The Power of The Network Effect

The Power of The Network Effect A look into what Network Effect businesses are and how they are successful The idea that the innovation within a single product cannot make up the value of a network has been around for a long time. In fact, the idea was conceptualized in 1908 by Theodore Vail, the Chairman of AT&T. Vail noted in AT&T's 1908 Annual Report that "A telephone - without a connection at the other end of the line - is not even a toy or scientific instrument. It is one of the most useless things in the world. Its value depends on the connection with the other telephone - and increases with the number of connections."
Now in the world of digital, seeking out businesses that can successfully harness the power of the network effect has been the holy grail for investors.
In the past 10 years, the number of network effect marketplaces worth more than $1 billion - marketplaces enabling both buyers and sellers to mutually benefit from increases in usage on both…

Featured Supplier: RWCI Inc. Equipment Sales

Featured Supplier: RWCI Inc. Equipment Sales
10 Industrial Park
Flora, IL 62839

RWCI has been selling quality equipment and parts for over a decade. In 2008, the company moved into a 30,000 square foot facility where they feature a state-of-the-art paint booth and interior sandblasting on 14 acres of land. Jim Bindon took the helm in 2013 and increased the standards of repairs and introduced "Certified" used equipment as a great option for dealers and users.

Certified used is a much better option than the standard "as-is, where-is" used, while not being cost-prohibitive like a full recondition. Here is how RWCI describes it on their website:

Certified Used Process:

Step 1: Wash Bay A machine that looks clean doesn't necessarily mean it is clean. Several hours in our Wash Bay guarantees a thorough degreasing and cleaning - every inch and weld seam - to remove built-up grease, oils, dirt, concrete, fertilizer, and everything else you can imagine. 190-degree steam …

Review of the "Eight Axioms for Used Equipment Management Success"

Review of the "Eight Axioms for Used Equipment Management Success"
On page 119 of Walter J. McDonald's book, Achieving Excellence in Dealer/Distributor Performance: How to Increase Profitability, Cash Flow, Market Share and Customer Retention, Walter writes about how dealers and distributors suppliers should think about their used equipment sales. Let's break down all eight:

1. You Must Buy it Right
Make rational business decisions based on reality, especially for appraisals and setting wholesale valuations. 

This is a self-evident axiom. Everyone knows in real estate that it's all about the timing you purchase a property. That counts just as much as the upside location of the area it's in. Over time, if you have negotiated a good deal on the property and the area is generally getting better, you are almost guaranteed to profit from the sale unless the economy happens to be in a fast decline.

The "buy it right" idea in equipment is the same as real es… An Easier Rental Experience in Chicago

Image An Easier Rental Experience in Chicago is offering online equipment rental in the Chicago, IL area starting in September 2018. We aim to save users a dramatic amount of time in researching and booking their equipment rental needs and help them manage rentals better with our dashboard tools.

We are launching rental in Chicago (equipment and parts sales nationwide) because it is my beloved hometown and a great construction market.

If you're in the Chicagoland area, please reach out! We look forward to serving you.

The value of to Chicagoan equipment renters can be best stated in a visual:

Luke Powers Founder & President,

Review of "The Modern Marketing Mix" by Neil M. Brown

Review of "The Modern Marketing Mix" by Neil M. Brown

Page 11 in Tools of the Trade: Modern Marketing for Construction Brands, author Neil Brown describes "The Modern Marketing Mix" for construction companies. Neil and his team make an important find:

... traditional marketing tactics like advertising and trade shows are expensive, and are being cut back and often replaced with less expensive tactics such as Internet and social media. This trend is reinforced by annual outlook surveys from the American Marketing Association, BtoB magazine and the Construction Marketing Association 2011 Outlook survey identifies budgets increasing for Internet, social media and publicity, and declining for advertising, printing and tradeshows. (Underline added for emphasis)

Here are their findings from the 2011 Outlook marketing survey which polled construction brands marketing strategies:

Internet category
97.4% are increasing spend

Social Media category
95.8% are increasing spend


Featured Supplier: Partner Equipment

Featured Supplier: Partner Equipment
711 E Chester St Kingston NY, 12401
Partner Equipment & Partner Rentals are the latest companies that the del Aguila family has owned and operated to serve contractors and homeowners in New York's Hudson Valley. In 1992, the del Aguila family opened Kingston General Rental which became Best General which became Volvo Rents. In 2011, the family sold the business to a national rental company.
After successful positions with BlueLine Rental, Hernan and Ernesto del Aguila, the sons of the founder, introduced Partner Rentals back in their hometown of Kingston in 2016. Although they are a 2-year-old company according to the NY business record, local customers have trusted them for over 25 years. The del Aguila's are continuing their tradition of excellence and created another company called Partner Equipment to focus on equipment sales.
Hernan also has an information technology company dedicated to helping equipment rental companies get smart…

Featured Supplier: Construction Equipment Rentals Inc. (CER)

Featured Supplier: Construction Equipment Rentals Inc. (CER)
2229 Plainfield Pike
Johnston, RI 02919

Construction Equipment Rentals is a strong independent equipment rental company in Rhode Island. The owner, Rick Raposo, has a commercial drywalling company where he has rented machines for many years before CER. Rick knows well how rental customers want to be treated as he is one! He opened CER in 2011 and they have been growing ever since. 

Mike Travis is CER's General Manager. Mike is a Marine veteran who takes great pride in his work and his staff. CER strives to exceed expectations on every rental, safety training, or sale they are involved in. They take the time to listen to every vendor and customer that comes to them and relentlessly promote their brand. is proud to feature CER as one of our first suppliers. I have known Mike for a couple years and he has always been excellent to work with. We think you will like them as much as we do!

Luke Powers Founder & Pres…

Equipment & Parts Suppliers: Entering the Digital World

Equipment & Parts Suppliers: Entering the Digital World

The construction equipment industry today features the most amazing engineering designs in history. It is now possible for an atrium lift to reach 156' platform height, yet compact enough to fit through a standard double-door (see footnote link on the Teupen TL156AX)! Because of these incredible engineers, our machines are doing much more work while featuring comfortable cabs with heat, A/C, and Bluetooth radio for operators. In the physical world of machines, the construction industry has seen great progress over the last 20 years. 

However, during that same time frame, other industries have been transformed by the instant, perfect, and free internet. Mobile information technology is the main way we shop for any retail item, listen to music, hail a ride, research cars for sale, book dinner reservations, book an airline ticket, book a car rental, and book a hotel room. In this digital world, construction equipment and parts…

Transaction Costs of Equipment Rental

Transaction Costs of Equipment Rental

Contractors who regularly rent equipment (at least once per quarter) usually "have a guy" they rent from. When asked why they rent from that company, they respond that their "guy" has been getting them their rentals for years, knows what they want, and does it according to their process. This has been the way the equipment rental industry has operated for at least a century. Why is it structured like this when we can easily rent hotels and cars online? 

The answer is transaction costs. The Business Dictionary's definition of Transaction Cost:

Economics: The cost associated with exchange of goods or services and incurred in overcoming market imperfections. Transaction costs cover a wide range: communication charges, legal fees, informational cost of finding the price, quality, and durability, etc., and may also include transportation costs. Transaction costs are a critical factor in deciding whether to make a product or buy it.…

Simplifying Equipment Rental

Simplifying Equipment Rental:
When was the last time you checked equipment rental rates in your market? If it’s everytime you rent - how much time does it take you to do so? If you haven’t checked pricing in a while - do you think you’re getting the most value from your current supplier?
Homeowners, contractors, and maintenance professionals are busy doing what they need to get done. So constantly checking on pricing is a hassle many do not want to deal with. Besides, even if you do bid out your rental and get a lower rate from an unknown supplier, you run the risk of getting a poor unit and poor customer service. This is why most equipment renters tend to stick with the same provider.
Now think about the last time you booked a rental car or hotel room - how did you do it?
You likely booked on a platform such as Expedia, Priceline, Airbnb, or These platforms compare car and hotel options instantly instead of searching each provider’s website individually which saved you a gr…