Keeping track of the product inventory is one of the most crucial jobs of rental shops, because a significant part of the profitability is tied to figuring out, how to make the most out of the products in the inventory. One of the most useful metrics for inventory tracking and management is the number of rentals per product. This simple metric provides useful information and support for daily operations, business development, and calculating financials. For example, it can help identify
- maintenance times and statuses
- the best time to sell the used products
- the most popular products
- the break-even point
Maintenance times and statuses
Properly maintained products are mandatory in order to provide safe and good rental experiences. You can also increase the life cycle of products significantly by giving those good care. By knowing how many times each item has been rented out since the last maintenance, you can plan the future maintenances in advance so that your whole capacity is in use during the busiest business hours.
In Rentle, you can also add maintenance time for each product after every rental. The feature keeps the product blocked for the chosen time after the previous rental has ended. This feature is meant to be used for quick inspection and preparation of the product for the next customer rather than giving the product a full maintenance.
To stay aware of the bigger maintenance requirements, we recommend to use the Inventory management tab on the Products page. There you can see, how many times each item has been on rental and add notes about the properties that you want to systematically track (e.g. maintenance time).
🚲On the Inventory management tab you can edit the Product IDs and inventory status (in stock/out of use) for each product unit. You can also add properties that you want to track systematically and see how many times each product unit has been on rental.
Optimal time to update the inventory
The products that are too scuffed up for commercial renting purposes can still provide value for someone. A common practice especially for seasonal rental shops is to arrange a used goods sale at the end of the season. That's a simple way to arrange the sales of the used products. However, in many cases it can be logistically easier to update the inventory continually rather than all at once. Use the earlier mentioned Inventory management tab in Rentle to track the number of rentals and recognising the optimal time to sell products.
The best selling products of your inventory
By analysing the number of rentals on a product level, you can recognise the most popular products, sizes, and other variants which makes the planning of the future equipment investments more justified. On Rentle's Reports page you can see the best selling products and the revenue per product on a month or day level.
📈On the Reports page you find a list of Top products (or product sets) based on revenue. From the table you can also see the number each product has been on rent.
NOTE: To enable tracking of the rentals on a unit level, each unit must have a unique product ID. Rentle creates each product a unique ID automatically, but it can be changed easily if your rental shop uses for example barcodes. And yes, Rentle supports barcodes.
Break-even is the point where the total cost and total revenue of an investment are equal. In other words, when an investment turns profitable. When you're investing in new equipment, you should have calculations and estimations, how many rentals you have to make at different prices to hit the breakeven. We are not yet able to provide you with that information (maybe in the future we are) but it is relatively easy to calculate by yourself.
A simplified example
For instance, a rental shop buys a bicycle for 500€. The price of a one day rental is 30€. However, the variable costs (e.g. storage, labour, marketing, etc.) to make the rental are evaluated to be approximately 10€ for one rental. Thus, the gross profit margin per rental for that bicycle is 20€. To calculate the breakeven point you have to divide the fixed costs (500€) with the gross profit margin (30€-10€=20€). In this (very simplified) scenario, to reach the break-even point, the bicycle must be rented out 25 times (500/20).
Obviously, the real world scenarios are never this simple. Not all rentals are one day rentals and the variable costs also vary from case to case. However, the point of this example was to demonstrate, what is break-even point and why knowing the exact number of rentals per item is mandatory if you want to recognise when a product reaches the break-even.
How does a rental software help in inventory tracking?
With a paper calendar and spreadsheet, tracking the number of rentals is quite a hefty job because the information is so spread out and collecting the data must be done manually. A rental software, such as Rentle, keeps track of the number of rentals automatically and all you need to do is to make your own conclusions based on the data.