In the rental business, you have to rent out your costly equipment and other expensive items. You can rent out party supplies and other items based on your mutual agreement with the client, which should be acceptable to both parties. But have to be a bit cautious while calculating equipment rental pricing for your rental business.
Earlier, people used to buy products instead of hiring products or equipment on rent, but people have now shifted towards procuring necessary items directly from contractors. Party items suppliers need to take care of each aspect while offering products on rent. They have to calculate party rental charges appropriately, as it helps them stay ahead of their competitors while enhancing their ROIs. You can visit this link to Know more about it..
Manual calculation of rental charges is tedious and susceptible to various errors. You should use a specialized software calculation tool, which facilitates the automatic calculation of all charges in seconds. Use online booking and rental software, which facilitates order booking, price calculation, organizing deliveries, setting alerts on important dates in its online calendar, and much more.
Analyze the Cost of Acquiring Equipment
The primary factor you must consider for your rental business is to determine the actual cost of acquiring equipment. When you know the cost price, you can easily set your rental charges or monthly fees.
Make sure rental charges also include the fees for any damage or cost incurred by you for insuring the item. Alternatively, you can charge a monthly fee plus a security deposit.
Calculate Residual Value
Another prominent method of charging party rental fees is by estimating the current value and residual value of all items. Residual value is determined by subtracting the value of depreciation from the current price of the item. For example, if you are offering a party rental item worth $1000 to your client, and he returns the same to you after a week, obviously you have to understand that the residual value of the item will be $1000 – (the amount of depreciation) chargeable. Suppose the amount of depreciation is $120 per year, then for a week it would cost $120/52 = $2.5 per week (approximate). You can now assign a monthly rental fee for a particular piece of equipment to your client keeping it in mind.
Special Price for Special Events
Some rental companies set special prices or rental fees for special events or parties. As a rental firm, you have to understand that rental fees vary from business to business. What you are charging a rental fee for the vehicle may not be applicable for a party rental firm and vice versa.
You should integrate the right software tool into your website business to take care of these requirements. The software uses special sections on which you can keep track of all rental fees, charges, and special rates for special events.
Calculating Additional Charges
You have to charge some additional fees like shipping charges, security fees (refundable), and gas charges in some rental businesses. Ideally, you should always inform your customers about it in advance. It helps them keep your equipment, vehicle, or other items in safe custody and prevents damage as well.
The online rental booking system allows you to keep additional charges under each head at the time of booking itself on the site. It will include deposits, insurance, service fee, fuel charges, and other costs at the time of booking on the site. It also helps you generate the correct invoice for them, including all charges. Using the right software tool, helps you give additional discounts to your customers using extra intuitive options.
