Calculating The Real Delivery Costs In Your Rental Business: Equipment

Before I continue, let me just mention that this exercise is to calculate your real delivery costs. We’ll talk more later about how to calculate your delivery fees.

For now, let’s just find out the truth about what you’re spending to get your fabulous rental collection from Point A to Point B. I know it can be scary to see the real numbers in black and white (or red!) but this will help. I promise!

After you’ve done the math about the truck costs, let’s start thinking about equipment. In your rental business, I’m sure you’ve got some tools and material that make your packing and delivery process smooth, efficient, and safe.

Once you’ve got a pretty comprehensive list, think about how long those items last. To keep things simple, let’s talk about them in terms of your average delivery.

For instance, if in your average delivery, you use 3 card board boxes (at $1 each), 1/2 a roll of tape ($3 per roll), and some shrink wrap (let’s say about $12 worth), we’ll call your variable expenses $16.50.

Then, you’ve got equipment that lasts a long time. Perhaps a dolly (cost $50 but will last for 300 deliveries), reusable boxes (5 at $20 each, will last 200 deliveries), and straps ($50 for a set that will service your average size delivery 300 times before needing to be replaced). You’ll also want to remember themoving blankets. Perhaps you’ll need 20 of those with an average cost of $7 each but they last for about 100 deliveries (total of $1.40 per delivery). The equipment costs per delivery will be about $2.35.

Let’s call all of that together $20 just to keep the numbers easy.

To recap, we’ve got a cost of

$80 per delivery for the truck

+

$20 per delivery for equipment and materials

Stay tuned for upcoming posts about fuel and labor costs for your rental business.

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