Have you ever wondered how rental companies come up with their pricing?
There are a lot of factors that need to be considered when coming up with a rental price or package price. Here are some of the areas that we need to consider…
EDUCATION & CERTIFICATIONS:
This is a very important and necessary aspect of being a business professional. As the visionary/owner of All in the Details, I am globally certified as a wedding & special events coordinator and a designer. I am continually honing my skillset and training my staff accordingly. Some additional courses that I have taken in the past are, an introductory course on legal contract writing, how to run a décor rentals company, additional courses on planning & event design and one on destination weddings & events. The cost of these educational practices is then reflected within our service packages and our hourly wages.
RESEARCH:
This business requires a mind-blowing amount of time spent researching various information. Between researching inspirational images to pull ideas from for design purposes, to researching trends, pricing, what décor & services are needed in our area, wholesalers, certifications & courses, grants, business practices, policies & procedures, local vendors, and everything in-between.
BUILDING WHOLESALER ACCOUNTS:
This process is like looking for a needle in a haystack! We do our very best to support local businesses/artists, or Canadian based companies whenever possible, but many times we must extend our reach into the United States. We spend hours upon hours researching new wholesalers to find amazing décor pieces & supplies to create our works of art. Some wholesalers have certain stipulations that we must abide by. For example, they might have a minimum order spend requirement to purchase from them. This could be per item or grouping (6 or 12 of each item) or could be on the entire purchase total ($2,500 per order). They also require certain business credentials & documents such as, a business number, GST #, broker information, etc. Some wholesalers will even review your actual business to see if you are a good fit to carry their line. We have learned that when we are required to expand our reach into the USA for wholesalers, many do not ship to Canada, or the shipping rates are astronomical.
LANDED COSTS VS RENTAL PRICE:
Before even considering ordering new inventory, there is quite the process to follow before making the purchase. Starting with the design inspiration, we then research wholesalers to find the best quality & price point for the items needed. Next, we must calculate the landed cost of the item(s). The landed cost will include the price per item, plus any taxes, duty & brokerage fees, exchange rate, shipping & handling, the cost of labour & supplies needed if creating a custom piece, etc. From this point, we take the landed cost and come up with the proposed rental price. The next step is to research the current market price for renting that item in our area. Many times, we need to research pricing throughout BC, or across Canada or even into the USA. Gathering all this information still doesn’t mean that we can order in the item(s), as we still need to determine whether or not that proposed rental price is attainable for our local demographic. If not – then it’s back to the drawing board to find items that will.
TIME REQUIRED TO CREATE PACKAGES:
When preparing new packages for clients to choose from, this requires a lot of additional time too. Between researching pricing or supplies required for the masterpiece, attending venue walkthroughs to gather data & measurements, to blueprinting & mapping out the design, building timelines & schedules, creating mock-ups, and then logging in all the data into spreadsheets to calculate the price for the package.
MARKETING OF ITEMS:
Marketing is not just the art of advertising on social media, through business cards and brochures. It also includes creating the mock-ups to showcase our talents, then having them professionally photographed, and added to our website for your viewing pleasure. We take a different approach to marketing than a lot of businesses. Instead of investing copious amounts of money into advertising, we prefer networking with fellow industry related vendors. This not only builds our working relationships, but also helps build up other businesses too. We believe in community over competition, and that there is enough room in the proverbial sand box for everyone to play – as long as no one throws sand.
CLERICAL WORKINGS:
Countless hours go into preparing the necessary documents for each client’s file. This includes going over intake forms & Wish Lists, preparing quotes & invoices, receipts, rental agreements & contracts, blueprinting custom designs, creating pull sheets, etc. Each document requires separate considerations and time to prepare.
PICKING & PACKING:
This is a very time-consuming process where our team makes sure that no details are overlooked. From double counting the items before they are packed into the totes, checking battery levels, making sure legs are tightened on furniture pieces, fingerprints are wiped off glassware, strategically packing each item with the proper packing materials in the proper totes, etc. We then double check that everything is accounted for before handing off the order to the client. This process is then repeated when the order is returned.
STORAGE SPACE:
Not only do we have to have somewhere to store all our creative rental elements, but we need to purchase shelving to put everything on too, which is all part of doing business. Things that you might not think about are the fact that we need to look at the amount of storage space that an item will require for storage. How often will that item be rented out? If a piece is larger and it will take up a lot of room to store, is it worth the investment or could this space be put to better use for other items? Many décor companies come up with a formula for pricing per square foot in their warehouses and this cost is then attached to the rental item.
TOTES, STORAGE BINS, PACKING MATERIEALS:
With storage bins & totes – oh lordy, do we have a lot! In one year alone, I spent over $6,000 on totes! It seems strange to say – but totes are such an important part of our business. Not all totes are created equal though. We invest in some pricy totes to make sure they will stand up to weather conditions and last during multiple rentals. For example, the totes we use for transporting cutlery cost around $20 to $40 + each. These totes need to be extra strong to hold the heavy contents and not disintegrate during transport. Packing materials are used to not only protect the décor during transit, but also for sanitary purposes. We use washable liners within our totes for wine glasses, etc., which allows us to pad between the layers of glass to prevent scratching & breakage. These liners will also absorb any liquids from returning orders. With our plates, we have had custom waterproof liners created to store the sanitized plates in for storage & transport, then the dirty plates are placed inside to be returned. All these packing materials are then sanitized and reused for additional orders.
CLEANING:
Standard cleaning practices are included in the cost of renting our décor. These costs need to be added into the rental price per item and are typically based on the time & cost required for cleaning each piece. With our glassware, plates & cutlery, we do charge a bit more for these items, as we hand wash & polish each item for quality control. Being a chef in a previous career, I have found it necessary to take additional measures to make sure items are “near perfect” for our clients. When I say “near perfect” – these are rental items and will occasionally exude some form of wear & tear. Most often we do rotate décor pieces out of our inventory that are not up to our high standards. With our table linens, we invest in premium linens to help offset the additional costs for cleaning & laundering fees. Investing in a higher quality table linen helps prevent stains & wrinkles from setting in. Our drycleaners are in Quesnel, as we no longer have this service available in Williams Lake, and this is reflected in the pricing of our linen rentals as well.
TOOLS, EQUIPMENT & SUPPLIES:
This job requires a lot of additional tools & supplies to create those magnificent masterpieces. We need a multitude of different height ladders for specific ceiling heights when installing ceiling treatments, and we even have a 15-foot manlift for those more complicated installs. Our toolbox is extensive and is filled with tape measures, drill bits, wrenches, hammers, pliers, etc. We also have two additional decorators’ bags with zip ties, pins, tape, glue, wire, BBQ lighters, ceiling treatment hardware and everything we would need for installation & retrievals. For our Day of Coordination & Event Management packages, we have an emergency kit stuffed full of cleaning products, a first aid kit, medications, toiletries, kids’ activities, dog treats, sewing supplies, stain removers – you name it, we most likely have it! All these items are also needing to be factored into pricing for specific packages.
TRANSPORTATION:
With deliveries & collection services, we currently have three options to choose from. Smaller orders are delivered with our car, medium orders are delivered with our truck & canopy, and for larger orders/pieces we require the truck & cargo trailer to deliver/collect your masterpiece. All options require insurance, fuel, repair & maintenance, etc. We also need to factor in the cost of a driver’s wage, plus the wages of team members who are required for the installation & retrieval process. Each clients’ order for delivery/collection services requires additional planning & separate considerations. We need to factor into the equation – times for loading/unloading, if we are required to off-load the order to specific areas, if there are obstacles that hinder a smooth transition – like stairs, tight hallways, steep hills, uneven ground, etc. Another aspect that are usually overlooked is the supplies required for transporting – this includes tie downs, packing materials, dollies, etc. We look at the logistics for delivery – the time it takes for us to go from our Showrooms to the final destination and everything in-between. Including, turn around times, road & weather conditions, traffic & buffer times, whether we have additional events booked for that same time frame, etc. We do our best to offer fair pricing, but occasionally we are questioned by clients who don’t quite understand all that goes into this service, and for those reasons – we also offer free pick-ups & drop-offs of will call orders to our showrooms.
INSURANCE, WCB, ACCOUNTING, SOFTWARE:
As a business, we are required to have certain coverage to protect not only our staff, but also you – our valued clients and your guests. We have commercial insurance covering our property & showrooms, liability insurance to protect you & your guests – along with the works of art that we create for you. We also have WCB to cover our team members on the job, vehicle insurance x4, and everything in between. Other expenses that apply are utilities to keep the lights on and the showrooms heated, accounting & payroll fees, subscription renewals for websites, rental tracking software, and all the other amazing tools that we use to assist with keeping our business running smoothly.
WAGES & STAFFING:
Possibly one of the most important factors to be considered when calculating pricing. We base our package pricing on which team members are working on the project and the unique skillsets that they bring to the table. Other considerations are, travel time for each crew member, overtime for long installation & retrieval times, off-hour services, the time spent in the showrooms preparing & cleaning orders, etc. We love fostering the artistic interests of our Junior Assistants and value their hard work too. We are currently in the process of building a mentoring program to encourage the next generation of artists, and as their skillset improves, so will their wages.
As you can see, time is the number one factor that comes into play when developing pricing. It takes time to build rental collections & service packages, to develop a well-trained team, to create & maintain our website & social media accounts, to prepare the necessary documents & files, to research & educate ourselves and others. We need to look at the time spent with clients to explore their vision for their event & how we can be of assist, to take them on showroom tours & venue walkthroughs. All these necessary details add up to the big picture when creating magnificent works of art & masterpieces for our clients and are – priceless.
All the above-mentioned factors are what create our pricing and are often overlooked by others who see the sticker/rental price of an item and dismiss the value put into it. It is our hopes that by providing this information for clarity purposes, future clients will have a new outlook on the behind-the-scenes action which is required to provide these services within our communities.
