Co-locating the nonprofit APRO convention with one specific buying group is considered divisive by some at a time when most observers feel the industry must remain united.

Editorial by Roy Griffaw, Publisher of RTO Online and RTO Magazine.

On Thursday, May 29, by a vote of 7-3, ten members of the Association of Progressive Rental Organizations (APRO) Board of Directors approved a verbal plan to 'co-locate' the nonprofit association's convention with the TRIB/AVB buying show. Although there are currently 18 APRO board members, eight were not on the conference call when the vote occurred. (According to APRO by-laws, ten votes is the minimum number required for a quorum.) Despite the fact that a majority of APRO board members either did not vote for the merger, or voted against the merger, it appears APRO is set to 'co-locate' its annual convention starting next year.

The negotiations and ensuing decision, first reported by RTO Online in April (see story) underscore a long-standing overlap in leadership between nonprofit APRO and TRIB/AVB. According to opponents of the move, this merger will have far-reaching consequences in both the reality and also the perception of APRO as an inclusive, independent entity charged with fairly and equitably representing the interests of the entire Rent-to-Own industry.

Proponents of the merger say APRO had little choice but to 'co-locate' its annual convention due to declining attendance and increasing costs to both members and vendors alike. According to APRO officials, desirable venues like Las Vegas are no longer within the Association's budget. The choice, said one member, came down to, "Do you want to have a convention in Louisville, or Las Vegas?"

In justifying its reasoning, APRO also cited the increase in the number of tradeshows attended by vendors as a reason to merge conventions. The cost to vendors, they say, will be lowered by merging events with TRIB/AVB. However, the new plan calls for a separate APRO tradeshow floor at the TRIB/AVB show in 2009. Since this space will only be visited by APRO members - and will presumably be paid for by vendors - the exact level of savings is unclear at this time.

The co-location plan is a victory for TRIB/AVB who has been lobbying APRO for an outright merger of the two groups for some time, offering financial and other incentives in exchange for joining forces. One of the issues APRO board members had to consider when casting their vote was TRIB/AVB's plan to add a second annual tradeshow. If the buying group added a second show, this could have reduced dealers' open-to-buy at the APRO tradeshow and forced vendors to question the expenditure of attending the APRO show at all. Some APRO members interviewed for this story called the TRIB/AVB tactic "arm twisting" while others lauded the ploy as "simple hard ball."

RentDirect Nationwide, a direct competitor of TRIB/AVB, has taken the position that APRO's stated mission is to further the industry's legislative interests and therefore APRO should remain independent of any buying group. RentDirect Nationwide has been a major supporter of APRO both financially and also through the re-energizing of many state RTO associations. The buying group has reportedly spent more than $500,000 in the past 36 months supporting APRO and state rental groups. It is unknown how much TRIB/AVB has spent on similar efforts.

On a national level, RentDirect Nationwide's efforts to unite the industry through various events have allowed APRO to recruit additional Association members. On a state level, RentDirect Nationwide has assumed full financial responsibility for many state rental association activities. The announcement by APRO of the plan to 'co-locate' with TRIB/AVB may cause RentDirect and other groups to question the wisdom of continuing to provide such generous levels of financial support.

It is traditional for state associations to support APRO by promoting the Association's annual convention to their membership. An APRO representative also attends each state convention to provide a legislative update and promote Association activities. Will RentDirect Nationwide continue to provide funding for meetings where its competitor's buying show receives free publicity and the endorsement of the only national RTO trade association? Nationwide Marketing Group refused to comment for this article but said a statement may be forthcoming early this week.

'Co-locating' the nonprofit APRO convention with one specific buying group is considered divisive by some at a time when most observers feel the industry must remain united. Even if the final decision is to alternate years, for example, meeting with RentDirect Nationwide one year and TRIB/AVB the next - or as some have suggested, allowing RentDirect Nationwide to host APRO's mid-year conference - it puts some vendors and members in a difficult situation.

The concerns being voiced by those opposing a merger of APRO with any group include a fear that APRO will become "exclusive" rather than "inclusive" and a feeling that APRO may lose its independence. By supporting one group over another, the trade association has, in the words of multiple sources involved in the negotiations, taken a leap onto a slippery slope that may well have unintended consequences.

Loss of Independence?
In a statement issued by APRO, the association cited "economic concerns" as one reason for the merger. APRO reassured members in the statement that the association would remain independent. But the fact that the trade association feels it must combine its convention with another group to survive, regardless of who that group is, leaves many wondering what exactly APRO leadership means when it says 'independent'.

Consider this: APRO spends a full year or more promoting its convention. If the convention is held in conjunction with the TRIB/AVB show, it is impossible to market one group or show without promoting the other. While this obviously benefits the current "co-location partner", any group or vendor that competes with that partner is put in the impossible position of actively supporting a competitor in order to support the industry's only trade association. Even if the association co-locates with other groups in alternating years, there will always be an odd-man-out – one or more groups that are unable to actively participate in trade association activities without having to promote a competitor.

Other details yet to be worked out include pricing at a TRIB/AVB/APRO tradeshow. APRO states that members will be able to buy from both show floors, but will APRO members get TRIB pricing and/or rebates? If the convention is eventually held at Nationwide PrimeTime! will attendees get RentDirect pricing and rebates? And if so, what is the motivation to join TRIB or RentDirect and pay dues? APRO plans a vendor conference call later today to answer these and other questions.

A Second Association?
The alliance between TRIB/AVB and APRO has rekindled talk among industry leaders of creating a second trade association whose sole purpose is to oversee federal and state RTO legislation. Some industry veterans question the wisdom of having APRO as a single trade association representing an industry with such widely varying interests. For instance, the industry's largest players, Rent-A-Center and Aaron's, the primary drivers of the federal legislative effort, have nothing to gain by APRO's alliance with a buying group. They belong to APRO in order to strengthen the industry's legislative stance and not to negotiate lower prices on merchandise. These two companies care very much if the Association begins losing focus and using resources on non-core issues. If by forging an alliance with one buying group APRO has weakened its stance as an independent grassroots entity fairly representing the interests of everyone involved, will the Association's two largest members feel APRO no longer represents their companies' best interests? It's fair to speculate - after all - it's happened before.

In 2004, Rent-A-Center and Rent Way simultaneously resigned from APRO (see story), effectively cutting the Association's budget in half. In order to maintain its other association activities, APRO essentially eliminated its legislative budget. As a result, Rent-A-Center, Rent Way and several other RTO companies founded the Coalition for Fair Rental Regulations. The group's only goal was to provide support for federal RTO legislation. Dues collected were spent solely for that purpose. While small in numbers, many believe the group was effective, garnering support from key legislators during conferences in Washington D.C. Rent-A-Center has since re-joined APRO.

Antitrust
Trade associations are by their very definition anti-competitive. A trade association is nothing but competitors working together toward a common goal. This is an accepted and perfectly ethical practice so long as trade association activities do not create an unfair advantage for one group over another. Antitrust laws are in place to prevent associations from engaging in unfair trade practices. This is not to suggest that what APRO has done constitutes an antitrust violation, but certainly whenever a nonprofit trade association engages in any activity that gives an unfair advantage to one competitor over another, concerns of this type may be raised. Those concerns may be more glaring when so much cross-over exists between the current and past leadership of APRO and TRIB/AVB.

What About the Independent Dealers?
Membership in a buying group benefits independent rental dealers most of all. Buying groups afford small and mid-sized rental companies the ability to purchase merchandise at discounted rates, just like the major rental companies can. Buying groups typically also offer services and programs geared to helping the independent dealer compete on a level playing field with much larger companies with much deeper resources. How does this move affect them?

If an independent dealer belongs to a buying group whose show is not 'co-located' with the APRO show, then presumably there is no cost or time savings to that dealer. The dealer will still need to travel to both groups' shows.

If that dealer is a member of the buying group whose show is 'co-located' with the APRO show, that dealer may in fact save himself a trip by attending the combined show. But, how will that dealer ever benefit from the lower prices, higher rebates, and improved services that buying groups offer when they have to compete for his business? Competition is a good thing and any benefit derived from it will dissolve if a buying group has a captive audience delivered to it by the national trade Association.

Finally, should APRO decide to alternate 'co-location' years with competing buying groups, will dealers feel pressured to ping-pong from one buying group to the other each year, just to take advantage of the 'co-location' benefit? And will each buying group be forced to promote the other's show just to participate in APRO events?

APRO's Mission
According to APRO, its primary mission is to secure the passage of federal legislation. The group currently represents approximately 375 companies out of an estimated 3,000+ that report Rent to Own revenue in the United States. If the only way to maintain Association membership at current levels is to host a buying show in connection with its annual convention, does that bring into doubt the support of the group's primary mission by the industry as a whole? In other words, why isn't the goal of securing the passage of federal RTO legislation enough to grow the Association's membership?

If the passage of federal RTO legislation the mission, then why isn't the annual convention held in Washington D.C.? Why continue the squabbling over things that have nothing whatsoever to do with legislation? Why not leave the competing buying groups to do what they do best and use Association resources for what they were originally intended?

The need for a viable, strong national trade association is clear. However, insiders say that the Association must change and, more importantly, must decide who it is and what it is uniquely qualified to deliver to its membership. Does APRO aspire to be a buying group, or does it wish to remain a nonprofit, all-inclusive, independent organization that never closes a door to anyone interested in the growth and long term success of the RTO industry and its 50,000 professionals?

Rental merchandise can be purchased at a discount from just about anywhere.

The feeling of community that our industry has earned from a strong network of dealers cannot.

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