Businesses in the Event Rental industry have experienced an increasing trend of fierce price competition, and extremely low rental rates being offered, since the global recession began. In an effort to bring in new rental business and close sales, many rental companies are offering discounts on event rentals, often well below the regular prices, undercutting the profit margin that many established Rental Companies need to stay in business.
The situation may be compounded by the fact that there is too much rental inventory out there, and too few jobs. The ability to purchase cheap products from countries like China, makes it easy for newcomers to get into the rental market, and is partly the reason for the saturated, and cut-throat event rental business.
This then leads to the business offering super low rental prices, just to make a sale. They sacrifice quality and service to do so. Often these businesses are inexperienced to handle an event, and don't have a full rental inventory to cover the entire needs of an event. They may also be operating without proper business licenses and insurance, possibly putting an event, or guests at risk.
In an effort to retain customers, and stay in business, established Event Rental Companies are often forced to follow suit, and cut their own prices. Or companies try to get around the situation in other ways. One method that's been adopted has been to offer a big discount on some rental products, like chairs, and then rent out other items, such as decor or specialized items, like a portable dance floor, at the full rate.
Some businesses have had to really streamline their business expenses in order to keep up. Fewer staff, cutting back employee hours and benefits, and reducing other business costs such as advertising, building leases, and delivery vehicles, can help keep rental businesses competitive.
Still, sometimes event organizers approach rental companies with such outrageous quotes they've received, that there is no possible way to compete. Other times biding wars ensue. In many cases this leads to a lower quality of service from Event Rental Companies trying to beat their competition, and ultimately the customer trying to cut costs, loses in the end, sacrificing the outcome of their event.
Even so, there are those Event Rental Companies out there who refuse to engage in the bidding wars, and focus on having a superior rental inventory, and excellent event planning and services, which they offer for their full rate. These companies may miss out on some jobs, but in the end people come back to them, and remain loyal customers, after experiencing the sub-standard service of the discount vendors.
The important thing to remember in all of this, is that it is always better for your business, in the long run, to offer outstanding customer service, over a cheap price. Yes, you will need to educate your customers on why it is important for them to pay more money, but have a flawlessly organized event, as opposed to just getting rentals for cheap. But in the end, they will become loyal customers, who will come back to you again and again, and your business will be the one left standing.