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If a movie is still renting well and is approaching ninety days from the street date should I remove it from my DVD Rental Kiosks and send it back? This is a situation I run into with popular movies more often than not. For those of you not in the DVD rental business I will take a moment and explain what I mean. When we buy movies for our DVD Rental Kiosks we don’t get the movies at a great discount. We might even be paying a little more than you pay for the movie at Walmart. What we do get is the movie in on the Friday before the Tuesday release date and a guarantee that the movie will be repurchased for five to six bucks. That is if we get the movie back to the distributer within ninety days.
When I make a mistake and purchase a movie that rents horribly and I know there is no chance at a sell-through, I generally pull the movie after seventy-five days and send it back for a credit. I have put movies in the kiosk that only rented a time or two the entire time. Slow or no renting movies make for an easy decision.
If a movie is renting well ten weeks beyond the street date I will keep the movie in the kiosk and continue renting it. When I say renting well I mean three or more times each week. Once that movie starts to slow down I will mark the purchase price down until it sells. Generally speaking, I will double what the video distributor will give me. Good renting movies are not the problem either.
My issues are with the movies that are renting on a weekly or bi-weekly rate around week number ten. Why is week ten so important? If I am going to take advantage of the buy pack plan my video distributor offers then I have to make a decision around this part of the time line. If the movie is renting once weekly then I will need it to rent another three weeks to break even. Meaning if I leave the movie in the machine I will come out ahead within thirty days if the movie keeps renting. If the movie is only renting twice a month it will take two months to justify keeping it.
Another factor that I have to consider is available space. Six months ago this was not an issue. My kiosks were still fairly new and I had plenty of empty slots. Empty slots are certainly a thing of the past as I have to work movies in each week. If my kiosk only has six empty slots and I have seven movies coming in this week it sure does make my decision for removing a movie that is on the fence, a lot easier. On the flip side, when I have ten slots open and only have three movies coming in some decisions have to be made.
If I am wrong and let a borderline movie remain in the kiosk and the movie stops renting what can be done? I have a few options here.
- If it has not been but a week or two past the ninety days I could return it to my video distributor and get a reduced credit for it. Normally about a dollar a week is taken from the normal figures.
- I can make the sell-through price attractive enough to where it will be sold. I have noticed is most of my borderline movies will sell once I mark the price around five to seven dollars.
I have only been in the DVD Rental Kiosk business eight months or so. I would love to hear from you guys and gals just starting out and those ‘old-timers’ out there, how you handle the borderline movies.
Check out the seven part series I wrote on DVD Rental Kiosks - Are they worth the investment?
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5 responses so far ↓
1 dondene // Jun 29, 2008 at 4:33 am
another factor you may consider is, ‘volume of income.’
when everything sails smooth as you plan, and someday when you decide to sell your business, it matters for your business value.
where possible, unless space is so tight with new movies coming in, i would rather keep them and sell at $5-$7 range, purely for volume of income purpose.
btw, at what price do you start to sell DVDs initially?
also consider giving discount for multiple purchases, like $10 for 1, $18 for 2, and $20 for 3 DVDs.
i enjoyed your posts, very helpful! thanks.
2 Shawn // Jul 1, 2008 at 7:00 am
I like the way you think. My average sale price is $ 15.88 however that includes movies kept 14+ days. Once a movie starts to slow in rentals I will put a price of 13.99 on it. Very few sell at this price tag and a few weeks later I move it on down. Sell through of movies have doubled each month over the past three months or since I have made a concerted effort to push sales above the 6 dollar mark instead of sending the movies back.
The administration software for my kiosk does not make it easy for me to offer discounts on multiple purchases. Are you able to implement these tactics automatically in your kiosk software? I am going to suggest that as a possible future feature however.
3 dondene // Jul 1, 2008 at 3:38 pm
about your sell-through pricing and timing
set a rule of your pricing so that your customer knows how much they are supposed to pay before they come to your kiosk.
don’t adjust pricing, set it fixed (i mean initial pricing). they SHOULD KNOW what price your movies start to sell at, no matter how popular it is.
If you movies don’t sell out after certain period (this should be preset and your customers pretty much should know), drop the price and keep it until you decide to return to your vendor.
Keep consistency and let your customer know or at least let them figure out whey they can expect to buy one of your used releases at what price. There is no better way of building up “recurring purchase customers” other than this.
to give some lights, i will tell you how i do on my local store.
after 2 weekends of initial stocking, i start to sell the movies at price of $10.
if necessary, when a title is too hot, i hold for one more weekend, which hardly happens, and i don’t like the situation.
why? this is why.
if i have to hold movies for 3 weeks, that means that that title is understocked, being popular than i expected. my rental customers would have had hard time to rent the title due to the shortage of the copies, then my “purchase customers” who come every week, will be very very disappointed too.
4 Shawn // Jul 3, 2008 at 8:00 pm
Thanks for your comments. I like your ideas and will take what you say into consideration. Thanks again.
5 Joe // Aug 17, 2008 at 8:39 am
I am very close to purchasing 2 kiosks and thank you for all the info. Couldn’t you sell the old movies on ebay? I never sold through ebay but once an account is set up it should be a snap to put movies up once a week or so.
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