A critical aspect for any business is setting the price of your products and services. For the inflatable rental industry you will need to consider a variety of different pricing options to offer your customers for equipment rental and services. The pricing structure will of course vary depending on the equipment being rented and length of time. You will also want to consider offering package discounts if more than one product is being rented for an event. Many inflatable rental companies also have pricing to reflect both peak and off-peak hours, such as weekend rentals versus during the week, offering a discount during the slower times. This will also help to maximize your equipment.
Before finalizing your inflatable rental pricing it is important to look at what your local competition is offering. Many times pricing and detailed information is not published by an inflatable company either online or in printed materials, as it may fluctuate based on the factors listed above. Consider contacting your competition, posing as a potential customer, to gather their pricing and product details. The more information that you can gather the better, try to have them price out different options (packages, times, days of the week)to get the best understanding of heir pricing structure.
This information about your competition will give you an idea of what the average market price for inflatable rentals in your area. Of course, don’t assume that you have to undercut them and offer the lowest price. Your products and services provided may be superior to the competition, which will set you apart without having price be the only factor for customers to consider.
It is critical to any business that their pricing cover their costs, with enough profit left over to make it worthwhile. Determine what your monthly costs are, factor in a salary for yourself, as well as information to maintain and upgrade your equipment. From there you can estimate how many events you will do each month. Then determine what the average rental price would need to be to meet your costs.
Pricing can be changed down the road, although this may be a little trickier and require an explanation to existing customers. If you are not winning business and are consistently hearing from potential clients that your pricing is too high it may be time for action.
One popular method for setting your price is ‘costing out a price’. Using this method you will take into account your business costs, both direct and indirect, and your desired profit. Another method is ‘pricing competitively’. With this method you will first establish a cost-based price and then compare this price to the market, which is what your competitors are getting for comparable services. With this information you can adjust your price accordingly.
Don’t get too complicated with your fee structures, but make sure your customers have enough options to consider when renting from you.
Good luck and happy pricing.