Fancy a sneak peak behind the scenes at Library of Things?
In this blog Emma, our Business Director and Mirela, our Business Analyst explain the process behind the prices we choose for our Things.
Deciding on a borrowing price is a delicate balance.
We always start with what makes sense for borrowers. It’s got to be much more affordable than buying the item, and hassle-free, so there’s never any hidden extra costs!
Here are the 5 simple steps to deciding the borrowing prices of our Things:
We start with a formula. We calculate 5-10% of the purchase cost (RRP) to find the daily borrowing price. This means it’ll always cost a fraction of the price to borrow rather than buy.
We use common sense. Will someone pay £20 per day for the GoPro camera, if they’re likely to be taking it on holiday for a week? Sometimes we reduce the price further if we can, like including a discount if you’re borrowing the Thing for a week or more.
We apply a 25% discount for concession members. 1 in 5 borrowers have chosen this membership so they can access the Things more affordably.
We build in an allowance for extras. All prices include insurance for borrowers and consumables, like sanding paper, carpet cleaner tablets and strimmer cable, so the Thing is ready to use as soon as it’s collected.
We check the numbers stack up. We forecast how many times each Thing is likely to be borrowed over the year. (We’ve been lending Things for 3 years now, so we have lots of data to help us do this.) Then we check that the total income and the prices we’ve set will cover our key costs, like sourcing new Things borrowers want, fixing or replacing old Things when they break, contributing rent towards our Host Spaces and resourcing a local Community Activator staff role.
Take the cordless Bosch drill. It’s £160 to buy, or £7/day to borrow from Library of Things – a saving of 95% for the borrower.
It comes in a sturdy carry case, with drill bits, a charger and how-to guide, as well as insurance to cover borrowers in the worst-case scenario that it’s stolen or they injure themselves (or their property) at home.
It’s the best quality drill we can find, we’ve tested many others over the years and nothing’s come close to its durability and ease of use.
We source it directly from Bosch, one of our suppliers. We negotiate a discount to help ensure we can keep prices as low as possible for borrowers.
It’s serviced every week by Alan, our Thing Wizard, and a team of Thing Fixers who make sure every Thing is working and ready for the next week of borrowing. We might replace the batteries every year, for example.
Are there discounts for longer term borrows?
We’re experimenting with this – you can borrow Things for 7 days and you’ll pay for 4 days. This works particularly well for Things like the sewing machine, dehumidifier, Nintendo and GoPro, as people like to borrow them for a week rather than a day.
The only Things you can’t borrow for a week are the carpet cleaners and the pressure washers – because they’re so popular!
How do we make borrowing accessible for everyone?
We set the prices as low as we’re able to. And we provide a 25% discount for concession members, who might be less able to pay the pay-as-you-go price – maybe they’re unwaged or on low income, retired or a student. You can tell us if you’d like more affordable borrowing when you sign up.