Seagraves

I've been thinking about starting a DVD rental store, but I wanted to hear your guys' opinions on some of the deals I'd have there, just to see what the "market" is gonna be like.

Frankly, I'm tired of having to pay $3.50 or whatever for DVDs that I get to keep for 5 days even though I'm only gonna watch the thing once, so I've decided I'm going to do away with that crap. I figure I'd rent DVDs for 75 cents a night, if you happen to keep them for 5 days, it's STILL only $3.75, but think of all the people who'll rent them and then return them for the MEASLEY price of 75 cents! Sounds like a deal to me.

Nothing complex - just simple simple stuff. Also ever month we'd have contests where the person who rented the most DVDs that month would recieve a free DVD valued at $25 or less.

What do you guys think? Would you do this?

Movie_Man

I would patronize that store provided they have sufficient inventory. But from a business standpoint, why would you want to undercut the competition by such as huge margin? Why not rent for even $2 per night? You're still half of what the big guys rent movies for.
Another common practice I see is to rent the old releases for about $1, and the new releases for more.
Then when you need to reduce your inventory of a title, you can sell them as previously viewed for $10.

jr.junior

you obviously don't know how "the competition" plays ball

Sleeping Beauty

i agree, movie rental businesses charge way too much for a movie, even if you don't keep it for five days. The two-day rental dvds always get me overdue charges cause if you dont watch it the first night you rent it, you basically have to return it the next day. A day by day basis for charging would be great, however you might run into difficulties if you don't have any rental limits. store inventory is a major plus, if there aren't a sufficient amount of movies it is very hard to stay in business.

RDYoung

Your concept would also imply that you paid upon the return of the dvd--not very sound concept in the rental business. Otherwise, if everyone paid 75 cents for a day, kept the dvd for 3, they'd always have a late fee, and that seems bad. Also opens up more avenues for controversy. When does the day start? Is it a 24 hour period? If you offer cash back/credits, it would be one thing, but I just think this would be difficult to deal with and monitor.

The two bucks for a few days seems more feasable, and probably better overall. I'd rather have it for more days(based on my busy schedule) than only one day. I would also guess that in the scope of a busy family, more days would be better, thus allowing more members of the family access to the movie that they rented.

By the way, I work at HW video, and quite regularly, we offer a dollar as an early return credit for those who want to return the new releases the next day. I would say that maybe(and that's a strong maybe) 3 out of 10 people actually do this conciously. Most people I tell about it roll thier eyes and say, "I never get them back until they're due."

Hell, I rent for free and appreciate the 5 days(because we pay late fees if they are late.).

Just some thoughts. Good luck!

Robyn

Jeraden

I thought about starting a DVD Rental store a couple times - usually on my way home from some other rental store and cursing the price I just paid.

I think you'd need to charge more than 75 cents a night though. At least make it like $1.50 for a 2-night rental and 75 cents a night after that. As long as they are $2 or under for 2 nights, I would shop at your store vs. any other. At 75 cents I think you'd lose money - thats a lot of rentals to break even - and scratches take your DVDs out of circulation relatively quickly.

You should take before and after photos of the surface of each disc you rent. If it comes back all scratched up you can see what it looked like beforehand and justify charging the bastard for ruining the disc. Thats the only way you can keep prices that low - if you have minimal disc damage costs you have to eat. On a couple occasions I've rented stuff within the first week of release and its already been so scratched up it would skip.

TheBang

Although the topic deals with DVDs, I think the subject matter being discussed is more appropriate to the Store Forum, so I'm moving it there.

Heat

The grocery store that I rent from on a regular basis charges $0.99 per rental, due back the next night by 11pm. If you are late, the late charge is $0.99/night.

Now, I am sure that the grocery store justifies the low rate because it brings people in to the store and I do, in fact, find myself buying more stuff there because I am already there to pick up or drop off a DVD.

For your business, you might consider $0.99 or $1.50 per rental, due back the next day, and make late fees either $0.99/day or $1.50/day.

Also, you might pass out a flier with each new subscription instructing people on the proper way to handle DVDs (don't touch the back side...), and why widescreen is better than pan & scan.

If you do open a rental store, be sure to put security stickers on your DVDs that say "Be Kind, Please Rewind".

Al Simmons

Have you considered the market were the store will be located, the location of the store, the type of customers you will have. How much volume in renting you would have to do to make a profit and pay your expenses. Think about this you get set up with your store and these will be some of the things you will have to pay for (not including start up costs).

You buy a title, say 20 copies and lets say you only get %15 discount from the distributor (Ingram Entertainment) off MSRP (24.95) this would give you:

20 X 19.95 = $399

This is product cost, now if you rented out each title @ $.75 would be $15 a day in rentals, which would take about 27 days to make the money back. I haven't been in a rental store in long time but I would guess that after the first two weeks popularity of title would decrease linearly. You still haven't made any money to pay for operating expenses either at this point.

Now if you charged $3.00 a pop you will get $60 in rentals a day and would be able to pay off your product cost in 7 days instead of 27 days. Then after the first week a title is release all revenue generated will go towards operating expenses and profits.

Note: If you are small business never ever try to compete with the big boys you’ll never win because they have trucks loads of money they are willing to loose to put you out on the street. Look a best buy they are willing to do heavy loss leadership on new release titles just to get you come in the store and buy it, most do because most are concerned with lower prices than the service.

UAIOE

I know that from first hand experience.

Abob Teff

Seagraves -- I was going to offer some advice until I saw you were a Lions fan. Now you can rot after the bastards basically forced Barry Sanders out of football and allowed Emmit Smith to pass him in the record books.

But, you are a DVD Talker, and I like to encourage anybody looking to do what you want to do (so do I!). My comments would get rather lengthy here, so please e-mail me at [email protected]

beebs

There's no way you can rent DVDs for .75/night and make any money. Half of your gross receipts will be taken up with labor costs... assuming you pay minimum wage, the rest will be eaten up with lighting, utilities, rent, and other costs.

You'll be lucky not to lose .75 a rental at this rate.

Consider running a business as NetFlix and RentMyDVD have, but out of a storefront. Charge $19.95 for unlimited rentals a month. They can keep out 3 DVDs at a time, and keep them as long as they like, as long as they keep paying 19.95/month. Perhaps 1 DVD plan for 9.95/month deal might also be nice.

If you started a DVD only rental store TODAY and stocked it with $50-60K worth of inventory... you'd have a good year.

-Beebs

Teisco

I agree, when Blockbuster had their "30 dvds in 30 days" for 20 bucks a month I was in heaven but that is no longer the case.

I think a store that would offer 30 dvds in 30 days for 20 bucks a month would work. I also would only rent new titles, selling off the older titles to pay for new titles.

I ran the first video store in Iowa when movies were 5 bucks a nite and blank tapes were 21.95 and there were lines out the door each nite when guys got off work. In those early days the studios did not want us to rent movies.