Pricing in ShareGrid
I’ve had a lot of conversations with our members recently…a lot. I love getting feedback on what works, what doesn’t and I really get a kick out of meeting fellow colleagues and hearing their excitement for what ShareGrid is doing. One frequent topic of conversation is pricing.
The Rental House Model
Now, we like to think that ShareGrid is “changing the game” on many fronts. A 24/7 rental house, an online instant insurance platform, a connected community supporting each other and other features that make the ShareGrid community special. But if there is one thing gear owners on ShareGrid are competing with, it is the pricing model set by local rental houses. We spoke with a number of owners in our beta and they all said the same thing. They have to compete with local rental houses, therefore their pricing has to be lower yet their daily rental model as to be the same…or better!
What this means is that our owners feel as though they need to adopt the same rental formula as the rental house down the block. Weekend rentals for the price of 1 day, weekly rentals for the price of 3 days and so on.
In order to keep a competitive yet fair marketplace and get our owners the most rentals, we realized that we needed to structure our discount formula to be competitive in and outside of the ShareGrid marketplace. Plain and simple. And that’s awesome! Because not only does it mean the best prices in town but it means more profit for our owners due to an increase in rentals.
Nothing fancy here. If you rent for one or two days, you pay what you would think. For example, pick up is Monday, use of gear is either Tuesday or Tuesday AND Wednesday, drop off is Thursday.
If you rent for pick up on Monday, shoot Tuesday - Thursday and drop off Friday, you will be charged for 3 days.
The Full Week Rule (or 4-6 shoot days)
Just like any rental house, we’ve adopted a weekly discount. So if you rent with 4-6 days of use (shoot days), you only pay for 3 days. This discount has been pretty common among all of the leading rental houses in the industry.
The Weekend Rule
Weekend rentals will remain the industry standard 1 day rental. So if you want to rent with pickup to be Friday and drop off to be Monday, that counts as one day. if you decide to pick up or drop off within the weekend, such as Saturday or Sunday, it will be considered as 1 day. Take a look at the easy guide below on how weekends are calculated.
Pickup-Dropoff - Shoot Days
Thur-Fri - 1 day
Thur-Sat - 1 day
Thur-Sun - 2 day
Thur-Mon - 2 day
Thur-Tue - 3 day
Fri-Sat - 1 day
Fri-Sun - 1 day
Fri-Mon - 1 day
Fri-Tue - 2 day
Fri-Wed - 3 day
Sat-Sun - 1 day
Sat-Mon - 1 day
Sat-Tue - 2 day
Sat- Wed - 3 day
Sun-Mon - 1 day
Sun-Tue - 2 day
Sun-Wed - 2 day
Sun-Thur - 3 day
Our 20% Beta Discount
To kickstart a marketplace and get both sides doing business with each other is not a simple feat. The old chicken or egg rule applies, you need selection, price and convenience to attract renters and you need renters to attract owners to provide the gear. To get things going, during our beta launch, we are building in a 20% discount on all rentals for select communities. As owners, this may seem counterintuitive as you may have already priced your gear to market rates.
Keep in mind on average our discount motivates new renters to try ShareGrid and rent your gear over other options. Simply put, the discount will lead to more rentals and more money in your pocket. We will adjust the incentive when market forces come into play to keep prices fair for all parties and people rent on ShareGrid, but without the discount at the start you may never get a rental request and your gear will sit idle.
Below is a graph that displays the benefits of renting for longer terms. The longer you rent, the more you save. This is based on a % per day. Every day you rent, your cost per day decreases!
How Much Do We Charge Owners?
We’ve heard a lot of good feedback from our owners on what would be fair for us to charge to maintain and grow the marketplace. Our goal is to balance the needs of all parties – renters, owners and ShareGrid so everyone wins. Typical online marketplace fees range from 15-30% because even though there is no inventory, there is a very real cost to maintain the service, add features, and pay high credit card fees that are charged on the total rental amount.
We’ve modeled and projected the minimum fee we need to charge to grow ShareGrid and give everyone involved a fair shake, and have settled on 15% as the right number. This is what many other online marketplaces that handle real-world goods charge as well. As owners, you get to keep 85% of each rental without having to worry about marketing, credit card merchant fees, insurance, issue mitigation, and many other benefits that ShareGrid provides its members.
We will remain flexible and are always open to suggestions so if you have any questions or comments, please contact us and we’d be happy to hear them out and talk further.