They require $100,000 in liquid assets and $500,000 in total net worth.  The initial franchise fee is $40,000 and they estimate that the franchise will cost $300,000 to $650,000 in total.  They charge 8% of gross income in additional fees.  This is for a big operation and includes renting retail space.  The best way to get into the business may be to buy an existing franchise.  The big expenses have already been paid and they have a financial track record.  Pump It Up has a Franchise resell page.

 Video Game Trailers

The new trend back east.  It’s only time before you see them in California.  It’s a simple concept.  Kids love video games.  You drive up in with a eye-catching trailer with a couch along one side and a bunch of TV’s and video games on the other side.   A game councilor gets the kids going.  In our uninformed opinion, the drawbacks are (1) that the size of the party has to be limited, (2) these games are costly, and (3) many parents feel that their kids spent too much time playing games.  Convincing them to pay for what their kids are doing all the time for free might be a hard sell.  (4) Parking the trailer (5) insurance (6) expectations — it’s your fault if the party is not a success (7) equipment depreciation–the kids will expect the newest games on the newest systems.  On the other hand, hiring a big trailer to come out lets all your neighbors know you spent a lot of money on the party.  This seems to be aimed at younger kids, so you might not have to have the latest and greatest games.  It isn’t just for boys, girl parties involve mak up/hair along with dancing games on systems like the Wi.  Another service these companies offer is an outside movie viewing experience.

You are the facilitator who helps the kids play the games and have fun.  If you can’t stand kids or can’t make it to level 3 of any game, or don’t have a lot of money to put down, this might not be the business for you.

Parents will pay $300+ for a two hour party, wich will take you at least four hours when you consider driving and set up.  And you can charge more for bringing a cake…

The advantage of going with a franchis seems to be that they have the video game trailers ready to go, and when they move into Souther California they will be driving customers to your service.  But before you put a second mortgage on your house, consider the risk.  There are a lot of these services popping up, and parents will shop around for the lowest price.  So there may be limited upside to paying a franchise fee.  Also, Video Games, trailers, 47″ TV’s, and vehicle wrapping are not exactly exclusive technology.  It behooves you to price the cost of building or buying a used trailer before paying the franchise fees.

Games to Go www.g2u.com, one of the best know franchises, states that you can get into the business for as low as $58,000.  We believe this covers the $35,000 franchise fee.  And there is an undisclosed monthly royalty on top of that, and you also have to pay licensing fees to pay for “movie rights.” he exclusive franchise entitles you to an exclusive territory consisting with at least 150,000 residents.  But the problem is that a lot of other companies are doing basically the same thing.  So your exclusive franchise might not mean enough as parents generally dont understand gams and hence have no brand loyalty.

Since it’s not all that complicated to hook up a bunch of TV sets to video gams in a trailer, several other companies have started selling basically the same thing.  Rolling Video Games

Games on Weelz — They also do Lazer Tag with inflatable obstacles, outdoor movies and are franchising in Orange County According to their website, there is a  $30,000 Franchise Fee/6% royalty.  They have a wide range of trailers and equipment to choose from.  They even have a trailer for girls with a beauty shop chair in the trailer.

Game Kart Party

Editor’s Note 1.  Sometimes when communicating with people from alibaba you have to understand that they do speak English, it’s just different than the English we speak.  If you are sending e-mails or text messages, avoid unnecessary words and keep your sentences short.  They may be using a translation program.  These programs don’t work well with complex sentences.   BAD I would like to inquire as to the availability of your  large  furry stuffed animal you have pictured on page three of your on line catalog, but I need it in a different color perhaps blue.  Not so Bad I want to buy product 3256.  Can you make it in blue?

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