Black Tux and Rent the Runway operate on a similar business model, offering rental services for high-end clothing and accessories. Let's check the main aspect of their economics:
1)Revenue Model: Both of them generate revenue through rental fees which is a fraction of the item's retail price.
2)Inventory Acquisition: They acquire their inventory through various means.
3)Effective inventory management
To calculate breakeven turnover and inventory requirements, the following points are to be considered:
1)Overhead Costs
2)Rental Fee and Rental Duration
3)Breakeven Turnover Calculation=Total Costs / (Average Rental Fee - Variable Costs per Rental)
4)Cost of Inventory