We all love how Fainin allows us to make money by lending out our items. As many of us have no previous experience renting items, setting the right price is the difference between being a successful entrepreneur or just making a few rentals a month.
Today we are going to focus on how to set the right price for an item. Whenever you want to lend out your items, you need to consider a price that is good for both you and the potential borrower. Achieving this would guarantee you more requests- in fact, fairly priced items receive 70% more requests than over-priced items. Rental business is about long term revenues, therefore having numerous bookings will make you earn more money than having a few rentals at a high price.
The following are some important aspects to consider are:
1. Percentage of the retail price
A good first step is figuring out what your item is currently worth today. Today’s price could be different from what you originally paid for your item, thus the second-hand price would be even lower.
The amount you charge your borrowers should be a percentage of your item’s market value. Typically, the daily rental values fall between 2% and 5% of the item’s value, and 20% to 25% for monthly rentals. For example, for a camera valued at €250, a lender could charge between €5 and €12 each day, €20 a week or €50 – €60 a month.
By doing this, you can finance 100% of your items in 3-4 months.
2. Think as a Borrower
Put yourself in the borrower’s shoes, think how would you perceive your price if you were the person renting your item. Your rental price should not only be more attractive than the retail price, but also be competitive with other listings. When setting a rental price, you must select a price that is both reasonable and adequate. Never try to make all your money back from one rental, in this business money is made by getting constant rentals. If you price your item too high, no one would borrow it from you.
3. Additional items or Accessories
It is not the same to lend out an item with many accessories as one without any. Think about a game console with numerous games compared to one with none. Accessories, if useful, add value to products for which you may increase your listing price.
4. Your item Condition
The condition of your items directly affect your rental price. It is not the same to borrow a “like-new” item or an “old-looking” item. If your item is missing a part, or is damaged, this should be considered in the price.
5. Unique items
Is your item unique or no longer produced? This is important to know. If yours is a unique item, the price of your items shall be higher than others. Still, always consider the previous points too, as you still need to have a competitive price.
If all these steps are followed and taken into consideration, no doubt you will be receiving many rental requests and earning a significant income from items which you already own!
Good luck and happy renting!