Rental Management 201: Intermediate Rental-Module 4: Rental Rates

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Video Summary

Setting up a rate structure for rental rates can be complex. Many dealerships use a formula to determine the relationship between daily, weekly, and monthly rates. However, it's important to recognize that this formula may not necessarily reflect the market price for a weekly rental. Market conditions and customer behavior can greatly influence rental rates. It's crucial to understand the market segment you are targeting, the level of competition, and the sophistication of your customers. Factors such as the features of the machine, brand sensitivity, and whether an item is considered a commodity can also impact pricing. Additionally, offering convenience goods and impulse goods like safety barricades or ventilation equipment can help supplement any potential loss in revenue. Understanding the market, conducting thorough research, and making subtle adjustments to rental rates on every category at least once a year can help ensure competitive pricing and profitability in the rental business.

Keywords

rate structure

rental rates

market conditions

customer behavior

competitive pricing