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Rental company? Proper pricing is a key factor

By Iselin Bostrøm 

The pricing of your rental service plays a crucial role in the profitability of your business. So, how do you determine the right price for your rentals? This article will explore some strategies for setting the right price for your rental service.

With new rental services and subscription offers constantly being introduced, the rental industry is undergoing a transformation, particularly as the reuse economy and circular business models gain popularity. As such, it’s essential for rental companies to carefully consider their pricing strategy in order to be profitable. This means choosing a price that is strategic for both your industry and your target audience.


Things you must consider when pricing your products

Pricing can be a powerful tactical tool for your rental business, as it can help you attract the right customers, increase revenue, and stay competitive in your market. Here are some tips for using pricing as a tactical tool in your rental business:


  1. Analyze your market and competition: Understanding the prices of comparable rental properties in your market can help you determine the right pricing strategy for your business. Consider factors such as demand, location, and amenities when setting your prices.
  2. Experiment with different pricing strategies: There are many different pricing strategies that you can use in your rental business, such as premium pricing, value-based pricing, and dynamic pricing. Experiment with different strategies to see which one works best for your business.
  3. Use pricing to differentiate your business: Differentiating your business from the competition can be a powerful way to attract customers. Use pricing to highlight the unique aspects of your rental properties, such as their location, amenities, or design.
  4. Be transparent about your pricing: Be upfront about your pricing, and make sure your customers understand what they’re paying for. This can help build trust and credibility with your customers.
  5. Monitor and adjust your prices: Keep an eye on your prices and make adjustments as needed. Factors such as changes in demand or the competition can affect your pricing strategy, so be prepared to make changes as needed.


By using pricing as a tactical tool, you can effectively attract the right customers, increase revenue, and stay competitive in your rental business.

How to set the right price?

Price is often a deciding factor for customers when choosing between renting or owning a product. To determine the right price for your rentals, it’s important to consider the market, your competitors, and the cost of a brand new product. You should also consider the customer’s perspective: what options do they have and at what cost? What price would they be willing to pay to rent the product from you?

In addition to covering your expenses, such as shipping costs and product maintenance, it’s important to find a balance between setting a price that is too low and one that is too high. A low price may not generate enough revenue, while a high price may deter potential customers.

Dynamic pricing, which adjusts prices based on supply and demand, is becoming increasingly common in the rental industry. For example, prices may be higher during peak season when demand is high and lower during off-peak season to increase demand. Some rental companies also offer discounts for longer rental periods, although it’s important to consider whether it’s more profitable to rent out more frequently at a higher price per customer or for longer periods at a lower price. In the corporate market, volume discounts and contract-based pricing may also be important factors.

Factors that may affect prices

In other words, there are several factors that affect the price that pays for your rental service. We’ve compiled some of the options below here and what you might want to investigate to help you choose strategically correct prices for your products.

  • Your customers willingness to pay, both private or business. What value does the product provide for the user? Is it a product of high interest or low interest?
  • Competitors’ prices. Check how much your competitors charge to rent their products. How much does it cost to buy the product yourself instead of renting it? This can also affect the customers willingness to pay.
  • Season, holidays and availability. How does the demand of your products vary during the year? Are there some seasons that are quieter than others? Consider whether prices may be higher and lower in some seasons.
  • Be able to handle discount structures in accordance with the rental period. By offering a discount on longer rental periods, you have the option to extend the rental period and thus make more money from the same customer.
  • Membership and rebate agreements. Membership is a great way to secure rental properties over long periods of time. Membership can often offer a lower price by having the customer commit to a longer period of time.
  • Promotions and promotional codes. Consider running campaigns and offering your service during periods when demand is lower.


You need a flexible pricing system

Flexibility is crucial for rental businesses, and it’s important to have a system in place that allows you to easily adjust prices based on demand. Sharefox has developed a rental system tailored to the needs of rental companies, including a price engine that is based on car rental principles and has been further developed to meet the needs of our customers. With this system, our customers can easily adjust prices by season, offer discounts and memberships, and more. This can help improve their bottom line.


However, it’s important to remember that price is just one aspect of the overall customer experience when they rent from you. Providing excellent customer service and using an efficient management system are also key to running a successful rental business.

What are you going to do now?

When you are ready… here are 4 ways we can help you expand your rental business! 
  1. Do you want to grow your business today? Try Sharefox rental system for free – or book a demo and get a personal expert to analyze your company’s situation, come up with solutions on how you can streamline your methods and create a more profitable company.
  2. To learn more about the Sharefox rental system, read about trends and news for free, visit our blog or visit our resources section in the main menu. Here you can download guides and e-books that we also share with our customers.
  3. If you want to work with the circular economy and Saas and want to be part of the Sharefox team or find out why we are one of the fastest growing rental platforms in the rental industry, see our job postings here.
  4. If you have a good friend or know someone who would have found this article interesting, then feel free to share it with them via email, Linkedin or Facebook .