How Profitable Is a Dumpster Rental Business?

money raining down in green dumpster

Dumpster rental may not be the first thing that comes to mind when most people think about becoming entrepreneurs. However, when you consider that this is a business that involves a practical, necessary product, it becomes easier to see why people choose this niche.

Like other businesses, to be profitable, a dumpster rental company must generate more revenue than expenses, maintain good credit standing, and have some excess to invest back into the company. A dumpster rental business might be right for you if you can manage these things.

How Profitable is a Dumpster Rental Business?

Total profitability depends on many factors that can change from region to region. The costs to buy your equipment, costs for your locations, and how much you can rent your equipment will change depending upon what city you are in.

Here are some example scenarios, however, to provide an idea of how profitable a dumpster rental business can be:

  1. If a dumpster costs $1500
  2. And Maintenance, Insurance, and Operating Costs cost you $750 a year.
  3. And you want to have a profit of 500%  – or $11250
  4. And you want to make that profit in 1 year,
  5. And you want to have a competitive price point with the local competition that charges it $400 per day
  6. You will need to rent your dumpster out 35 days a year at $386/day.

To hit $1 million in profit with a dumpster rental business, you would need to rent a dumpster 2900 times in a year at $390 days.

Let’s say you will need to buy 50 Dumpsters to keep up with demand.  2900 days sounds a lot, and it is. But think of it this way: how many days a year should all 50 of your dumpsters be rented out while still staying in line with your competition? 58 Days at $384/day for a rental. If you purchase 50 dumpsters for $1500 each — then estimate maintenance costs, insurance costs, and operating costs to be a total of $750 for each dumpster — your total costs will be $112,500. Thus, to reach 1 million in profit will require you to rent out 2900 dumpsters in a year, or all of your dumpsters out 58 days of the year.  Learn how to calculate your dumpster rental cost with Quipli’s equipment rental cost calculator!

How to Improve Profitability?

What happens if your roll-off dumpster business profit isn’t enough to sustain your business? In that case, you’ll have to take steps to increase your profit. Here are a few things you can do to help boost your margins.

Consider a Rate Increase

If you aren’t making enough of a profit, you might consider raising your prices. However, before you do that, it’s best to do some research. Here are some questions to explore:

  • How much are my competitors charging to rent the same dumpsters?
  • What is my current profitability for each category of dumpster that I offer?
  • Is there something I can offer to make a rate increase more palatable to my customers?

Just remember that pricing is a complicated issue. You have to ensure that people feel as though they are getting great value. Additionally, you must balance making a profit with being competitive.

Finally, remember that you don’t have to raise your prices across the board. Instead, you could raise the cost of your most popular dumpster category while keeping other rates the same.

Invest in Marketing and Advertising

Customer acquisition is a key factor in dumpster rental profitability. To get new customers, you have to find them, let them know that your business is interested in working with them, and convince them that they should choose your company for dumpster rental.

To get started with that, you have to identify the best platforms for reaching your potential customers. Your options include:

  • Television and radio advertising
  • Print ads
  • Paid or organic social media advertising
  • Billboards
  • Content marketing

Lower Inventory Costs

How much does each dumpster cost you? Remember that you must recoup that cost before you make a profit on any dumpster.

However, if you can lower the upfront cost of your dumpster inventory, you will begin to make money sooner. You may be able to do this by purchasing dumpsters and other equipment used.

Form Partnerships with Other Companies

If you can create some steady streams of income, this can transform your business. Think of the businesses in your market that regularly rent dumpsters. Now, imagine that you can enter into exclusive contracts with them to provide roll-off dumpsters at their facilities and work sites.

Reduce Costs

Finally, take a look at your expenses. Examine your insurance costs, maintenance expenses, and other factors to see if there are any opportunities to save money.

A Profitable Equipment Rental Business at Your Fingertips

You can turn a profit with your dumpster rental strategy. All you need are the right strategies and technologies. Quipli can make this easy. Check out Quipli equipment rental software to learn more!


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