How to Price Rental Items (Free Event Rental Pricing Calculator)

Jump to Rental Pricing Calculator

1. Types of Pricing
2. Market Research
3. Pricing Calculator
4. Rental Pricing Formula
5. Other Costs to Consider
6. Best Practices for Rental Pricing
7. FAQs

One of the most common questions for new event and party rental businesses is how to price rental items and calculate rental rates. From tables and chairs to tents, staging, and AV equipment, pricing your inventory correctly is one of the most important steps in building a profitable event rental business.

Price too low and your margins disappear. If the price is too high, customers may look elsewhere. The goal is to find the balance that keeps your rates competitive while still supporting long-term growth.

In this guide, we’ll walk through how to price event rental items step by step, explain the most common event pricing strategies, and show you how to use a rental pricing calculator to set confident, data-backed rates.

Rent tools or construction equipment instead? Check out our tool & equipment rental pricing guide!

Types of Equipment and Party Rental Pricing

If you’re wondering how to price rental items, you’re actually considering party and equipment rental rates.

Two common rental pricing strategies used by rental businesses across the industry are flat fees and time-based prices. Each serves a specific purpose, and many rental businesses use them both for different kinds of rentals.

1. Flat Fees: Simple and Transparent

Flat fees, also known as fixed fees or one-time fees, provide customers with a straightforward and transparent price on their order(s). With this approach, businesses charge a fixed price for the use of an item or service for a set time. Flat fees are commonly applied to rental items or services with consistent costs and are typically used for shorter periods.

Advantages:

• Clarity for Customers: Flat fees offer clear and predictable pricing, making it easy for customers to budget and plan their rental expenses.
• Operational Efficiency: Flat fees simplify the rental process and reduce administrative complexities, benefiting both customers and rental businesses.

Example:

An audio-visual equipment rental company may offer flat fees for renting projectors for an event regardless of its duration because it makes a significant portion of its profit from the service of setting up and taking down.  

2. Structured Pricing

Structured pricing is a tiered, time-based option whereby the fees gradually decrease for longer rental periods.  This approach offers customers flexibility, allowing them to rent items for precisely the time needed. Time-based pricing is commonly used for items rented for more extended periods or when the rental business incurs variable costs based on the rental duration.

Advantages:

• Customizable Rentals: Time-based prices cater to customers’ varying needs, enabling them to rent items for the specific duration required for their events or projects.
• Revenue Optimization: Rental businesses can adjust time-based prices to capitalize on peak demand periods, increasing their revenue potential.

Examples:

A party rental company may offer daily rates for tables and chairs to accommodate multi-day events. The weekly rate may be equal to three days and the monthly rate could be equal to two weeks.  The daily rate decreases as the time is extended.  

An equipment rental company may charge hourly rates for customers who need power tools for only a few hours or monthly rates for projects that take longer.

What Kinds of Rental Rates are Most Common?

Most rental companies offer a combination of flat fees and structured pricing, tailoring their approach to suit the nature of their inventory and customer preferences.

Considerations such as the type of rental items, market demand, customer preferences, and competitors’ pricing should all play a role in determining the optimal pricing strategy. 

How to Do Market Research for Rental Pricing

In the context of a rental business, market research is the process of gathering and analyzing information related to the rental market, customer preferences, and competitor rates.

So, how do you perform market research as a rental business wondering how to set equipment rental rates?

Research Your Competitors

Break out that spyglass because it is time to do some digging! Start with your competitors. Ask yourself these questions:

• Do my competitors offer the same inventory I plan to offer?
• What are my competitors charging for services I plan to provide?
• Are customers happy with my competitors’ prices?
• Are customers happy with my competitors’ services?
• Can I charge what my competitor is charging, or less, and still come out profitable?

The answers to these questions will act as a great starting point as you decide what your rental rates will be. But here’s the thing:

Your competitor is not you.

When you see your competitor’s prices, your knee-jerk reaction may be “Oh my gosh, I have to charge less than this guy, or I won’t be able to compete!” and that simply isn’t true. But if you do plan to, or need to, charge more — you must be able to justify your prices with high-quality rentals and services.

You’ll also need to put in the work to rank above your competitors on Google and secure online traffic using a combination of Google Ads and organic SEO.

Take Advantage of Seasonal Markets When Pricing Rental Items

Whether you’re new to the rental industry or a veteran looking for tips on pricing equipment rental rates, most people know that the party and equipment rental markets are both seasonal.

What does this mean? Certain rental items may be in high demand during holidays, festivals, or weddings. However, you will likely experience lower demand during slow months. 

Peak Season Equipment Rental Rates

During peak seasons, when demand for rental items is at its highest, rental companies can, and often do, set higher prices. Customers are often willing to pay a premium to secure the items they need for their special events or projects. If you have limited inventory or availability, this is a great way to curb incoming orders and make more money while doing it.

Another common strategy during peak season is not to increase prices but to increase marketing budgets for Google Ads. Peak season is a great time to capture more orders from party and event planners who are searching for rentals online. This strategy is great for rental businesses with more availability who want to maximize their order intake and conversion.

Off-Peak Season Equipment Rental Rates 

Off-peak season is a little more challenging, as there are fewer orders coming in and a lot more competition. This is when it might be a good time to adopt more competitive pricing strategies.

Lower prices can entice customers who are cost-conscious or planning events during less busy times of the year. When you offer attractive rates during off-peak periods, you can increase bookings and revenue during traditionally slower times.

How To Calculate Rental Item Prices

Below is an oversimplified calculator you can use to get started. This will be the minimum daily rental price. Make sure to add in additional costs.

Rental Pricing Calculator for Event & Party Rentals

Please keep in mind that the above calculations are simplified and that you should consider your own business goals and needs when considering how to calculate the rental rate for equipment and other types of items.

This calculator is meant to give you a jumping-off point and shows one way that businesses can calculate pricing on an item. You must factor in market research and your company’s positioning strategy. For example, if your company offers white glove service, you should price it at a premium. Or, if your target audience is more price-conscious, you may want to lower the expectations for the service provided.   

Want to know how to calculate the ROI on your items? Check out our free ROI calculator here!

Rental Pricing Formula (Step-by-Step)

This rental pricing formula follows the same logic as the calculator above. It helps you calculate the minimum daily rental price you should charge for an event rental item based on your cost, markup, and expected annual usage.

This minimum price protects your margins. From there, you can layer in delivery, labor, and seasonal pricing.

Step 1 – Enter the Purchase Cost of the Item

Start with the total cost to purchase the rental item, including:

• Item purchase price

• Shipping and freight

• Import or handling fees (if applicable)

Why this matters: This is the full investment you must recover through rentals.

Example: Table purchase cost + shipping = $120

Step 2 – Apply Your Markup Multiplier

After you enter your purchase cost, apply a markup to determine how much revenue you need to earn back on the item.

Most rental businesses use a markup of around 1.75, which typically results in a 42.9% profit margin once costs are covered.

Example: $120 × 1.75 = $210 in target annual revenue for that item

This step ensures your pricing accounts for profit, not just cost recovery.

Step 3 – Estimate How Often You Will Rent the Item Each Year

Next, estimate how many times you realistically expect to rent this item in a year. This should be based on actual demand, not best-case assumptions.

Consider factors like:

• Seasonality

• Local event volume

• Storage capacity

• Past rental performance (if available)

Example: Expected rentals per year: 30

This step helps spread your investment across real-world use rather than guesswork.

Step 4 – Calculate Your Minimum Daily Rental Price

Now divide your annual revenue target by the number of rentals you expect each year. This gives you the minimum daily rental price you should charge for the item.

Example: ($120 × 1.75) ÷ 30 = $7.00 per day

This is your base item price only. Delivery, setup, labor, damage waivers, and other event-related services should be added separately.

Step 5 – Add Event-Specific Costs as Separate Line Items

Your minimum daily rental price covers the cost of the item itself. Event rentals almost always include additional service-related costs that should be added separately to protect your margins.

Common event-specific add-ons include:

• Delivery and pickup

• Setup and teardown labor

• Damage waivers

• After-hours or rush fees

• Venue access restrictions

These costs vary by event, so it is best to list them as separate line items rather than baking them into the base item price. This keeps your pricing transparent for customers and ensures you are paid fairly for the full scope of work.

Costs to Consider When Pricing Event Rental Items

Before you finalize your rental rates, you need a clear picture of what each item truly costs your business. For event rentals, these costs go beyond the purchase price and directly impact your long-term profitability.

Initial Investment

Your initial investment is the total upfront cost to acquire each rental item. This includes the purchase price, shipping or freight, and any setup or assembly costs required before the item can be rented.

For event inventories, this might include:

• Tables, chairs, linens, tents, staging, or AV equipment

• Freight delivery and pallet fees

• Initial setup, calibration, or assembly

This total investment is the foundation of your pricing strategy. It determines the minimum revenue you must recover over the life of the item to break even.

Maintenance Costs

Event rental items require ongoing care to stay safe, clean, and presentable. These maintenance costs should be factored into your long-term pricing strategy.

Common event rental maintenance costs include:

• Cleaning linens and fabric items

• Inspecting and repairing tent hardware

• Testing AV and lighting equipment

• Replacing damaged tables, chairs, or staging pieces

Estimate your annual maintenance and repair costs per item, then spread those costs across your expected number of rentals. This helps ensure your pricing stays profitable while your inventory remains event-ready.

Overhead Costs

In addition to inventory costs, every event rental business carries overhead that must be supported by rental pricing. These expenses keep your operation running smoothly, even when inventory is not out on rent.

Typical overhead costs include:

• Warehouse or storage space

• Insurance and licensing

• Administrative staffing

• Marketing and advertising

• Software and booking systems

These costs should be allocated across your overall rental volume so every order helps support the business, not just the inventory itself.

How These Costs Work Together to Determine Event Rental Rates

Every event rental price is built from the same three core cost categories: what the item costs to own, what it costs to keep it rent-ready, and what it costs to run your business.

When you pricing an item, you are stacking these costs together to arrive at a rate that is both competitive and sustainable.

• The cost to buy the item sets your baseline. This is the money you need to recover over time just to break even.

• The cost to maintain the item keeps it clean, safe, and presentable for each new event.

• The cost to operate your business supports everything behind the scenes, from warehouse space and insurance to software and staffing.

This approach ensures that every rental covers its true costs while still leaving room for healthy profit and long-term growth.

Best Practices for Pricing Rental Inventory

Offer Bundling & Discounts

Bundling inventory refers to combining related rental items or services into attractive packages. By bundling complementary items together, rental businesses create compelling offers that cater to various customer needs. Whether it’s a party package that includes tables, chairs, and decorations, or a multimedia bundle comprising projectors, screens, and sound systems, customers are drawn to the convenience and cost-effectiveness of these all-in-one solutions.

Offering discounts based on rental duration, bulk orders, or seasonal promotions encourages customers to choose your rental business over competitors. Whether it’s a percentage off for longer rental periods or special deals during slow seasons, discounts demonstrate your commitment to customer satisfaction while boosting your rental business’s competitiveness.

By combining bundling and strategic discounts, you can create a cutting-edge pricing strategy that caters to diverse customer preferences and fosters loyalty when customers feel like they are getting a good deal.

Gather Feedback from Customers

Before finalizing your rental prices, consider testing different pricing strategies or conducting a pilot run to gather feedback from customers. Monitor the performance of your pricing strategy and be prepared to make adjustments based on customer responses and market trends.

This can be done through surveys, focus groups, or one-on-one interviews. Ask customers about their perception of the pricing, whether they find the rates fair and competitive, and if the value provided meets their expectations.

Customer feedback is invaluable for understanding how the pricing strategy aligns with customer needs and preferences. It can reveal potential pain points, areas for improvement, and opportunities for further customization.

Choose Rental Software Carefully

A great way to maximize your profits and ensure that you are pricing your inventory well is to use a rental software that includes the following:

1. Smart reporting features that actually offer insights: A good rental software should provide you with profitability reports as well as payment reports that allow you to gain quick insights into which items are most profitable and who your best customers are.
2. Dynamic pricing: Look into rental software that offers dynamic pricing. Dynamic pricing should allow you a bit more flexibility when it comes to pricing your inventory, like customized and automated pricing adjustments, as well as flexible billing periods (calendar, 31-day, and/or 28-day billing cycles).

These features are a great way to stay on top of pricing, and help you ensure that you are getting the most out of your items.

Set Fair and Realistic Profit Margins

While it may be tempting to set rental prices as high or as low as possible, this can alienate price-sensitive customers and negatively impact your business.

Instead, use the data from these cost analyses to set fair and competitive rental rates. Factor in your business goals, target customer base, and desired profit margins to arrive at a pricing structure that ensures customer satisfaction while ensuring your business remains profitable in the long run. It is a good idea to add labor as a separate line item. That way, you can capture price-sensitive customers and offer high-end service to those willing to pay for it.  

By understanding the competitive landscape and aligning pricing strategies with customer needs, you can confidently set profit margins that support business growth and provide value to your customers.

Other blogs you may find helpful: 

How to Increase Profit Margins for Rental Businesses

How to Evaluate Potential Investments in Rental Inventory

How Much Should Rental Companies Charge for Labor