Timestamp Speaker Transcript
00:00.00 camalexandra Right? Welcome into the render podcast. We are so excited to be talking all things purging and purchasing rising prices now as the season to be doing that and as we gear up for events next year and being a whole lot of events next year we need to look at our pricing again. It's been probably a year or 2 since you've looked at your pricing I know it has been for us, especially the pandemic from last year yeah it was not a time to be raising pricing because we're just looking for business and so now's the time to take a look at your pricing. It might be a good time for you to start raising your prices but it also might not be so.
00:21.33 kaley E.
00:39.19 camalexandra This is a great episode for you to bookmark and come back to when you are ready to do that but kaylee and I are going to talk through how we do this process and we've done this process gosh probably 3 or four times over the years in more recent years and so this is just a practice that we've. Continued to perfect a little bit more every time and we're going to share how we do it. So kaylee why don't you introduce yourself for those who may start have listening to the podcast more recently.
01:06.40 kaley Well hey there friends I'm kaylee goodall I am the chief creative officer at render and I also have a heavy hand in our event side of the business and so I am dealing with pricing and inventory and projects all day long. So I'm excited to kind of. Share what we've been doing over the past couple weeks of increasing our pricing and trying to get more of that profit so that we can be really impactful with our projects.
01:34.89 camalexandra Right? something that I want to drive home right? off the bat is that as people in business. Our goal is to be profitable in business. Our goal isn't to give away all the things if you're in business and it's not necessarily just a hobby the point. Running a business is to make money to give those to your employees to bless your community to grow your business. That's a whole point of owning a business and so right off the bat I Want you to kind of get rid of the ideas or the um thoughts in your mind that might be hindering you from asking for more money. Or raising your prices right away because the point like I said is to make money in business not to just have fun and you know not make money at the end of the day so just want to set the set the standard right there and and then we also want to talk about before we get into.
02:11.68 kaley Um, yeah.
02:20.40 kaley Um, yeah.
02:28.69 camalexandra The how to and the logistics and why and all that why do we need to raise prices. Well the number 1 thing that I know raises prices and has always been a constant. Not only just now but has always been a constant is that inflation happens prices raise if you have been. Looking at the news or even social media for the last year and a half you'll know that home prices. For example, have way increased I just sold a home and I just got a listing or I I sold the home for 50000 dollars over list price which is crazy that doesn't happen very often and so that right, there.
03:01.63 kaley Spell.
03:07.60 camalexandra We know that just increases in prices and inflation is happening um, new home builds. It's costing a lot to do that and there's a reason why that's happening a lot of it has to do with the cost of goods. So anything that you are purchasing. There's just a higher cost on it right now. Um, a good example of that is wood so a new home to build. It's gonna be more expensive because it takes wood to create that house and wood just so you all know across the board is 3 times more expensive than it typically is so back in 2019.
03:38.13 kaley Um, he it's crazy.
03:43.30 camalexandra Just a sheet of wood used to cost us about thirty dollars or so right now it's like eighty it's crazy It's so expensive and so what that means for a rental company. A lot of what we do has wood in it. Your furniture probably has a wood base your backdrops probably have some sort of. Wood in it and most of it's going to be wood but you might have some mechanics that are wood and boxwood walls. Those are wood bars those are wood I mean a lot of things that we're having unless you're doing dishware or linen. It's got a lot of wood in it and so that's going to increase your pricing on that Acrylic. That's more expensive shipping is more expensive and so if you're ordering whether it's overseas or whether you're ordering from Target or whether you're ordering really anywhere. It's more expensive and so inflation right now is 1 of the most.
04:30.51 kaley Yeah.
04:36.29 camalexandra Common things of why we need to be raising our prices.
04:38.75 kaley Yeah I mean a lot of people. Especially if you're new in this business. You are likely starting to grow your inventory and so you're likely starting to add pieces to your inventory. You're sourcing new items and you're going to see price increase as a.
04:45.49 camalexandra May.
04:54.99 kaley Standard for a lot of other places that you're sourcing your inventory from and so if you are already spending a lot more on the cost of your goods of just purchasing then your pricing for renting is going to need to increase too and I think labor is also a really big conversation here is that labor costs are going up. Significantly You know the cost of living is super expensive now and doesn't really matter where you are That's increasing on a standard just inflation in general is causing that and so in order for us to pay our staff well in order for us to actually make a profit on our projects and have our staff. Paid for those projects we have to increase either our labor cost or we have to increase our product cost or you can increase both and it kind of level out so it's not some significant increase on 1 service here. So where your service fees are ridiculous and your product is super Cheap. You do it on a standard basis so it feels cohesive along the whole line.
05:53.27 camalexandra Um, yeah, definitely minimum when we're talking about home prices that goes for apartments. It goes for so many things if you look at food food is more expensive right now and so just really anything you look at is more.
06:04.60 kaley Um, yeah, that crazy.
06:12.63 camalexandra Offensive and so and that goes for the same for everything else.
06:15.42 kaley Yeah, well and this is also something that's very normal for businesses to do. It's not just the time that we're in so what's great about this conversation is is yes, we're affected by the pandemic and covid and just the change that's happened over the last year but
06:18.96 camalexandra Right.
06:34.28 kaley We have been increasing our prices minus last year we were increasing our prices every year because of just that's the flow of business. You know you get more into a streamline. Your business should be growing each year and so that is just kind of a natural flow for.
06:42.67 camalexandra Is.
06:52.27 kaley Your business and the profits that you have.
06:52.39 camalexandra Right right? back when we started the company. Our sofa rentals were anywhere from about 75 to about 1 hundred and fifty at max and looking back I'm like why why was it that but that was the norm.
07:06.81 kaley Um, is in.
07:11.13 camalexandra Was what everyone was trudging for those because prices were very low back then and so if we look back 10 years ago of course our pricing was lower because things were different back then right now if I were to have something on my website for a sofa for seventy five two hundred and fifty dollars people would laugh at it and think something's wrong with it. It would be like completely damaged. We might as well sell the product at that point. But just that that example and most of our stuff is right now are hitting about 3 hundred fifty to four hundred and Sam a little bit more than that as well and so just a a difference of cost. We didn't go from a hundred dollars first sofa to four hundred dollars overnight. We didn't do it in 1 year either and so it's a gradual incline of your prices and so if you're listening to this episode right now and you say well my soap is are 75 to 1 hundred and fifty tell you right now that you're probably able to raise your prices significantly more. Nowadays they probably shouldn't be that low. Um, of course that depends on where you're at in the world. Um, and what your market holds there. However, you likely can get away with a little bit more that and so when you start don't necessarily think that you have to start at the Hundred dollar mark don't necessarily.
08:14.46 kaley Yeah.
08:26.18 camalexandra Think that you have to start super super low and it goes back and I know that we've had an episode in the past and we'll link it in our show notes that we've talked about the way that we price our items and it's my main rule is the 3 to five rule and so if your cost is more expensive right now then your rental price is going to be more expensive. And so that 3 to five rule real quick is that you take whatever you purchase or you make the product for if you can rent it 3 to 5 times before you start making a profit that's a good merchant to stay within and so if your pricing if your cost to buy that piece is more expensive than it was ten years ago First your price it's going to be more. And so and all of that to say it all goes together whether you're pricing things for the first time or you're increasing pricing. You do have to take into effect and all of the costs that have to do with that item.
09:16.10 kaley Yeah, and I'd love to touch just for like a delete or a little I'd like to touch just for just like a really quick second just from a brand perspective and a consumer perspective. So let's say you are starting to price your inventory out for the first time or let's say your pricing is really really low think about if you were to walk into a store and there was 2 identical items sitting right? next to you. So let's say you're looking at a coffee baker. Okay. And there's 1 coffee maker that cost this amount. So let's say it costs fifty dollars and then this coffee maker right? over here costs 1 hundred and fifty dollars and you're looking at them and they look they look the same they have similar features. But I don't know about you but my mind as soon as I'm looking at these 2 items I'm thinking through. Okay, if if they have the exact same features if they look very similar um and their pricing is so off there has to be something wrong with the fifty dollars 1 mean there has to be yes, maybe I'll I'll be able to get it for fifty dollars now. But I'm likely gonna have to in maybe a couple months buy another fifty dollars coffee maker because of how it's priced and it's it's cheap. You know the product is probably not as good of quality as the hundred and fifty dollars 1 so. If I were just to spend a little bit more on the 1 hundred and fifty dollars 1 I'll be a lot more satisfied with my purchase and my product. So if you think about it from that perspective and then you also think about it from your product and your rentals. Your clients are probably doing the exact same thing. So. It's really important 1 to be doing market research on the other rental companies around you and looking at what they're pricing and how they're pricing and if somebody's pricing something significantly lower than what you know based on the knowledge that you have of the 3 to five rule and what product costs. And all of that and they're just trying to make a buck on their product. Sure maybe they'll they're making a lot of money on their product but they're probably renting out their piece a ton of times and so the product quality is probably significantly lower than your new piece of inventory. And so that's kind of how I like to think about our pricing and how like I like to think about our product is that our pricing kind of silently communicates our standard of quality to our clients. They know by coming to our inventory looking at all of the pieces looking at the pricing.
11:47.38 camalexandra Um, when you.
11:56.40 kaley Pricing shouldn't be like scary to them because at that point then they're probably thinking Well I could probably just buy this piece or because it is a rental item. You know you want to price it relatively well for being a rental but still you want your pricing to show off the. Standard of quality and care and just your brand standards.
12:17.99 camalexandra Yeah, totally yeah, you can't can't say that you're going to buy a sofa for 1500 dollars and then go rent it for 1500 dollars because your client can go buy that. But you also don't want to buy 1500 dollars sofa and rent it for 100 dollars either. It's 1 It's going to take you forever to make your money back on that.
12:37.79 kaley Um, share.
12:37.90 camalexandra Let alone make a profit but too just like what you're saying it's going to communicate to your clients that you just don't value that piece very much and you don't take care of it maybe as well as you would a four hundred dollars sofa off of ah a fifteen hundred dollars buy and so you do have to take them buy that.
12:43.38 kaley You.
12:52.64 kaley Or that they shouldn't care for your sofa. You know.
12:57.00 camalexandra Oh exactly? Yeah, they're like oh it's just 1 hundred dollars sofa like it's fine I can spill wine or put crumps on it or something like that. It's just a hundred dollars whereas a four hundred dollars sofa you're gonna be like please don't sit on that sofa with your wine because it's four hundred dollars the the difference there.
13:12.79 kaley Is right? yeah.
13:16.31 camalexandra I mean there's like a huge difference and if you're going to be pricing out out at 100 dollars and you rent it out 5 times in a month imagine the cleaning costs that you have to know incur on top of the low price sofa that you just are renting out. But the amount of damage that could happen in stains because the lack of a care because it's just 1 hundred dollars and yes, a hundred dollars is a lot of money. But if you compare a four hundred dollars step up to 1 hundred dollars. So but the care and the value that your client is putting into that piece is vastly different.
13:37.34 kaley Absolutely.
13:48.85 kaley Again, The profit is vastly different as well. Once you pay off what sofa you are now making four hundred dollars instead of a hundred dollars I mean that is a huge difference.
13:52.15 camalexandra Yes, right, right? right? and then your cost to maintain that product as well hundred all ourself if it's coming back with dirt and damage and crumbs and just you have to clean it every single time. You're putting 1 maybe thirty minutes into cleaning plus the product to clean it plus a vacuum all that costs a lot of money whereas the sofa that's four hundred dollars. You might have fifteen minutes just doing a quick you know lint roll over it and putting it back on your shelf. Well then you're.
14:23.90 kaley Yeah, he's.
14:28.24 camalexandra Eating into your cost and not only are you renting it four hundred dollars. But then you probably have 25 to thirty dollars of cost to maintain the product every single time as well for the four hundred dollars stuff but you're making the four hundred and maybe you have 10 dollars of cost goods to maintain the product and so there's a huge difference between a profit margin. Between the maintenance of your sofa between the quality. The value that your clients put into it and the value that you even put into your own sofa to a four in a dollar sofa for rent I'm going to take care of that baby more than I will maybe a Hundred dollar sofa for the exact same thing and so just across the board. Having value and understanding. Your product is really really important which is why we're having this conversation in the first place and we also want to say another reason why we should look at our pricing or how often we should look at our pricing.
15:09.48 kaley Um, yeah.
15:22.78 camalexandra Is going to be at least once a year if not maybe twice a year and there's certain things that take an effect for example, a pandemic. We're probably not going to raise our prices during a pandemic but we certainly did look at our prices in the midst of the pandemic I don't know if you remember caylee. Maybe. Month or 2 months into the pandemic we looked at our pricing and lowered a few things because we needed to book business and people couldn't afford to have rentals because of the pandemic and being laid off from drops and all that and so there was a reason why we needed to lower some of our pricing back in 2020 whereas now, we're back to raising our pricing again and so sometimes when you look at our pricing not necessarily is it every single time going to be a price increase but based on what's going on in the world. It could be a price decrease as well. So and another good rule of thumb is. Make sure you look at your pricing at least once a year if not sometimes twice a year just based on what's going on in the world and what's going on in your business and you know if you hire on a whole bunch of new people. You're going to have to make up for that somehow and so you might have to increase your pricing if you and. You know, dwindle down your your employees or if you have a smaller staff then you might not have to do huge price increases. So there's multiple reasons why we do this and but looking at just a good role of them market your calendar once a year at least go through your pricing. And do recommend doing this in a slower season and it's a little bit harder to do in a busy season and it's a very busy season for us right now as a company. However, we did just raise our prices because we do know that next year's gonna be even busier and if we don't do it now. We're not gonna be able to do it because we're just gonna. Increase in busyness especially here in texas events are crazy bonkers right now and so if you can find a time of the year if you've been in business for a year or 2 and you can kind of look at your year and say you know and this month I'm a little bit slower and this month I'm super busy trying to find a month that and seems achievable to actually look at your pricing and make the adjustments needed.
17:37.68 kaley Yeah, and I'd give yourself about generously 3 weeks if it's just you maybe a whole month of just 1 taking the step of the first step is to look at your pricing and we'll get into this in just second but looking at looking at your pricing planning for the increase and then. Actually implementing the implementation of your pricing can take a long time also going through each price takes a long time to and so just note that it's probably depending on your inventory size and the scale of your team cam and I are the ones doing it on our team so we had 2 heads.
17:57.14 camalexandra Freedom.
18:15.54 kaley Kind of do it together but it still took us several weeks to kind of refine and go through and have conversations and really build out what we wanted it to look like but I would say also if yes, only like start looking at your pricing at least once a year or twice a year
18:16.91 camalexandra Um.
18:34.51 kaley But constantly be looking at other people's pricing throughout the year don't just look at somebody else's pricing right? when you get ready to look at increasing your pricing and when I say look at other people's pricings I mean your competitors. Um, but I would I am constantly looking at our competitors websites.
18:40.11 camalexandra Again.
18:53.77 kaley To see what their pricing. What our competition looks like and I say our competition. We don't really have competition. There's enough business in Dallas for everyone but our community of rental people here in Dallas. Pricing at all these different levels and so I want to know where everyone's at so that if I need to source something which we source things for our clients all the time I have knowledge very quickly to know? Oh okay, they charge this. This is what this is gonna be competitive with what we are charging.
19:24.53 camalexandra Yeah, exactly and this isn't an excuse to go submit and quotes with your competitors that are fake quotes and you're just trying to like figure out their pricing when we hate it when people do that to us and they go stas and we're like well.
19:37.90 kaley Yeah, please don't do that.
19:44.29 camalexandra Are they actually a client are they not I know that was a really big thing a few years ago that people were ghosting each other and going in secret shopping each other this isn't a secret shopping thing. This is a look at your community because first of all, if you're charging four hundred dollars for a sofa and. Joe schmo down the street is charging 2 hundred dollars for a sofa you are way outpriced on that. Um or say you're charging four hundred dollars sofa and Joshma's doing 600 dollars for a sofa then you're way underpriced and so you want to note you want to take a pulse of what is going on in your area. And again here in Dallas texas it's gonna be completely different than in my examples that I do in our teaching new york city. It's gonna be completely different than here in Dallas texas and in long view texas it's gonna be very different than here in Dallas texas as well and so we have to look at where we're at in. New york city it's going to cost way more for a warehouse. There. The price of labor is way more and the cost of goods is way more because if you're in the city. There's probably not a home depot just on the street like there is here in texas and so you're going to have to travel further to get to a home depot when you're. Pricing is also probably going to be increased there because it's harder to get it to the city and so in New York City there is a huge increase on just the overhead of expense for a rental company there versus here and same thing with a small town like wonk view or college station or. Um, any of these tiny little cities in texas there's a lot of them. It's very different there because like for here our rent is much higher than someone who has the exact same building in longview texas completely different areas completely different costs. And so you do have to look at what your area is like you can't be in longview texas listening to this podcast and saying well I need to charge you know x y z for my sofa because render events is doing that in Dallas. Well we have a completely different set of expenses here. Then you might have in a smaller city or a bigger city and so just keep that in mind as we get into this conversation that you do need to look at your area in your community of people and it's not a excuse to go secret shop. It's not an excuse to ghost people on this. And you can pick up the phone and call them and you can look on their website if they post their and post their prices on there. We know some of the people who don't post their prices. What some of their prices are just based on as a business we source a lot of product as well and we are actually paying for that product. It's not that we are.
22:33.51 camalexandra Um, looking to ghost them and do a fake quote we actually are quoting things because we actually have to use them for clients and so and just want to make sure that that's very clear. Please don't go and make enemies with your community and that's not a good thing to do all right? Let's get into. Really the logistics of how do we do this? What is the best process you touched a little bit already on the very first step which is looking at your pricing and so there's a few ways to do this depending on where you're at in your business journey. You might not have a software yet. You might be relying on an excel spreadsheet which I did for a very long time so please don't take this and say and think that we've never done that I did an excel spreadsheet from 2010 when I started to twenty sixteen for 6 years I did spreadsheets in Google sheets. I didn't we didn't even have google back then we had Microsoft word and excel spreadsheets to do everything in business I don't think we could operate that way anymore and so we have software now to do that. So if you are starting your your business or if you have not started yet.
23:31.46 kaley Um, crazy.
23:38.13 kaley Now.
23:47.34 camalexandra And know that it is completely fine to start there. We all most of us in the event business that have been around for a long time. We started there because we can afford the fancy softwares or they just weren't even around back then um, but know that it's okay to start there and so.
23:59.66 kaley Yeah.
24:05.71 camalexandra What we need to do first is look at our pricing currently as it stands right now and say you're going to do that if you do have a software There's probably going to be some sort of a report on there and we use good shuffle pro and so they have some really great reporting on that and. I know r w elephant does reporting as well tap goods studs reporting as well and so there's lots of rental softwares that people utilize who listen to this podcast but the very first step is to download a report of all of your items and the price that you rent it for and that's your like minimum baseline. If. You can also pull in the price that you paid for that item or if you have multi-day pricing or if you have cost of goods on it to maintain the price anything that you can pull and is very well aided in this conversation because it really just looking out.
24:55.70 kaley Yeah, number of rent number of times. It's gone out the amount of money that you've made off of the product. Yeah.
25:00.74 camalexandra Mean yeah, yeah, as much information as you can pull is best if you don't have a report to pull some of the things that you might want to see on this is like we said the item name how much you purchase it for the rental price. Um, I just made so far how many times it's gone out and how much it has how many times it's gone out like if you have four of ah of a piece does 1 go out more often than all four or does 2 go out more often than all four kind of understanding if you have multiple quantities. What is the most. Common and amount that goes out at 1 time and then if you do have multiple quantities how often does all of those pieces go out at the same time and so those are good things to kind of understand as well because when we talk about purging in a second are gonna be very very important to look at so those are the very that's the very first thing that you want to do is download some sort of report on your inventory Kayle. Why don't you go into our second step.
26:04.83 kaley Student. Yeah, so after you have your report and you have all that information in front of you. Um, you're gonna want to look at what your pricing was and start thinking through what your increase is going to be so how cam and I did this this year and years past I'm a visual person. And so we would literally like walk through the warehouse we would have our report. We'd walk through the warehouse. We'd look at all the pieces we'd say okay, this like this is what? Yeah yes and we'd be writing it down looking around and was it was.
26:32.60 camalexandra Thanks the 1 with their computer and someone had like a spreadsheet on a clipboard. Yeah.
26:46.79 kaley Good, but not as efficient as it could have been so this year what we did was kam and I set in a room together. We both had the spreadsheet up and we had the we had all of them listed at their categories. So they're all categorized together and we looked at. Each item line by line and what we did was with good shuffle. We have the ability to price our inventory by the day. Um by a 3 day rental a weekly rental and a monthly rental and so what we did was we looked at our day pricing and we readjusted our day pricing for each item. And then from there we calculated what we wanted the 3 day rental the weekly rental and the monthly rental for every single piece and we imported those pieces into or those new prices into our spreadsheet on every single item we have over 400 items in our inventory and so it was a very long process of kind of dialogueguing back and forth of this is what we charge based on this item I know the normal cost of goods or the standard pricing in our and in our community is this amount. Um, do we want to increase by this much or how are we going to increase and so there was a lot of conversation about okay this this cost and this cost and this cost and so we did that for all four hundred pieces.
28:12.63 camalexandra Yeah, and like she said we had to take into effect other costs. So we just added some backdrops to our inventory and we priced them a little bit higher for the very first rental and because to offset the cost of it like we said. What is 3 times the price right now and so it would normally cost me 1 ah hundred dollars to create a this is just an example if it cost me a hundred dollars to make a backdrop 2018 and 2019 it's now costing me about 3 hundred dollars. That's a big increase and that's just like an example of pricing that's not the actual pricing. It's a.
28:44.63 kaley See me.
28:50.58 camalexandra But bit more and and so that being said, we charged a little bit more for the very first 1 to offset that cost and so certain pieces we had to decrease our cost because we said you know it's not. You know we don't have to rent it for that much anymore and based on. Kind of all things accounted for it may have rented a little bit less often if we had it continued at that higher price and so that's why it's so important to factor in how many times it's going out how long have you had it in your inventory What's the quality of the product as well.
29:17.26 kaley Right.
29:29.28 camalexandra And that factors into a lot as well and there might be certain things that you need to keep the same price for a long time like the pillows for example, some of our smaller items I don't think we touched those prices we looked at them certainly and we looked at them. But we didn't touch those prices because we said you know what. 15 dollars for a pillow is still very streamlined I don't think we need to raise those to 20 I don't think we need to lower them to 10 and so we kept those the same and so there are certain pieces that you're going to keep the same just based off of the you know quality of it and based off of. The amount of uses and when it goes out but there could be reasons why you need to increase and decrease your items.
30:14.10 kaley Yeah cam do you want to talk about kind of our thought process and how we increase our pricing kind of how we got to different numbers and then kind of a few different ways that people can increase their pricing.
30:26.44 camalexandra Yes, so you can either do a across the board percentage based um, raise which is probably the easiest way to be completely honest with you because you can just say ten percent across the board is how we're raising prices and go off with that. If you are super super busy. You know you need to raise prices. You just don't have the time to put into raising your prices that might be a good option for you and you can try it and certainly see if that works for you. But if you have low amount of time. Low amount of and staff to be able to do this but high amount of rentals might be a good option so percentage base is the base option of how you can do that and then there's also the per item and and based on usage and based on the the quality of the product. That's how we did it is we went line by line. And did per item now we were able to do that because we have a staff to be able to do that and so if you are on your own and you are very busy. This might not be the best use of your time in the long run because you do need to get those bookings under you but you might be able to grow into the idea of. Per item of charging and so when we went through each of them. We typically have put our pricing at like a even number or like a five like a five at the end of it or a zero at the end of our numbers. Think on every single thing that we've done and so what we decided to try this time and um I think has been a good rule of them so far based on when we raise pricing and how we're booking things right now is that we change the pricing to be just under.
31:57.48 kaley This.
32:15.10 camalexandra What we our ideal price was and end it with a 7 and so why did we do that and I am am a mastermind student of a um guy named brendan brochard and he's a very smart businessman and I learned a lot of my education side of my business. Knowledge from him. He's incredible and he has this theory that says if you end a price in the number 7 versus the number nine or zero or five I hope you're sticking with me here. But if you end your price. So let's say you ideally want something priced at 400 dollars if you put it at 102 it has a little bit more likelihood of you renting that piece or buying that piece if you put it at 96. There could be a reason that they do it and that is more than the four hundred and but if you put it at 91 7 triggers something in your brain that says it's a good buying decision and that you're saving money and this is a theory that he has and it's worked across the board on so many things and so we did that with our pricing. So if we wanted something at 400 dollars. We changed it to be 3 hundred ninety seven if we wanted something to be. And hundred dollars. We either went with a one zero five or a ninety seven and so we flip flopped a couple prices across the board just to kind of test the theory out and so far it's been a good decision for us and so and we learned that from Brendan brouchard this is not cams. Way of doing this I am borrowing this idea. Um, and so we decided to ah raise our prices to a level and then adjust the actual price based on this 7 rule or ending your number in 7 rule and so that's kind of how we. Looked at our pricing and and let's talk a little bit about multi-day pricing because there's rent companies that do this very differently across the board and and your software is also going to be a factor in this as well. How you book your clients. This is also going to be a factor because there's certain softwares that allow you to do certain ways of multi-day and some that don't give you those options at others and so you do have to look at your software to see what your software actually can do and but there's a few different ways we've seen percentage based. Ah, charging for Rentals. We've seen per day and we've seen a multiplier based on how many days it is. There's so many different ways. Haley we you tell them a little bit about how we have done multi-day and maybe back in the former times of our business.
35:02.97 camalexandra What we were doing maybe a few months ago and what we've decided to do moving forward.
35:05.86 kaley Yes, like everything in business. We've tried multiple different things we have tried all of the above. We originally start out. Yeah, see what sticks.
35:13.37 camalexandra And it's important to note that you should try a lot of things in business. Definitely take definitely take our lessons lessons failures you could use either word. Um and what we've learned in the past and kind of base some of your.
35:22.49 kaley And.
35:31.55 camalexandra Decisions on maybe some things that took us a little bit longer to figure out but it also is really good to change things up and to figure out 1 way of doing it does it work for you does it not work for you and if it doesn't let's figure out another way to do it. So what? Kaylee just said of. Hey we've tried multiple things that's a good thing not something to be ashamed by at all.
35:50.58 kaley Yeah, absolutely well and business changes too. I mean your clients change the request that you get changed when we started out to multi-day. The only reason we added multi-day and those multiple different pricing is because good shuffle allowed us to.
35:58.11 camalexandra Okay.
36:09.48 kaley And so within good shuffle. It gives you the option to price daily. It gives you the option to price by multiple days. It gives you the option to price by percentage and all of these different configurations of pricing which kind of widen this door of oh should we be charging Multi -day we hadn't really needed to do it whenever we started with good shuffle. Um, if we did there was like 1 or 2 clients who wanted it for like a 3 day period and then we were like oh we'll just we'll just up the pricing manually and we'll just think about you know if it's cost this then we'll just increase here and so. We started out by charging pricing for Multiday by essentially taking the daily rate and then just multiplying it multiplying it by 2 multiplying it by 2 multiplying it by 2 and getting to the monthly rate which um, our monthly rates were. A bowl based on the time that they were spending with the item based on the actual like day rate but they were significantly higher like we're talking like a sofa was in the six Thousand five thousand for a monthly. Whenever you really break it down after you do the math. It really isn't that significant of a cost. But for our client it was sticker shock I mean it was like whenever we would send a quote or somebody wanted something for a month they were like we can't do this and we would have to talk to them about well the reason this is.
37:39.12 camalexandra Um, yeah.
37:45.64 kaley This way is because you're taking it it out of our inventory for 30 days and we're just trying to cover the cost of that and you know this is what it costs. Yeah, so we started doing it that way and the more we started getting more clients who needed things for week longs or
37:54.77 camalexandra Right.
38:04.14 kaley Needed things for month long so the more I was having to manually go in and adjust and look at the pricing and discount and kind of just based off of my knowledge and based off of you know, kind of honestly like what fit the client's budget. We would kind of budge and change. Um, and it was just getting to a place where it wasn't really efficient for our team because now we have multiple people doing sales on our team. So. It's not just 1 person just making the decision and so we transitioned over a few months ago to doing percentage based and we were charging.
38:24.39 camalexandra Right.
38:38.76 kaley Percentages for 3 day rentals weekly rentals Two Week rentals monthly rentals and what we found is they were taking the they were taking the percentage of the day rate and we were making. Absolutely nothing off of that percentage like we're talking maybe 1 hundred dollars 2 hundred dollars and so whenever you start to think through that you're like well like that's not really covering costs at all. They're getting something significantly cheaper than what.
39:07.21 camalexandra Today right.
39:14.33 kaley They're actually paying for you know and so we started thinking through Okay, well this just this isn't really working and it's confusing because there's all these different multiple layers and you kind of have to figure it all out and so basically what we decided as we were increasing. Our pricing was hey. It makes the most sense for us to charge by those certain time frames but we just need to adjust how we increase those and so we looked Again. We looked at our day rate and then we started to increase those pricing. In a way that it wasn't this significant double double double double to where it's thousands of dollars. It got to a place where it was more affordable to have a monthly rate and now it just makes a lot of sense.
40:00.63 camalexandra Right? Yeah, definitely and and so again, a lot of that's going to depend on your software I know that there's other rental softwares that don't have the option of doing the 1 day 3 day weekly and monthly rental rate. And so definitely talk to your software company and talk to some of their people on their team and to see what they see with their own clients the other rental companies that are also utilizing their software and then what they are set up to do as Well. So and definitely heavily rely on your software to kind of give you some of that information. And use it as a resource, not a solution and and then decide what you want to do for your business. Most software is you can really kind of do whatever you want to do? Um, and you just make adjustments on your end of that so doubly look at your software and see wait. Be there and okay, let's.
40:50.69 kaley We.
40:56.41 camalexandra Before we move on to purging. Let's talk for a brief moment about pricing. So I know this is mainly product based in this episode but we can't look at all of our pricing and not consider our other pricing as well. Our damage fees.
41:11.91 kaley We need to finish talking how we implemented the pricing.
41:15.10 camalexandra Oh you're right? You want to go ahead and do that since you implemented all okay boom go back.
41:19.90 kaley Sure. Yeah,. So once you have kind of figured out all the pricing and all the structure and this is really key Here. You want to make sure that you're doing all of that adjustment and thinking through all of that pricing on a spreadsheet even if you have it. Where you can implement it into a software you want to have all of the ideas and like taking the time to spend figuring out the new pricing on a spreadsheet. So then you can implement into your software because if you start doing it all within your software. And simultaneously you are sending quotes your client or your other sales team is sending quotes then your pricing is going to be just like all over the place and honestly based on experience you can get decision fatigue on.
42:12.23 camalexandra You see.
42:12.31 kaley What your new pricing should be and so it might take you a few days to price out the new structure and then honestly it's going to probably take you a few days to implement depending on how much inventory you have and so 1 step that we made sure that we communicated in this process was hey. We are going to be working internally on what our pricing structure is going to be and we are going to send out an email to all of our current clients who have pending proposals and we're going to let them know hey we are getting ready to increase our pricing. Um, we are we can honor your current pricing until x. Day we gave him about a two week period and said we are going to honor your pricing until this time and then on the following Week. It's going to automatically adjust to your new pricing and so that 1.
42:50.83 camalexandra Um.
43:04.20 kaley Let our clients it gave them a healthy expectation of what was coming. We communicated with them. We let them know you know we increased due to inflation and just increases in the business and it also churned out a lot of confirmed orders. Because they wanted to secure those pricings and so if you're in a place where you are kind of a little bit slower but you have a lot of quotes out this might be a good strategy for you to secure some of those bookings especially if you have them for next year and they're just being really slow to book with you. This could be a really great strategy for kind of landing those clients but what I did from there was we took our spreadsheet and I spent 3 days going through and manually putting in all of the new pricing for every single item. And I let our sales team know hey I'm just gonna let you know I'm working on these pricings I'm trying to get these done as soon as possible. So that all of your pricing makes sense in this standard for all of your clients, but it is gonna take me a little bit of time because we do have a lot of inventory while I was putting in. All of the new pricing. It was the perfect time for me to review all of our inventory statistics and data and all of that and so I made sure that every single item had a description if it didn't have a description I assigned a task to our marketing team to write descriptions for each item that didn't have a description. I made sure all of our dimensions were correct and we had included all of the amount of money that we spent to acquire the product so that we can go back and have smart buying decisions later or just smart tracking decisions and so if there was a dimension off I assigned it to our warehouse team. Um, to go and get those dimensions and upload them and then I looked through every single item and I made sure that there was a secondary image or a third image of it at a real event and so it took me a long time I think it took me about 3 or four days to go in and do all of those steps. But. Was well worth it because now all of our pricing is consistent. All of our imagery is consistent. People can see and they can actually read about what the product is like and what it looks like and how it can be used at an event and so our website is way more user friendly than it was.
45:28.56 camalexandra Right? And that's really good to go through at least once a year because you're gonna get new photos of your products at events and perhaps you uploaded a photo a year ago that was a really great photo at the time. But now you have a better photo for that or maybe when you added the product.
45:29.22 kaley 2 weeks ago.
45:48.51 camalexandra You know 6 months ago, maybe something didn't get added like the dimensions or something else and so that's just a really good time to come through and just as sure it's a lot of data like a spreadsheet ah a budget sheet a lot of data. So is all your inventory. It's just a big datasheet inside of a software.
45:58.51 kaley Um.
46:08.24 camalexandra If you're utilizing 1 and so it's just really good to make sure that those are correct so that next year in the following year and the following year and the following year that you have those good stats to go on and kelly mentioned having it in an excel spreadsheet this is super super important so you can go back a few years ago and say hey we. Originally had this price at this then we increased it to this then we increased it to this burx is hey what did we increase that to back in 2018 or 2019 I can't remember how we did because your software isn't going to keep that old price in there and it's probably not going to be in an archive anywhere in your side. Inside your software so you want this spreadsheet that you can go back and remember what you were doing on that if it comes up that you need that information. It's just good to have that data stored somewhere inside your drive or inside your dropbox wherever you store all of your all of your backend stuff. So.
46:52.17 kaley Great.
47:02.51 kaley The ship.
47:05.44 camalexandra Don't just do it through your software. Also do it on excel spreadsheet or Google Spreadsheet or I'm sure there's other options out there nowadays and and then Kaylee also mentioned communicating with your team. As well when you're implementing because this process can take a while even if it's just a day or 2 It's still some time that's going to take you. So if you have a team.. It's just good to communicate with them hey I'm in the midst of doing this this might affect you and your work and so just. Being high in communication with those who this is Affecting. It's very very important and and don't pressure yourself to get it done so quickly either if you need more time to do it because you're riding so low and you don't have a team by all means take your time doing it and this is shouldn't be.
47:53.00 kaley Yes.
47:57.80 camalexandra Too much of a rush process. Especially if you're doing it item by item and if you're doing percentage base. It shouldn't be shouldn't be as long of a tedious process but and don't pressure yourself. Don't don't feel like you have to get it done in 2 seconds it can take a little bit of time and that is certainly okay. Don't want you to stress yourself out about it. But it does need to be done and all right. Let's move into other things that we might need to increase prices on as well. So a lot of this episode has been product based increases but we do need to also look at our service fees. And just any other fee that you and look at across the board and inside rental bis academy which is our signature online course I actually teach our students nineteen or twenty different fees that you can and that are being utilized by rental companies throughout the world. Not that you have to have 20 fees in your in your business. We certainly don't have 20 fees that we charge we probably have what would you say maybe 10 at max that are options to to charge every order has yeah 3 that are standard but.
49:04.65 kaley Um, yeah, 3 are standard. Yeah.
49:12.30 camalexandra We have maybe up to 10 that are like 1 ne-offs for certain circumstances. But I teach you about twenty different fees that you could charge in your ah in your business inside of rental business Academy highly recommend checking it out and but if you have fees as well which you should. Don't have a business without other fees. We might need to look at what the increase should be for those as well and there are certainly standard ways that people charge for these things such as your delivery fees your install fees. Your. Mileage fees the damage wager fees. Those are some pretty standard ones and and so if your price of labor is going up or your price of and maintenance might be going up or prices of other things outside of the product itself. Going up in inflation then it might be good to look at your additional fees and how we increase those. So for example, if it costs you more to maintain your product your damage fee might need to increase just slightly if your labor in what you charge or what you pay. Your hourly staff to work goes up, you might need to increase your labor charges if the price of gas for example, goes up, you might have to increase your mileage ah fees. There's a lot of different things that you do need to consider in your business outside of just the product based items. But there's also a ton of other things that are in your business that you have to take a look at.
50:48.34 kaley Side note something very interesting. Good shuffle Actually just did a poll of our all of their users on the most common way that people are charging for their service fees and they did the options were they you do a flat rate fee Plus mileage. You do percentage of your product total or your order total or you just do like a flat rate um charge and the most popular and most common 1 was doing the flat rate charge plus your mileage which is what we do and so thought that was very interesting.
51:23.95 camalexandra Yes, yeah, there's so many different ways that you can charge for all of your labor and your service fees but figuring out what your cost is before you start looking at your fees is really important. You can't just look at all your. And other people in your community and what they charge for those fees and just say oh I'm gonna do that because they might have a different side of expenses associated with those fees than you do every single business is different if you replicated our exact same business and put it in houston. Be a different set of ways that we do it in Houston versus here because it's different expenses. It's different areas. It's different location even if you take the exact same business and so you do need to look at what your business in your location and your community is doing and what your expenses are before you charge your fees. It's gonna be different across the board, especially in different sizes of cities too like we said in new york in Dallas and longview those are very different types of areas and so the price of gas I'm sure is probably above five dollars a gallon in new york maybe more I don't know. I don't live there for a reason. Um, not only because of the yankees which by the way they've lost the other night. Thank goodness. But and anyways side note there's a lot of difference in all of the areas that we're in so just take that into consideration and. Right? The last thing that we're gonna get into on this episode if you've made it this far. We've been recording for a long time It's very exciting but it's very important that we touch on purging your inventory now this is where when we talked about in the very beginning of this episode understanding. Not only the prices and how much you paid for the product.
53:05.60 kaley And then.
53:16.15 camalexandra But how many times it goes out. This is really really important Kaley do you want to jump into this 1
53:22.13 kaley Yeah I mean if cam always talks about if something is in your warehouse and it's not making you money then it is not paying rent. It is not utilizing the space. Well that is sitting on and you could probably have something else and it's replaced that and it's It's place that could be generating you income and paying back what it should be paying you and so there are often times where you know we do. We look at our inventory and how it's churning out more than just once a year when we look at our pricing we're looking at this. Probably quarterly I'd say and just keeping a pulse on like what's going out. What's you know What's kind of happening and if there are some seasons where we are kind of a little bit slower and.
54:04.23 camalexandra Are.
54:14.76 kaley Things aren't churning out as much. We'll start looking at our inventory again to see Okay, what marketing strategies can we change up like how can we be pushing this piece or if it's it's something that we talked about several times before then that's the point where we're like okay we finally just need to.
54:30.67 camalexandra And yeah.
54:33.70 kaley It's like it. It needs to go away and so pricing like when you're going through your pricing. This is the most strategic time for you to look at purging inventory. But you should be looking at this throughout the entire year because it's just a good business strategy on making sure that all of your products are being rented and. Um, you're making the most amount of profit that you can on the piece that you have and so 1 of the ways that we purge pieces is we will sell them on Facebook market we'll reach out to our clients and let them know hey we're selling these pieces does anybody you know, want them or does anybody. Purchase them or we'll reach out to other rental companies and say hey we have this bulk amount of inventory items that we are selling. Do you want to purchase in bulk from us or sometimes we'll do ah we've done in the past we've done like in-person warehouse sales where the people will come in. Um, we'll market it and it'll be this whole thing where it's like a gard deal but in your warehouse. But most recently we've been doing a lot of Instagram sales where we'll take a if we have a lot of pieces that we're selling or even just a good amount of pieces that we're selling. We'll post them on Instagram and try to.
55:51.28 camalexandra Yeah, and 2 things that I will mention through this purging process is 1 We just came out of a really really slow year and so when you're pulling how often something went out. Do take that with a grain of salt of last year that product may not have gone out.
55:51.37 kaley Turn them out that way.
56:09.12 camalexandra As much as it did in 2019 and that's okay, it may need a little bit more time to make that decision on and but also the pandemic started about a year and a half almost 2 years ago and so trends back from pre pandemic to now perhaps changed.
56:13.95 kaley Um, because.
56:28.15 camalexandra And so if you have items in your inventory that you had pre pandemic maybe take a look at are those things that are rentable again are people still liking that style or has the style changed as well and so to kind of take both of those ideas as you're looking through this purging process. And don't just purge something because it hasn't rented in the last year and a half we also went through a pandemic so clearly things weren't renting as much last year and instead definitely make sure of that and then as always we talk about when we purge things. Perhaps it doesn't necessarily need to be purged. Maybe it needs to be taken with a different photo if you have a crappy photo of an item. Perhaps it's not renting because people don't know what it looks like so maybe look at retaking the photo renaming it maybe and I'm going to give this example so there is an association here local. Um.
57:08.14 kaley Um.
57:25.38 camalexandra Pre like taliban and stuff called Isis and it stood for international and like sales and events or something like that association. Well then there was a terrorist group called Isis that started so they had to change the group from Isis to Aiya. And so not saying that you have something in your inventory that is like terrorism like that. But you could have something named something that might offend someone or might and be politically incorrect or it might be something that prohibits someone from so from buying or renting from you. Because of something the way that it's named the name. It's ah the way it's priced things like that 1.
58:04.10 kaley Or yeah, it were it just may not describe the product. Well you know like what you thought automatically was a good name for the product could just be very confusing for a client you know if it's yeah.
58:17.66 camalexandra Or a use for a product as well. You might have bought something. That's really great as a cake stand but perhaps people don't even use it as a cake stand. Maybe they use it as a riser and so your descriptive word of your item needs to be changed. Maybe.
58:25.14 kaley Um, right? yeah.
58:33.40 camalexandra Common thing to call a sofa in your area is couch or love seat and you have it named as a sofa and people are like sofa what is that and so I don't think people would say what is that to a sofa but perhaps the way that you describe your product or the intended use that you buy the thing for. Needs to be changed as well like you might have bought something for a cocktail table or a high boy but instead it works better as a podium instead and so just looking at that is just something to take a look at before you officially say buy see a later to the piece.
58:53.45 kaley Yeah, absolutely.
59:12.14 camalexandra Um, perhaps you might also need to increase the marketing on it as well. There's been certain pieces in our past that maybe we just didn't like it as much or maybe it just didn't rent as much and we thought well you know it's probably been about a year since we market it. We don't see it on our Instagram anymore and so people might forget that we had. Had it and a few years ago I went to a networking event that our company sponsored and we had acrylic pieces probably for about a year or so before um I went to this networking event and I was there and someone was saying oh who are you and I said oh I'm cam um with former. Beautiful vent reolds now render then came with this company and they're like oh what do you do? I'm like oh actually all this rental stuff that you see here. That's my company and so we do sofas and we do blah blah blah blah and she was like. The acrylic. That's yours you do acrylic and like we've done acrylic for like the last year so yeah we do acrylic and then we looked at our Instagram we're like it doesn't show that we do acrylic. So no wonder people don't remember that we have acrylic pieces and so perhaps it's a marketing thing. Maybe that's why it doesn't rent as much so understanding. Why. It's not renting is just as important to um, should we purge it or should we kind of rework that item as well. So lots to do with purging but it is certainly a part of this conversation when we're looking at our inventory.
01:00:34.44 kaley Yeah.
01:00:39.68 camalexandra All right? Kaylee any final thoughts before we wrap up this episode all about purging pricing and increasing.
01:00:45.67 kaley I think just remembering I I know cam talked about it at the very beginning but the whole reason that you were going through this process and you're thinking through these things is just to be profitable you know and just to like really care. For your company care for your products care for your people and that comes through profit and that um, unless you're a nonprofit like you are in the business of making profits so that you can thrive as a business and the people around you can thrive in your business and so I just It can be a sticky topic. You know it can be hard to tell your clients hey we're increasing our pricing. But really if you're if you're really thinking through the quality that you're performing and the projects that you're producing. It shouldn't be this really Sticky. You should be really proud of. Leveling up what you are serving for your clients.
01:01:44.47 camalexandra Right? All right? Well I'm so glad you've been around for this episode and if you are not at a place where you're ready to increase your pricing go ahead and bookmark this episode come back to it and and you might bookmark it for a year now maybe you'll do your price increasing now and you need to come back to this episode in a year so thanks for being a part of this episode and we will see you next week bye guys
