Equipment rental is a new concept that garnered traction in the last few decades. As the people make a shift from traditional buying to equipment rental, there are significant opportunities that appeared for entrepreneurs to look into. However, one of many umpteen challenges business owners always face is pricing the rental charges for the equipment, and calculating it effectively was another one.
Adding more and more charges and dynamic conditions eventually shape the pricing of equipment, thus, making rental pricing calculation teething trouble for businesses. The manual calculation would not be a wise call here to do when you have a mountain of tasks to complete on time; an automatic calculation tool would be a perfect way to keep everything in your hand. To help you out, we have tried to figure out the issues and techniques on how to address those in this post. In the later part, you would able to determine how to calculate pricing with Reservety effectively.
Here are the Tips to Calculate Equipment Rental Pricing Effectively:
1. Price Based on Time of Rental
The equipment rental pricing is pretty much dependent on the time of rental and their demand at the point when they were rented. It could be hours, weeks, and months. Perhaps, it could be a custom period; customers want to rent. The coolest part is you can even set rental timing in minutes (with Reservety). Look at the Screenshot below!
With Reservety, you can set up equipment or item pricing in minutes, as per your preference. Set hours, days, weeks, or months for specific products or a bundle of products.
Reservety works automatically to calculate pricing for bother physical and online. For online orders, you set up pricing for particular products and variations, and once the customers rent or book a product, the pricing is effortlessly calculated.
Even if you are reserving products in the real calculation, you never have to calculate the prices manually. Feed the information with the POS solution; once the inputs are provided, pricing calculations are done automatically.
2. Adding Extra Charges to Pricing
Whether there are charges on gas mileage, shipping, security deposit, or charging additional cost in case of late hours. You have to be prepared with appropriate fees beforehand and inform your customers about it upfront. That way, your customers remain wary about the potential charges that may incur if they carelessly tamper equipment.
In Reservety, you have the choice to set additional charges at the time of booking. All the cost taxes, deposits, insurance, service fee, and fuel charges are added right away at the time of booking. However, customers always have the choice to pay them either upfront or later. If you’re not sure how to do it, keep it simple and add charges that you feel like giving your customers the ultimate relief. Also, it might not be profitable from your point of view.
Also, in the case of big-ticket customers who choose to rent equipment for an extended period, it is comfortable to offer discounts or a waiver with in-built tools.
3. Setting Price for Limited Occasions
Some times drastically affect the demand for some equipment, and your price tends to go up. Of course, this is the part of an effective business strategy that garners you more profit. But, keeping costs up to date is the biggest challenge. In the case of physical, prices are communicated while in direct interaction with customers. However, if you follow a website rental model, you would require an automation solution to price the item right when the demands go up.
Reservety has the potential to address such problems and eventually allows you to add prices for special occasions such as festivals, holiday season, or a national, international event.
4. Synchronizing Prices with Accounts
When you deal with customers physically, you have to prepare manual documents – invoices, agreements, payback charges, and taxes and then hand over to customers. This could be annoying for the customers. Plus, there could be chances that you miss some of those, and it could create misunderstanding between you and the customers.
With an automation tool such as Reservety, all this calculation is too easy and conducted with pre-built templates; you don’t have to calculate the pricing of individual items; the pricing is automatically calculated with different rules you set depending on rental condition. Moreover, the system does the accounting and bookkeeping part as well with Xero and QuickBooks software. Thus, you never miss on any transaction.
5. Calculating Mileage Prices
To calculate mileage prices, you can set up a fixed-rate around the business location you service. In case of rental outside the service area, you can create additional charges for every extra mile. The charging criteria might vary based on the size of the equipment you are renting.
Pricing Strategy for the Rental Business Operators are:
When coming with right prices for your equipment, you have to be conscious about several factors that influence the rental pricing and its impact on customers. These factors are:
-Competitor Pricing Strategy
-Buying Price vs. Rental Price
-Customer’s Affordability level
After carefully analyzing and deeply understanding all these factors, you would be able to come out with rental pricing that best suit the customers. Since, the most important factor is to understand the competitor’s pricing and whether it can fit your revenue goals or not. Plus, it is important to determine whether the pricing is comfortable for the customers or not. Will they rent at that pricing? Along with this, the market research is important to get a view of best pricing practices. So, reasonably answering all these questions would definitely allow you to come to a price point which is completely sync with all these aspect of rental pricing.
Prices calculation for equipment can become more and more involved with new conditions in place. Remember, keeping everything smooth and straightforward would allow you to do the thing with more ease. And, using a tool such as Reservety, you can incorporate technology in your existing business to do more wonders than you believe.
While these are some frequent questions by rental owners, there could be more questions hovering around your head. Why not share it with us in the comment below? We would try to address those in our post.