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I admit it - I may have failed you on my last DVD Rental Kiosks posts. I did not cover the operating costs and income streams on DVD Rental Machines as detailed as I should have. How can a person figure up whether they can make a profit or if it will just break even? (like me so far) There are a few hidden operating costs to having a dvd rental machine. There is also a key income point that was overlooked by me and most people when they look to running a dvd kiosk. Several people commented and emailed questions so I am going to follow up with another post. I hope that what I have written has helped those trying to make decisions.

Below I am going to list a typical month in the checking account of a dvd kiosk owner. These figures will be based on two machines operating with and average of seven to eight rentals each per night. I am also taking the liberty to add advertising income where as I currently do not receive any.

Income

• Rental Income (sales/rental tax removed): $ 1,489.42
• Sell Through: $ 281.00
• Buy Back: $ 118.00
• Advertising: $ 120.00

Expenses

• Purchase DVDs: $ 720.00
• Bad Credit Write-Off $ 74.00
• Lease for space (assuming 10%): $ 177.04
• Vehicle expenses: $ 110.00
• Merchant Account: $ 136.32
• Insurance: $ 137.00
• Maintenance & Back-end software administration: $ 150.00
• RFID Tags and Stickers: $ 58.00
• Business Loan: $ 200.00

Income: $ 2,008.42
Expense: $ 1,762.37

Profit: $ 246.06

The numbers above are very close to reality with my two kiosks. I am not renting nearly enough movies per night to turn any significant profit. Keep in mind that the inventory, mileage, and bad credit are business expenses that can be counted against annual income taxes. However, at a tad over two-hundred a month profit it is hardly worth it.

I think that in order to run an effective business some goals need to be set and met. Below are my six month goals. Notice the increase in advertising income and expense. I am going to push advertising more on both sides.

Income

• Rental Income (sales/rental tax removed): $ 2,606.49
• Sell Through: $ 492.00
• Buy Back: $ 80.00
• Advertising: $ 320.00

Expenses

• Purchase DVDs: $ 740.00
• Bad Credit Write-Off $ 74.00
• Lease for space (assuming 10%): $ 309.85
• Vehicle expenses: $ 120.00
• Merchant Account: $ 238.58
• Insurance: $ 137
• Advertising: $ 240
• Maintenance & Back-end software administration: $ 150
• RFID Tags and Stickers: $ 58.00
• Business Loan: $ 0 (Paid off)

Income: $ 3,498.49
Expense: $ 2,067.43

Profit: $ 1,431.06

A profit of $ 715 per machine over the period of one month is certainly obtainable. While it will not get you rich by any stretch of the imagination it certainly is headed in the right direction. One person commented on an earlier post that she would like to see $ 1,000 a month per machine. I would love to hit that figure as well and really think it is doable. My six month goal projections are only based on a seventy-five percent increase in rental and movie sell-through. In order to meet these goals I will need to see a rental increase of five more movies per night. I plan to create and stick to a marketing campaign in an attempt to increase the daily rentals. Extra income should be generated with a hard push in movie sell-through and obtaining advertisers.

I will now dream a little and share it with you. Below is a what if senario. What if I could mantain an average of thirty rentals a night in each of my two machines.

Income

• Rental Income (sales/rental tax removed): $ 6,205.93
• Sell Through: $ 550.00
• Buy Back: $ 20.00
• Advertising: $ 400.00

Expenses

• Purchase DVDs: $ 740.00
• Bad Credit Write-Off $ 74.00
• Lease for space (assuming 10%): $ 675.59
• Vehicle expenses: $ 120.00
• Merchant Account: $ 520.21
• Insurance: $ 137.00
• Advertising: $ 240.00
• Maintenance & Back-end software administration: $ 150.00
• RFID Tags and Stickers: $ 58.00
• Business Loan: $ 0 (Paid off)

Income: $ 7,175.93
Expense: $ 2,704.53

Profit: $ 4,393.40

Keep in mind that these numbers are based on two kiosks. The adjusted number is $ 2,196 per kiosk. While I am a long way away from thirty rentals a night, it is attainable. I could see each of my machines attracting that many customers each day.

Stay tuned as I will certainly keep your guy and gals current on my monthly progress.

You can check out my seven part series on DVD Rental Kiosks - Are they worth the investment?

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