Hire Prices - Help!

[Todd301]

Hi Everyone,

We are a retailer in an unusual position. We've been approached by a production company who want to hire some of the products we sell.... We're only talking about a couple of days loan of the items and any damage will be covered.

My question is - what do we charge for the hire?

I'm thinking it should be based on a percentage of the sales price, but what's a sensible percentage???

Anyone have any experience of hiring items out and what the "going rate" would be?

Any help much appreciated!!

Many Thanks

T

 

[GraemeL]

Hello Todd,

I have been faced with this before.

To you, the value of the product matters. To the production company it doesnt. They are interested in two things. 1) Getting the look/image they want and 2) avoiding hassle

You will be faced with fiddling about - can you imagine the hassle factor if damage occurs! Charge £100 per day each including collect and deliver. £100 is just notional, but do charge much more than you first thought.

G

 

[S-Marketing]

I think I may have missed something. how can the poster above tell you 100 quid is a good price with the information provided.

Anyway, the sale price is irrelevant. As I assume you won't be hiring them out again you need to work out how much value they will lose by becoming ' used'. You can then add a profit margin on top.

Hi Everyone,

We are a retailer in an unusual position. We've been approached by a production company who want to hire some of the products we sell.... We're only talking about a couple of days loan of the items and any damage will be covered.

My question is - what do we charge for the hire?

I'm thinking it should be based on a percentage of the sales price, but what's a sensible percentage???

Anyone have any experience of hiring items out and what the "going rate" would be?

Any help much appreciated!!

Many Thanks

T

 

[GraemeL]

I think I may have missed something. how can the poster above tell you 100 quid is a good price with the information provided.
.

Yes you did. I said it was notional.

G

 

[S-Marketing]

Yes you did. I said it was notional.

G

Yes I did spot that. I just thought it was odd the way you gave an example of price at all,as i couldn't see how it would help. I thought I may have missed a post that had been deleted or something. Anyway, its irrelevant i suppose.

 

[Todd301]

Thanks Graeme, that's given me some food for thought. I was originally thinking something like 10% of the sale value, but I may up that given the convenience factor you mention below. I do think the sales price has to have some bearing on the end price - after all if you're charging nearly as much to buy it as it sells for, then surely they would just buy it and be done with it. They're collecting the items as it is, so I don't have to arrange delivery....

Hello Todd,

I have been faced with this before.

To you, the value of the product matters. To the production company it doesnt. They are interested in two things. 1) Getting the look/image they want and 2) avoiding hassle

You will be faced with fiddling about - can you imagine the hassle factor if damage occurs! Charge £100 per day each including collect and deliver. £100 is just notional, but do charge much more than you first thought.

G

 

[Todd301]

Thanks Stretchy, that's also given me something to think about.... As I mentioned in my reply to Graeme, I do think the sales price must have some bearing on the amount I charge though... I can't charge as much to hire as to sell, so I need to consider this, but I will balance it against potential drop in price from the item looking used (potentially). Originally I was thinking that the items will be returned in re-saleable condition and therefore no drop in re-sale value. If something came back marked in some way, I was thinking they then pay for it, but perhaps that's a bit naive?

I think I may have missed something. how can the poster above tell you 100 quid is a good price with the information provided.

Anyway, the sale price is irrelevant. As I assume you won't be hiring them out again you need to work out how much value they will lose by becoming ' used'. You can then add a profit margin on top.

 

[S-Marketing]

Don't forget you don't have to let them hire it. If its not cost effective to hire it out, or may risk leaving you stuck with a product you can't then sell, tell them you won't do it. The fact that the hire cost may be near the retail price is not your problem. What kind of product and value are we talking about here?

From a more technical point of view, don't forget about insurance and contract based implications of hiring out stock.

 

[Todd301]

It's homeware things really, small furniture, a couple of toys, decorative things to bulk out a room, rather than things like clothing which would be much trickier to re-sell...

Thanks again for all your input, we've got zero experience in this area, so it's really great to get so much input. Thank you so much!

Don't forget you don't have to let them hire it. If its not cost effective to hire it out, or may risk leaving you stuck with a product you can't then sell, tell them you won't do it. The fact that the hire cost may be near the retail price is not your problem. What kind of product and value are we talking about here?

From a more technical point of view, don't forget about insurance and contract based implications of hiring out stock.

 

[S-Marketing]

It's homeware things really, small furniture, a couple of toys, decorative things to bulk out a room, rather than things like clothing which would be much trickier to re-sell...

Thanks again for all your input, we've got zero experience in this area, so it's really great to get so much input. Thank you so much!

Sounds to me like you could get away with selling the stuff afterwards as 'ex display' then.if you need to offer a 20 % discount after its been hired in order to sell it, how about offering the hire price as 30 % of the full price. That covers any loss of value and gives a small amount of profit for your trouble.

 

[Todd301]

Sounds great - thanks!!

Sounds to me like you could get away with selling the stuff afterwards as 'ex display' then.if you need to offer a 20 % discount after its been hired in order to sell it, how about offering the hire price as 30 % of the full price. That covers any loss of value and gives a small amount of profit for your trouble.

 

[S-Marketing]

You may need to tweak the percentages to fit in with the level of discount you may need to give.

Don't forget a contract of hire, insurance, and to take a hefty deposit.

 

[GraemeL]

And don't be tempted to accept a role as an extra as part payment

 

[S-Marketing]

And don't be tempted to accept a role as an extra as part payment

Unless its porn.

 

[Todd301]

Thanks - Googling for a contract of hire template as we speak. What would you class as a hefty deposit? The remaining 70% of the value if we did the 30% hire fee?

You may need to tweak the percentages to fit in with the level of discount you may need to give.

Don't forget a contract of hire, insurance, and to take a hefty deposit.

 

[GraemeL]

Unless its porn.

OK, got me! Please tell me where the location is?

 

[GraemeL]

Thanks - Googling for a contract of hire template as we speak. What would you class as a hefty deposit? The remaining 70% of the value if we did the 30% hire fee?

Definitely need to ensure you are covered if you never get 'it' back.

G

 

[S-Marketing]

Thanks - Googling for a contract of hire template as we speak. What would you class as a hefty deposit? The remaining 70% of the value if we did the 30% hire fee?

Deposits for hire are very strange and often are no way proportional to the value of the item. I could go out and hire a 20 grand van with a 100 pound deposit, equally I could go and hire a ladder and need to leave a similar deposit.

Deposits should be calculated on risk. One of my businesses is a small specialist tool hire business. This is high risk as my equipment is of high value, and every thief and pikey in the country knows it. I would say that your stuff is probably low risk. I suppose as you are not trying to make a business out of it you could try taking 100% payment up front and then refunding 70% on return. It may well scare them off though. Maybe take a 20 % deposit and make sure damage, loss and insurance are down to them in the contract, that way you are covered.

 

[Todd301]

As always, huge thanks! Hope I can return the favour some day!!

Deposits for hire are very strange and often are no way proportional to the value of the item. I could go out and hire a 20 grand van with a 100 pound deposit, equally I could go and hire a ladder and need to leave a similar deposit.

Deposits should be calculated on risk. One of my businesses is a small specialist tool hire business. This is high risk as my equipment is of high value, and every thief and pikey in the country knows it. I would say that your stuff is probably low risk. I suppose as you are not trying to make a business out of it you could try taking 100% payment up front and then refunding 70% on return. It may well scare them off though. Maybe take a 20 % deposit and make sure damage, loss and insurance are down to them in the contract, that way you are covered.

 

[S-Marketing]

As always, huge thanks! Hope I can return the favour some day!!

You're welcome.