Taking the gradual return to pre-pandemic life into account, it is quite reasonable for the general public to organize and attend parties and events. In the majority of parts of the world, bookings for parties and events have witnessed an increase. To keep up with the shifting consumer perspective and dynamic trends, party rental businesses have adopted the online method for resuming their business operations.
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How are Businesses Conducting Party Rental Operations Online?
To take the digital route to rent out party supply, numerous businesses opt for SaaS and readymade solutions. Both these solutions do not require business owners to hire development teams or have any programming knowledge. Using these solutions, they can quickly set up their digital storefronts and begin renting out party supply.
One notable difference between SaaS and readymade party rental solutions is that readymade solutions often come with lifetime usage licenses. SaaS on the other hand, involve endless recurring costs, which make them more expensive than any web development method.
Check out the detailed case study on how Yo!Rent provided Kouture Studious with agile means to run and handle party supply operations.
Pricing Models For Online Party Rental Business
Online party rental businesses differ from the offline ones in terms of pricing models and various other aspects. This is primarily because of the expanded reach that the internet provides, which exposes online party rental businesses to larger market segments and competition. Thus to successfully conduct online party rental operations, online businesses are required to work on their pricing models and establish a strategy that enables them to target a diverse audience while keeping them invulnerable to competitive pricing threats.
In this blog, we have shared some pricing models that online party rental businesses can use to price their products and services:
Note that the following pricing models might not be suitable for all businesses and you may need to conduct your own research to select the most profitable pricing model.
1. Cost Plus Margin
The cost plus margin pricing model is a bit difficult to understand but profitable for online party rental businesses. It assists them in recovering capital costs by estimating approximate pricing and conversions. Under this pricing model, business owners decide rental fees to recover their expenditure on inventory in the minimum possible number of days.
For example, let’s assume a particular equipment costs a party rental business $1000 per piece. To recover the cost in 20 days, the business is required to set the rental price as $50 per day ($50 x 20 days = $1000). Then only, the party rental business can enter in a profit state from the 21st day of rent. The business can also speed up the cost recovery by charging additional costs for delivery.
2. Demand-Based Pricing
Under this pricing model, the business owner increases and decreases pricing as per the rise and fall in consumer demand. The products that are high in demand, such as glassware of some particular design, can be rented out at a high cost. On the other hand, less popular equipment can be promoted in offers and rented out at cheaper prices. Demand-based pricing is an efficient pricing strategy to recover the costs of all products. To implement demand-based pricing, online party rental businesses require price surge and upselling features in their rental solution.
3. Competitive Pricing
Competitive pricing is different from all other business models, as in this model, the rivals of a business directly affect the pricing. However, competitive pricing is only feasible when a party rental business has a lot of competitors in its targeted markets. The sole purpose behind this type of marketing is to protect your business from market competition. It may also require you to set different pricing for the same product in different market regions. For example, launch discount offers in selected cities, charge higher servicing in metropolitan areas or provide free delivery in semi-urban towns.
4. Price Bundling
Online party rental businesses can recover the costs of low demand products by bundling them together with top-demand products. In such a scenario, the rental price is not set for individual items but for the entire bundle. Other benefits of price bundling include reduced marketing costs, distribution costs, and increased value of top rental goods for customers. On online platforms, party rental businesses can create entire packages or catalogues for the proper execution of price bundling strategies.
5. Penetration Pricing
Penetration pricing is used to enter new markets and disrupt the existing purchasing behaviours. However, this pricing model is only feasible for large scale businesses and entrepreneurs with enormous budgets. To explain it better, penetration pricing refers to renting out equipment at extremely low cost in comparison to the competition. While this pricing model ensures immense public exposure and marketing benefits, ROI generation is slower.
Diverse Features to Support all Pricing Models
Based on these pricing models, a party rental business can start renting its products via eCommerce channels. A business owner can also select the pricing model via hit and trial. However, the overall price calculation of a bulk supplies order is another problem that many party rental businesses face. To resolve any such pricing issues and much more, Yo!Rent supports tiered pricing options, upselling features, and product recommendations. Visit Yo!Rent to check out how it streamlines rental operations for online rental businesses.