Wanting to dress better than your own wallet would otherwise allow you to is not an unfamiliar experience for many of us. Unfortunately, clothes cost money and if everyone added every piece of clothing that caught their fancy to their wardrobes, we would have far more smartly dressed broke people in our midst. This gap that exists between what people want to wear, for whatever occasion, and what they can afford can be bridged by businesses which rent out clothing.
A clothing hiring service is an excellent commercial opportunity; one for which you would not have to look very far to find customers. For starters, there are many infrequent occasions which happen to have very specific (and usually costly) clothing requirements that people would find hiring to be far more economical than purchasing new attires. Examples are wedding and graduation ceremonies, black tie events, parties, photoshoots, auditions and even selfie sessions to name just a few.
Assess the competition
A business’ competition is not always those companies in a similar line of business to itself. Sometimes it is more useful to consider the competition to be those businesses which offer alternatives to your products and services. For instance, if your business is hiring out clothes, your competition will include conventional clothing retailers, sellers of second-hand clothes and—of course—other hiring services.
Considering all of the above-mentioned businesses as competitors should help you remember the few simple reasons why people hire clothes. For one, people hire when doing so gives them access (however temporary) to high-quality attires at a much friendlier price than the retail one. Depending on the individual and circumstances, this can also become true for any of the other mentioned businesses. For instance, a second-hand retailer selling something which you are hiring out at a price which is comparable to your rental one is a serious threat.
Remember that a rental service’s fees will always be compared to retailers. This means that the more that these retailers—whether they are sellers of brand new or second-hand clothes, authentic or knock-off ones—charge lower prices or offer attractive payment terms, the less attractive your own offerings would appear to customers.
Choose a market segment to target
It is always a good idea that your hiring service chooses a narrow market segment to pursue. Remember that clothes (and the people who wear them) come in all of manner of sizes, so pursuing a more specific market cross-section will allow you to meet more of your customer’s needs. In contrast, if you have an ill-defined target market, each one of the numerous attires that you stock will have to cover as many dress sizes as possible (to ensure a less frustrating customer experience)—this can easily stretch even the most impressive of starting up budgets.
The specialisation can also be considered as a way of choosing a market niche. There are many apparel hiring businesses which serve specialised customer segments such as those for wedding and graduation ceremonies, theatre productions, sportswear, choirs, bands, traditional attires etc.
You can also better design your business and its processes by coming up with a profile of your typical customer, whether current or desired. Your customers’ profile can include information such as whether or not they are busy people, their typical age groups and income levels. For instance, if you discover that your customers are busy people, you can offer them optional courier services to deliver and collect their hired outfits.
Besides individuals, clothes hiring business can also target organisational customers. Examples of these are schools, colleges, sports clubs, churches and companies. These can hire everything from sportswear to safety clothing for their students, members, congregants or employees as the case may be.
Finding a space
Much like a small-sized clothes retailer, an attire hiring service’s physical location will not only serve as its retail front but also as its storage and administrative base. The best situated retail locations, i.e. those with the best visibility and high-quality foot traffic, also tend to be the most expensive. However, these rental costs are often offset by the fact that relatively more money would have to be spent on advertising to pull in comparable volumes of customers from a different cheaper location. You must, however, keep it in mind that is located off the beaten path has its own advantages: for instance, many people would baulk at the prospect of being seen walking into or out of clothes rental service at a busy mall.
You can use the earlier mentioned profile of your typical customer to help you choose which clothes size to stock. You cannot just equally or randomly stock cloth item sizes; some size ranges tend to be more common than others, with the distribution of these sizes also depending on factors such as which age groups are under consideration. There are other factors which you must also consider when deciding on sizes to ensure that you only purchase what people will actually hire. You can also try to solve this challenge by surveying the popularity of an item across several age groups and body statues to buy the sizes in quantities which correspond to its popularity across the surveyed groups.
When deciding on your hiring fees, remember that almost all of your potential clients will steer clear of any figure that approaches the actual retail cost of the items. Your hiring fees must not only meet your businesses’ fixed and running costs but must also account for the gradual wear, tear and ultimately the short lifespan of its main assets. To put it simply, each item of clothing owned by the business must, during its service lifetime, be able to cover its own cost of the purchase in addition to its own share of the business’ profits and expenses.
Things which you must consider when deciding how to price your rental items include each item’s original cost of purchase, its popularity, the demographic most likely to hire it, an estimate of its lifetime value and how long it can remain hireable. The last two of these are related since the moment an item stops being hireable it also stops bringing in any value to the business—except for that obtained from its disposal which will be discussed presently. There are other item-specific costs which can also be considered such as laundry and minor repair expenses.
Deposits are also almost always necessary when you are renting anything out; they not only act as a motivator for your clients to keep the rented item in the best possible condition they can but they also cover some of the losses incurred when the client ultimately fails to do so. Remember that a new customer costs much more to acquire than a returning one so tries to avoid intentionally exploitive deposit policies as these tend to chase off customers.
Selling ex-hire clothing
A good hiring service must keep its stock new and up-to-date. This means that items should be retired after they reach a certain degree of wear and new ones be bought in their place. However since a good hiring service’s standard of wear is generally be far higher than that of an ordinary person, these clothes can generally still be sold and some of their remaining value recovered.