Home Forums Marketing mastery A hiring-out items question

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  • #970965
    SalenaKnight
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    • Total posts: 604

    This idea is just a thought at the moment, but I could put it into place reasonably quickly if I decide to go ahead…

    I was wondering how you work out hire rates for items? eg, if an item costs $100 for the person to purchase outright, how much should I charge to hire for a weekend, or a day (I doubt that it would be needed for longer than this).

    How do I work out the cost to charge if the item breaks whilst in the customer’s possession (it’s reasonably fragile).

    ETA – it would mainly be for weddings/functions.

    Any ideas would be great.

    #1047055
    peppie
    Member
    • Total posts: 525

    From my experience of some years back on the hire arrangements for stage lighting and PA equipment and such,,, typically the hire rate you would need to cover would be something like 3 to 5 % of the original cost value per day hired out. (Allowing for the fact that you will not have it hired out each day of the year and of course something to cover general maintenance costs etc..)

    For any hire out there would always be a deposit to cover breakage, and, the very real possibility that it would simply “disappear” – that is for some people this is a cheap way to acquire new equipment! If it is fragile then bang on a substantial deposit from which you make it clear up front you will be deducting any breakage upon return.

    If you want to do the exercise, you could work out the hire rate by just simply taking the original cost, add any ongoing costs, time to deal with the paperwork etc. etc.. Total up everything and then be realistic about the usable life of such a thing (my suggestion is if it is very fragile maybe 1 or 2 years, if it is say a heavy metal frame hardware item then maybe 3 to 5 years, in fact pretty much a worst case scenario of what you would normally consider for an depreciable life for taxation purposes). Then divide the total by the hires you expect to get for it.

    If you find the hire rate worked out this way is way over what people would be prepared to pay then maybe it is not worth your while to hire this item out, but rather, offer to it to sell them. You may just find it is not worth your while to go into the hire business for that sort of thing and it could end up costing you to do so.

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