As a long-term helium customer, you likely pay rent on the cylinder(s) you keep on hand. While it's standard practice within the industry, many people who are new to renting helium are unaware of why this rent is collected. In short, there is a distinction between the contents of the cylinder and the cylinder itself.
Manufacturers produce substances, but have to purchase cylinders to contain these substances. When full helium cylinders are purchased, one must pay the cost of the helium as well as the cost of the cylinder. This enables the manufacturer to recuperate the cost of the steel (or perhaps aluminum) cylinder.
For manufacturer distributors, the up-front cost of the cylinder is waived in lieu of a cylinder rental fee. In other words, the manufacturer still owns the cylinder, but is renting the cylinder to the distributor and only actually selling the helium to the distributor. This is why, in cases of long-term helium rentals, rent is also charged to the distributor's customers. Your provider is paying rent and simply passing this on.
Some may come to the conclusion that cylinder rent, over a certain period of time, may pay the cost of the cylinder. While this may be true, the rental fee must still be collected as it compensates the cylinder's rightful owner for the maintenance costs, as well as cylinder's replacement cost. There are many requirements and inspections required by the US Department of Transportation and OSHA for these cylinders. While the end-customer pays cylinder rent, it is only a small portion of the total cost involved in maintaining a fleet of cylinders.
To avoid paying cylinder rent, people often opt to purchase their own cylinder. This way, they only pay the cost of the contents (helium, CO2, etc.). This may prove to be a cost-efficient option for some, but please do the research before deciding to purchase a cylinder. We're happy to help and answer any questions.
For more information about purchasing cylinders, please see our recent article regarding cylinder ownership and refills.
Written by: Miriam E. Medellin
Manufacturers produce substances, but have to purchase cylinders to contain these substances. When full helium cylinders are purchased, one must pay the cost of the helium as well as the cost of the cylinder. This enables the manufacturer to recuperate the cost of the steel (or perhaps aluminum) cylinder.
For manufacturer distributors, the up-front cost of the cylinder is waived in lieu of a cylinder rental fee. In other words, the manufacturer still owns the cylinder, but is renting the cylinder to the distributor and only actually selling the helium to the distributor. This is why, in cases of long-term helium rentals, rent is also charged to the distributor's customers. Your provider is paying rent and simply passing this on.Some may come to the conclusion that cylinder rent, over a certain period of time, may pay the cost of the cylinder. While this may be true, the rental fee must still be collected as it compensates the cylinder's rightful owner for the maintenance costs, as well as cylinder's replacement cost. There are many requirements and inspections required by the US Department of Transportation and OSHA for these cylinders. While the end-customer pays cylinder rent, it is only a small portion of the total cost involved in maintaining a fleet of cylinders.
To avoid paying cylinder rent, people often opt to purchase their own cylinder. This way, they only pay the cost of the contents (helium, CO2, etc.). This may prove to be a cost-efficient option for some, but please do the research before deciding to purchase a cylinder. We're happy to help and answer any questions.
For more information about purchasing cylinders, please see our recent article regarding cylinder ownership and refills.
Written by: Miriam E. Medellin
Comments
Post a Comment