Tough Times? Rent, Don't Buy, with Erento

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But no other company has attempted to create an online rental marketplace that draws suppliers from so many areas, says Möller. Marc Samwer of European Founder Fund, which probed the market before investing, agrees that erento's approach is unique. "There is no other company in the U.S. or the [European Union] with a liquid marketplace of this kind," he says.

Here's how it works: Rental suppliers upload their items, including an image, item description, and price for the rental duration. Renters then search and find their desired items according to location and price. The location is a key differentiator because rental items need to be picked up or delivered, as well as returned, but it's often difficult to determine where a rental company or its goods are based.

What Erento Charges

Once prospective renters find what they need, they specify how long they want the item and fill in their contact details. The rental supplier contacts the prospective client directly to close the deal, then confirms the transaction on erento. Erento charges a display fee of 69¢ per item and takes a 4.9% cut of the rental price of any item procured through its site. The company turned a profit from 2004 to 2006, says Möller. Erento, which does not make its revenue public, is now in an expansion period, but expects to be profitable again by 2009, he says.

What's striking, says Möller, is that people have started renting a much wider range of products and services than in the past. While some might wonder what woman would rent out her wedding dress, it makes financial sense to certain people. "A woman might be able to afford to buy a wedding dress that costs €2,000 but rent one worth €10,000," says Möller. Some women also are realizing that renting is a way to maintain a fashionable and expensive wardrobe. That's why erento, which already handles designer handbags, is about to add cocktail dresses and jewelry.

European attitudes about cars also have evolved. Five years ago, somebody who wanted a convertible would buy one. But now more people are concluding that they really need a convertible only when the weather is good and they can drive with the top down, Möller says. Ford (F) Mustang rentals in Europe have tripled in the past year, while convertible rentals are up 120%, Ferrari rentals are up 102%, and motorbike rentals are up 85%, erento says.

While originally intended to bring rental businesses and customers together under one roof, erento now enables anyone to become a rental supplier. One parent recently earned €150 for renting out a high-end baby carriage to a TV production crew for a week. That's a novel way to deal with tough economic times.

Schenker is a BusinessWeek correspondent in Paris.