Have a concept for a business and I was hoping to get some input on some possible solutions of a problem I encountered.
The idea would be a leasing business of widgets.
Customers who use this widget signup to a leasing contract for 2-3 years. So if they have 50 widgets in their inventory, they pay $1/widget per month. So $50/mo.
The cost for a new widget for us is $12. The cost for the customer to buy one retail is $30.
The idea is that we would provide a maintenance service on these widgets. We would have replacement widgets on standby to minimize turnaround cost. The customer could ship us a widget and we will exchange them a new widget (either new or previously refurbished).
We'd take their old widget, refurbish it, and then put it in our inventory to dispatch for the next replacement.
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So the challenge now is this:
What are some ways that I can prevent a customer from signing a two year contract with me, replacing all of his widgets over the contract-length, and letting it expire? Then, in five years, when he needs the widgets replaced again, he signs another contract and does it all over again.
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