Each school year, tens of thousands of middle and high school students enroll in band programs.
These students all need instruments, and their parents often choose to rent them rather than make the financial leap to buy.
Music stores can capitalize on this demand by offering instrument rental for schools. By providing great instruments and a convenient customer experience, you can build trust with local band leaders, parents, and students — so you can continually serve musicians in the community for years to come.
In this blog, we’ll discuss the key benefits of offering musical instrument rentals for schools, and share five tips to help you get started.
Let’s dive in.
There are many benefits to offering instrument rentals for schools at your music store. Here’s a quick look at some of the advantages.
One of the biggest challenges of running a retail store is dealing with fluctuating sales. By offering rentals — especially to students — you can create a recurring revenue stream for your business. When a student participates in band class for a semester or even a full school year, you know you can depend on rental fees from them for several months. And with multiple instruments rented out, those fees can add up to a reliable monthly income.
These recurring fees also help cover the bills around your music store — especially if retail sales drop unexpectedly or if operating costs go up.
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Music services like instrument rentals tend to have higher profit margins than retail sales. Quality instruments come at a high cost, making it difficult for retail stores to secure wide profit margins, particularly when competing with major online retailers like Guitar Center or Amazon.
Offering rentals requires a significant initial investment. It can take time for rental fees to pay off this cost — sometimes up to a year per instrument. But once you reach this point, rental income becomes mostly profit, aside from occasional repairs and maintenance.
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Rentals allow you to serve a different group of customers than you might with sales alone. While some prefer to buy instruments outright, others choose to rent due to financial limitations or because they’re just starting out. By offering rentals for students, you make your music store a more accessible option for a wider range of musicians, increasing your potential for success.
Offering rentals can be a highly profitable endeavor, but only if you have the right strategies in place.
Before you begin renting out instruments, it’s important to research local demand. Start by determining the nearest schools with band programs, the number of students they have, and the instruments they play.
Remember: Research your competition too. Is there another music store nearby that offers rentals? Where have students been buying or renting instruments from in the past? If you find competitors, check their online reviews to see how customers feel about their service. Spotting weaknesses in their business model gives you a chance to improve and position your store as the better choice.
The best way to offer rentals is by investing in your own rental fleet. That said, it comes with a large upfront investment. To finance it, you might try to secure a short-term loan. You can buy the instruments, start renting them out, and use the rental income to pay it off. Once the loan is taken care of, you begin earning significant profits.
You can start with a smaller selection of instruments and gradually expand your rental fleet as revenue grows. Make sure to inspect your rental instruments regularly to keep them in good condition.
Alternatively, you have the option to partner with a third party for instrument rentals. They provide the instruments for your customers and pay you a commission for each rental. While this approach doesn’t yield the same profits as buying your own fleet, the initial investment is much less.
Taylor Harnois, the general manager of Music Shop 360, addresses music store owners who are hesitant to invest in a rental fleet:
“When you look at the grand scheme of things, if you can work through years one and two, from there, it becomes a whole lot easier. You’re seeing the revenue coming in and you’re not having to go to the banks every time you need to make an investment in a new fleet . . . the tools are available to you today for you to be successful in doing this.”
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When you introduce services like rentals, you need to set policies early to handle issues that may come up. If you don’t, you have to decide how to respond to each situation in the moment.
Be sure to set policies on issues like these:
Communicate your guidelines clearly from the beginning to avoid customer confusion. When you create a rental agreement, include all of these policies in writing so the customer can reference them as needed.
School band directors want their students to have the chance to rent high-quality, affordable instruments locally. If there isn’t a provider close by — or if current services don’t meet expectations — you can step in to fill this need. By proving that your business is reliable over time, you build trust with band directors, students, and parents.
If a band director trusts your store, they’re more likely to promote your business — posting flyers where students can see them and recommending your services to new students and their parents. These partnerships are highly valuable for music stores as they lead to consistent rentals and sales.
For additional advertising, you can sponsor an event for a school. If it’s open to the public, set up a booth and talk to members of the community about your music store.
Some schools pay for contracted repair work from music stores. For a specified amount per month, repair technicians make themselves available to repair students’ instruments when needed. This is another great way to bring in revenue and strengthen your partnership with a school music program.
To effectively manage instrument rentals for schools, you need digital tools to handle all the logistics. Modern point of sale (POS) systems are great for automating routine business tasks, and some include features to help you with rentals.
Look for a POS system that lets you track individual rental instruments by serial number. This helps you maintain a clear history of who rented each instrument and its service record. Make sure the system can also track rental periods, due dates, and late fees.
POS software often includes tools that help you communicate with customers by text message and email, too. You can use these features to send reminders about due dates to ensure they bring their instruments back on time.
Harnois notes how a modern POS system makes rentals easier for music store owners:
“We’re going to automate your billing. You’re not having to chase delinquent accounts all the time. The system’s going to handle a lot of that for you. They put the card on file, it charges that so you’re not having to chase the payments. You just watch the revenue come in.”
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Offering instrument rental for schools is a great way to serve more customers, add revenue streams, and earn higher profit margins. By implementing these strategies, you can expand your business and increase your success.
Music Shop 360 is a POS system designed specifically for music stores with the features your business needs to run smoothly. With our cloud-based software, you can manage inventory, offer e-commerce, and process payments, and handle rentals, repairs, and music lessons — all in one place.
To see what Music Shop 360 can do for your business, schedule a demo today!