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Author Topic: Opening very small rural store...help :)  (Read 4175 times)
CornerVideo
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« on: June 15, 2005, 07:48:32 PM »

Hi there everyone,

I've been reading as much as I can here and I'm very grateful for the wealth of experience and information on this site. Having said that...I am thinking about opening a very small video store in the very small town (pop approx 2000 with outlying areas) and I'm not really sure where to start. I have a great location right on main street and as far as competition goes there isn't any. To be more specific the town's convenience store rents VHS and the owner has said he will never get DVDs.  So, my idea was to do a DVD only store. I already have a seasonal ice cream shop that does pretty well during the summer but I want to expand that operation to include the DVDs.  

I don't know much, or rather anything, about the video rental business. What kind of options do I have where I could have a set up similar to those found in gas stations and convenience stores?

Any help would be greatly appreciated. Thanks so much for reading this.

Smiley
Judd
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amanda
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« Reply #1 on: June 15, 2005, 09:16:38 PM »

With most gas stations and convience stores around here, the owners of the store do not own the movies that are available for rent. There are lots of options with renting videos in small shops.

There are companies out there that will give you a certain amount of movies, and want a % of the profits, which is usually a high number. In Canada, Rogers Video wanted 60% of the profits, had to sticker all the movies with Rogers stickers, but they were going to give a Point Of Sale System (Rapid Rental) for free. They also order in your movies for you, you just sit there and rent them. Im not sure if the offer is still available with Rogers, since that was in 2002. It was called Rogers Shows To Go or something like that.

If you wanted to keep it small, you could just go with New Releases only, and avoid the catalogue, or cheap titles. This would work well if you are short of room.

Bringing in your own titles through a distributor is a way to get all the return on your rentals, without having to share your profits. The Canadian Distribution Companies that u can contact for catalogue and sales information are;

VIDEO ONE; 1-800-665-1330

HIP INTERACTIVE; 1-866-525-8746

Be sure to give both of them a call, to see what they both have to offer, and tell that that u r interested in the other company for a bigger percentage discount of the Sugguested Retail Price (SRP).


Be sure to ask all your questions now too, so u can get into the business with a little know how. Im sure there will be lots of posts following this one, be sure to get James' opinions too.   Cheesy Good luck!
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amanda- the light of your life
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« Reply #2 on: June 16, 2005, 04:40:40 AM »

Thanks Amanda,

I've already contacted HIP and hope to hear back from them soon. Does VIDEO ONE have a website? I think going with only new releases at first is the way to go out here. Most of the locals just want the latest cheese but to keep them interested in the depth of winter I'll likely have to get some cheap titles and catalogue.  It's early and I can't think of any other questions at the moment but I'm sure I will soon.
Thanks again.
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CornerVideo
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« Reply #3 on: June 16, 2005, 04:42:31 AM »

sorry, that last post was from CornerVideo...dang newbie I am forgot to sign in.
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amanda
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« Reply #4 on: June 16, 2005, 04:32:51 PM »

www.video-one.com


sounds like a great plan to go with the new releases, and then if it does take off, invest some more money.


if u need anything else, be sure to ask
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amanda- the light of your life
CornerVideo
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« Reply #5 on: June 21, 2005, 12:07:41 PM »

Thanks Amanda,
I'm having a really hard time getting in touch with the rep from HIP so I'm certainly going to try Video-One too.  

I was also checking up on the provincial regulations and they say that a retailer can only rent videos obtained from a provincially licensed distributer. Guess that means I can't buy and rent my own DVDs. That sucks. Seems like too much regulation to me but oh well.  

What kind of regulations do you have in Sask? And hey, I'm originally from Manitoba so it's nice to see a fellow Prairie-ite here.

Thanks again,
Judd
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amanda
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« Reply #6 on: June 21, 2005, 04:00:01 PM »

HIP can be a pain in the butt to get a hold of, they dont really have a system, and time changes are a beep. Whos your rep?

our regulations include having a rental license for movies, and a seperate license if we wanted to rent adult (which we dont).
We can buy or video copies from Walmarts, or where-ever.
So far there is no law on ratings. ie; renting 14A movies to 12 year olds. (manitoba there's a law for that now)
.... and thats about it i think for the most part.

Prairies are still pretty flat around here... nothing has changed lol, hows the water way over there?  Cheesy
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amanda- the light of your life
CornerVideo
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« Reply #7 on: June 21, 2005, 05:51:14 PM »

Our rep from HIP is a guy named Steve Arsenault. I spoke with him today and he's sending me out a package. He also gave me the name of a guy in TO with Video Warehouse Distribution...any dealings with them?  
all rental videos have to have classification stickers in NB. The water here is great!  Sometimes I miss the prairies...especially when watching Corner Gas. And hey, that show is the inspiration for the name of our store!  I like the think of myself as the video store Brent LeRoy of rural NB.

I also spoke with Video One today and they quoted me 70/30 on a revenue sharing deal, no cost upfront and only two weeks of notice before the store opening.  They include everything, computer/software, racks, promo material, dvds. Almost sounds too good to be true but I'm still thinking about it. I wonder if I could get better than 70/30 from them?  
Thoughts anyone?

Thanks again for all the advice!
Judd
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amanda
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« Reply #8 on: June 21, 2005, 06:35:57 PM »

Ive never heard of Video Warehouse before.

i never knew that Video One did a revenue sharing.. sounds like a really good deal... what POS system do they give u on that? Have u checked out Rentrak?

AND WHO LIKES CORNER GAS? boo urns  Tongue
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amanda- the light of your life
CornerVideo
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« Reply #9 on: June 22, 2005, 04:03:28 AM »

You don't like Corner Gas? Sad

I didn't ask about the POS system...is there one I should be wary of?  I haven't checked out Rentrak but it's hard to beat the "no cost up front" deal with Video One.

Seriously, you don't like Corner Gas?
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amanda
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« Reply #10 on: June 22, 2005, 04:39:10 PM »

lol, I HATE Corner Gas!

There isnt really anything bad about the POS systems available, just some arent as fancy as others, which isnt always necessary. Just curious.
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amanda- the light of your life
CornerVideo
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« Reply #11 on: June 23, 2005, 10:14:44 AM »

Why do you hate corner gas? It's so warm and fuzzy and funny and well put together.

You said you didn't know that Video One did a revenue share but when I spoke to one of their reps (who wasn't so professional enough to give me his name) I got the distinct impression that ALL they did was revenue share. What kind of dealings did you have with them?
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« Reply #12 on: June 23, 2005, 11:46:36 AM »

CornerVideo

That sounds more like what a rack jobber would do. They typically provide everything to places such as convenience stores and in return the store owner get a cut of the money collected and also shares in the cost of any product missing.

A 70/30 split is a terrible deal if you expect to stay in business.
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CornerVideo
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« Reply #13 on: June 23, 2005, 11:49:21 AM »

Yeah, I'm leaning further and further away from 70/30
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« Reply #14 on: August 09, 2005, 08:00:10 PM »

I read where a 70/30 split would be a bad deal.  However, Rentrak splits are even worse, some being 56/44.  Does that make Rentrak the wrong way to go.  I am looking to open a store in a rural Texas town (pop 1,200).  Rentrak looks appealling from the standpoint of the number of titles I can rack as opposed to buying what I can from Walmart.  I have looked at distributors and their prices are seldom as cheap as Walmart.  What am I missing here?  Help before I make a real bad decision.
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