The Ultimate Guide to Rental Inventory Management in 2020
Great rental management is possible only with successful inventory management. Here's our guide to managing and tracking rental inventory in...
So, you’re in the process of starting a rental company, or you’re the owner of a growing business, and you’re thinking: “I purchased my inventory. I have my business idea, let’s go!”
While enthusiasm is the spark any successful business, a lot of questions arise when you start a rental company. Why? Because compared to sales, rental items keep coming back. It’s an entirely different way of managing and keeping track of inventory. For example, how are you going to make sure none of your assets get lost? How do you avoid double booking your equipment? And how are you going to handle inventory efficiently so you don’t have to keep customers waiting?
You may have thought about all of these, or you’re not quite there yet. Either way, this article will shed light on everything you need to know about rental inventory management and give some examples of how to tackle those challenges with Booqable. To kick off part I, we’re going to start simple.
The first thing to consider as you start a rental business is mapping out your inventory. Mapping out your inventory is about knowing what you have, how much you have, and how you’re going to keep track of equipment being checked out and returned. Whether you manage bikes or camera gear, furniture or baby equipment or anything else, it’s fundamental to ask yourself how you’ll categorize your assets to keep your rental inventory organized and on track.
Categorization is essential because not all your products are similar. If you treat all your stock items the same, you’ll probably lose track quickly, or grow overwhelmed by the size of your rental inventory. That’s why it’s important for efficiency, and for your sanity, to divide each type of product that you own.
First, there are the more expensive assets within your rental inventory. These are the items that require a relatively large investment; the products you’d want to keep specific notes about, and even manage using barcodes or other identifiers. Depending on the industry you’re in, these could be products like mountain bikes, high-end camera gear, tables, strollers, or any other products you want to track with much detail. At Booqable, we call this category ‘trackable items.’ Setting up your assets as trackable items allows you to keep specific notes about individual stock items, and helps you keep a log of their order and maintenance history.
Should all your products be considered trackable items, though? Not so fast. Imagine for a second you run an event rental company. You have a customer who is hosting a party for 300 people, and she needs 320 forks amongst other items. It’s not realistic for your business to track all flatware by a unique identifier. Think about the hours you’ll spend doing inventory counts and double checking whether you’ve gathered all the right forks. For these situations, we created bulk products.
Bulk items are the type of products you don’t need to specify individually as you check them out, helping you to handle them faster. Treating equipment as bulk is perfect for accessories like bicycle helmets, cables, flatware, or bottles, all of which relatively low-cost items that you pick from your shelves at random (often the item that’s closest), rather than making a careful selection.
Separating bulk products from your trackable items saves you a lot of time as your rental inventory gets more substantial, and brings a level of organization to your business that will streamline the way you handle pickups, returns, or even deliveries. Not only will your rentals run smoothly from start to finish, but the confidence in your business with shine through to your customers.
You may now be wondering what to do with those products that don’t quite fit into either of the previous categories. Since your inventory list doesn’t stop at two product types, neither does Booqable!
Whether you deal with on-location pickups, the delivery of goods, or even shipping items to your customers, there is a way to categorize these one-time charges. We call these ‘services,’ which are one-time fees you can add to any of your rental orders. But services aren’t limited to charge for delivery, for example. You can also use them for insurance, cross-selling items, or any other services you have to offer.
At this point, you probably have classified most of your rental inventory in your head. But chances are, there are still those few pieces that don’t quite fit into any of these categories. That’s because they’re not for rent, and they’re not services because they behave more like something you sell; you don’t expect them to come back. These items are called ‘consumables.’ Consumables are things you plan on offering, but your customers won’t be returning like the rest of their rental equipment. Some examples are snacks, water bottles, tape, firewood, and pacifiers, to name a few.
With all your equipment categorized, we’ve come to the part where you’ll need to think about the specifics of each product. You’ll need to figure out how to track the overall product type, which images you want to display, whether you need variations and what you need to communicate in your product descriptions.
Regardless of the products you offer, each one needs a unique identifier. This identifier is called an SKU, or Stock Keeping Unit. A SKU can be anything from the product name to a descriptor word to anything that helps you keep track. Booqable automatically creates a SKU as you enter a product name, although you can always change it into anything you want. We recommend keeping your SKUs simple, yet descriptive, so they’re easily searchable.
In addition to a SKU, your products should have a photo, so your customers know what they will be renting (or buying in the case of consumables). This photo helps your customer understand what they are signing up for, which is why this photo should be of the overall product. Don’t panic, though! If you don’t have an extensive image bank of your rental inventory, Booqable will find an image that matches your product name. It’s up to you to use the suggested image or replace it by uploading your own, just keep in mind that images that are automatically added may be subject to copyright and using those images is at your own risk.
As you’re organizing your rental inventory, you may find that you have products that are almost identical and you want to name them the same thing; they only differ by one small feature or adjective. For example, you may have two bikes of the same make and model. One is red, and one is blue. Or one has a slightly larger frame size than the other one. Or you offer tents: one that accommodates three people and one that’s meant for six, although the model is the same. You may find that it’s a waste to make these into two different products because they’re so similar.
Why not bundle those products under one SKU and add variations to them? Each variety can have an individual base price and stock count. Working with product variations is especially helpful as your business starts to grow because they help you declutter your inventory list and make things more manageable. These little organizational tools also help you stay streamlined as you expand in the future.
Now, imagine you rent out mountain bikes near a large forest. You want your customers to get clean, well-maintained bikes, right? Good thing padding time exists! Do you think your products need time before and after a rental to get everything prepared for the next customer? Then you’ll benefit from setting up padding time, so your products appear booked for longer than they are. For other industries, padding time gives you some breathing room to check your tents for rips, recharge your batteries, clean your flatware, and get your equipment back in tip-top shape.
Do you struggle with keeping track of notes about your stock items, or keeping track of repairs, serial numbers, purchase information, warehouse locations and more? Sometimes, you could use a place to store and share all of that. That’s why Booqable enables you to add detailed product descriptions, both for yourself and your customers.
There’s also plenty of space to store valuable info in all the right places. You can create custom fields, add tags to your rental assets, leave notes for your teammates, and save virtually any information along with your stock items. Have any questions about setting up and managing your rental inventory? We’re glad to answer any of them! Just contact us, and we’ll help you out.
With categorization and settings under control, let’s put a price tag on your products! Here’s where you can make things as complex or as simple as you want, and the method you use depends on many factors, including the product type and how competitively priced you want to be.
The most common pricing method for rentals is a flat fee. That’s where you set a base price per time-period, such as a cost per hour, day, or week. Depending on a customer’s rental period, you calculate the amount according to these base prices. As your rental period increases, your prices also increase, linearly.
Another common practice in the rental industry is using a structured pricing system, which means you apply a tiered pricing structure that gradually decreases for more extended rental periods. It’s incredibly useful to gain a competitive advantage by providing customers with a slightly discounted rate over time. Here’s an example: if you rent out bikes, you may charge $25 for one day, although four days may only cost $85 instead of $100. By using structures, customers are more likely to pick a longer period and do business with you instead of one of your competitors.
Having a solid plan for managing your rental inventory is going to help you in the long run. Keeping a clean rental management system allows you to monitor your assets, but also keeps all your products (including their notes and statuses) up to date. If something were to happen to your equipment, it wouldn’t take long to make a note of this. Therefore, it won’t be long before you can solve any issues and get your products back on track again.
When you know your inventory inside and out, and find the right tracking methods, you have more time to focus on what matters most: your customers. It’s no secret that happy customers keep coming back. And the happier the customer, the more likely they are to recommend your business to someone they know!