The video rental business has changed over the last 10 years and to be successful today a store owner has to find every way possible to save money, attract customers and keep them coming back.

 

We started in this business in 1981 with VHS & Beta and quickly realized that carrying multiple formats would be too costly and dropped Beta early that year.

 

Turned out to be the best decision we made as we all know.  We left this business and sold all our stores in 1994 thinking we would never return.  Everyone always says, location, location, location, is one of the major keys to a successful business and in 2003 we found a location that was perfect for opening a DVD only store, so we jumped in again.  This time carrying no VHS and only renting and selling DVD titles.

 

To combat the customer who would ask for VHS we would offer a DVD player for $39.95 + 5 Free rentals as an enticement to switch or at least include the DVD in their entertainment selection.

 

This proved to be very effective and within a few months we had a thriving business.  We now find ourselves in the crossroads of multiple formats again (HD vs. Blu Ray) and this time the consumer isn't in any hurry to choose or leave their basic DVD equipment.  When the prices start coming down maybe we will see a gradual conversion but until that time we are not buying any of the new product.

 

In the last year we saw PSP coming on strong and now it is not even talked about.  I am of the opinion that the winning new format will be the one that still plays the original DVD and the will cost less than $150.  Then we will see the consumer interested in buying another player/recorder.  Until that happens we are in a holding pattern.

 

Over the past few years I have found a way to reduce the cost of DVD's and stay competitive.  I call it the WalMart Experience.  If you are one of those business owners that believes WalMart hurts the little guy, you just don't know how to use them.  In the video rental business it's all about how many turns can you get on a movie and make money.  When you buy titles from your distributor they cost over $19 each + shipping.  Do you know that WalMart sells those same titles for less than $16.  Actually,WalMart is so competitive that they will beat any competitiors pricing.  For the past year we have been buying movies for under $14.  Let's do a little calculation. I purchased 210 copies of various new releases so far in Feb 07 and saved $1,260.00.  WalMart opens their arms to me and I take advantage of tremendous savings.  They even let you purchase using your resale certificate.  They give you a tax exempt card to use every time you purchase product that is being sold in your store. 

 

We sell candy, soda, water, DVD players/recorders, recordable DVD blanks, etc, etc.  All of these items are cheaper from WalMart, guess I'm a WalMart cheerleader.  I have been buying from them since opening our store and saved tens of thousands of dollars.  We are actually famous amongst the (4) WalMart Stores in my area. Here is a short story to explain:

 

    In December 06 I went to a WalMart store that I usually do not visit and had to write a $800 check for movies.  Because of the amount a supervisor had to approve the check and verify I was a legitimate business using the tax exempt card.  The manager asked me to step out of line while he went to his office for verification.  As he was walking to the door I noticed he was looking over my check and then made an abrupt stop at the door, turned around and walked back to me smiling.  He said, "You're the Video Guy, you're Famous at WalMart".  Apparently, as a result of my weekly purchases all the WalMart managers talk about us at their regional meetings.  I was shocked and grateful to know that our little video store had made such an impression.

Thank you Curt for this great information!

If anyone else has some great info to pass around, please contact us. Independent video stores need to stick together, and share their stories.