I see that you have a number of kiosks at IGA's and I'm preparing to approach some of them in Florida, where we live and I'd like to know what helped in your sales presentations to your IGA locations. I wouldn't think that the income/commission would be the key.
I'd appreciate any comments you could offer.
Thanks, Wayne & Betsy Weaver
O.K., I'll answer this from my end. Remember, there are numerous reasons that a store owner or manager should consider putting a machine in their store. I'll start by saying this: They don't have any investment in your machine. They don't have to fork over the $20,000 it costs to get one started up. Their risk level is really low, so why not?
On top of that, if they know anything about marketing and making money for their company, they know that the more floor traffic in and out of the store, the odds go up considerably that they sell more products. Let's take a look at the Redbox machine that's been going into the McDonalds and Albertson's stores. Why would they put these machines in their stores? Simply for the reason I just gave you. They want floor traffic. These movies provide a reason for the customers to come back.. They are banking on selling more products. (And they do) or over 6,000 machines wouldn't have homes in stores.
Here's my opinion on where I'd be a little upset if I was the store that had the Redbox machine sitting outside my store. Many of these Redbox machines sit outside. What's the point? Basically, it allows the customer to bring he movie back 24hours. Does that really help the store though? I'll let you think about that.
Now, why put a DVDNow machine in a grocery store? Several reasons come to my mind.
1. We don't put them outside. The customer has to come inside so the odds of buying something increase. 2. Each DVDNow Kiosk owner can customize everything about their machine to accommodate the store that hosts it. I also think that our business is a little more customer friendly. Since each of us is an independent business owner, we have the option of engaging our customers on a different level. When they call you with questions,they get the guy that actually owns the machine. Customers want to get in touch with the guy that runs the show right? Well, you're the guy (or gal). Make it an opportunity to show your customer how great your machine is. Being able to take the video out of the machine after swiping your credit card and then being able to put it back in the machine without being charged is something you can't do with Redbox. How about seeing what's in? You have to go through a series of stages to find out what's in the Redbox. Go and check for yourself. Although Redbox holds more DVD's, you can't see them through the glass window. Plus, we cycle movies so fast that the old ones don't get rented anyway.
3. Advertising and newsletters for your potential customers is always something that can be done on the DVDNow Kiosk. Being able to customize the look and feel of your Kiosk for the location is something Redbox can't do. How much fun would it be to run a few videos of community events on your Kiosk? People love that kind of stuff. You'll be able to do that with your Kiosk from DVDNow.
As far as income is concerned, most of these stores are only interested in the floor traffic you provide them. Repeated traffic adds to the bottom line. I also sell my old DVD's to my host stores so they can sell them and make a little more money. I float them for about a month so they have them sold before I even bill them out. How can you go wrong with that? Redbox wouldn't do that with their host stores.
I happen to have a great relationship with my IGA stores. The managers are super people and they love the machines. Plus, they take care of them for me like they own them. I'm pretty lucky. Make sure you put them in a place where they are excited about them. If the employees and the manager thinks highly of them, they'll work for you. If they treat them like a bubblegum machine in the corner, you'll have a tougher time with them. Don't settle for anyone that is not going to help you out.
I won't pay anything more than 10% of net revenue on my machines. That's probably too much but my store owners take care of my machines too. They do all the work. If I was doing all the work for them, I wouldn't even pay that much. They make good money on the traffic in and out of the store. They wouldn't have it without the machine so there is a huge value to that. Also, I never pay for internet connection. If they want it bad enough, they'll take care of that. Rentals are so inexpensive anyway, it takes a lot of rentals to make up all the fees and internet hookup.
Mike
O.K., I'll answer this from my end. Remember, there are numerous reasons that a store owner or manager should consider putting a machine in their store. I'll start by saying this: They don't have any investment in your machine. They don't have to fork over the $20,000 it costs to get one started up. Their risk level is really low, so why not?
On top of that, if they know anything about marketing and making money for their company, they know that the more floor traffic in and out of the store, the odds go up considerably that they sell more products. Let's take a look at the Redbox machine that's been going into the McDonalds and Albertson's stores. Why would they put these machines in their stores? Simply for the reason I just gave you. They want floor traffic. These movies provide a reason for the customers to come back.. They are banking on selling more products. (And they do) or over 6,000 machines wouldn't have homes in stores.
Here's my opinion on where I'd be a little upset if I was the store that had the Redbox machine sitting outside my store. Many of these Redbox machines sit outside. What's the point? Basically, it allows the customer to bring he movie back 24hours. Does that really help the store though? I'll let you think about that.
Now, why put a DVDNow machine in a grocery store? Several reasons come to my mind.
1. We don't put them outside. The customer has to come inside so the odds of buying something increase. 2. Each DVDNow Kiosk owner can customize everything about their machine to accommodate the store that hosts it. I also think that our business is a little more customer friendly. Since each of us is an independent business owner, we have the option of engaging our customers on a different level. When they call you with questions,they get the guy that actually owns the machine. Customers want to get in touch with the guy that runs the show right? Well, you're the guy (or gal). Make it an opportunity to show your customer how great your machine is. Being able to take the video out of the machine after swiping your credit card and then being able to put it back in the machine without being charged is something you can't do with Redbox. How about seeing what's in? You have to go through a series of stages to find out what's in the Redbox. Go and check for yourself. Although Redbox holds more DVD's, you can't see them through the glass window. Plus, we cycle movies so fast that the old ones don't get rented anyway.
3. Advertising and newsletters for your potential customers is always something that can be done on the DVDNow Kiosk. Being able to customize the look and feel of your Kiosk for the location is something Redbox can't do. How much fun would it be to run a few videos of community events on your Kiosk? People love that kind of stuff. You'll be able to do that with your Kiosk from DVDNow.
As far as income is concerned, most of these stores are only interested in the floor traffic you provide them. Repeated traffic adds to the bottom line. I also sell my old DVD's to my host stores so they can sell them and make a little more money. I float them for about a month so they have them sold before I even bill them out. How can you go wrong with that? Redbox wouldn't do that with their host stores.
I happen to have a great relationship with my IGA stores. The managers are super people and they love the machines. Plus, they take care of them for me like they own them. I'm pretty lucky. Make sure you put them in a place where they are excited about them. If the employees and the manager thinks highly of them, they'll work for you. If they treat them like a bubblegum machine in the corner, you'll have a tougher time with them. Don't settle for anyone that is not going to help you out.
I won't pay anything more than 10% of net revenue on my machines. That's probably too much but my store owners take care of my machines too. They do all the work. If I was doing all the work for them, I wouldn't even pay that much. They make good money on the traffic in and out of the store. They wouldn't have it without the machine so there is a huge value to that. Also, I never pay for internet connection. If they want it bad enough, they'll take care of that. Rentals are so inexpensive anyway, it takes a lot of rentals to make up all the fees and internet hookup.
Mike
8 comments:
Interesting thought of having retailer purchase used DVDs from you and reselling in store. May I ask what you get from your stores if it is standard across all of them. I know VPD gives $5.50 for 60 day old DVDs and buyback price declines by $0.50 every two weeks. Your strategy sounds like a better financial arrangement where the retailer can mark up DVDs 50% and resale them and feel like they are making money off you that way also.
When you float the dvd's to the store for an entire month and they have an opportunity to sell them before you charge them, it's a win, win for both of you.
Mike Weiland
http://readydvd.com
We really wanted to be in Grocery stores but every independent IGA store we contacted from Logan to Salt Lake City had a Red Box in it. :(
Wow, the IGA stores in Montana don't meet the criteria for Redbox. They either don't have enough traffic through them or there's an Albertson's in town. There's other places that work just as good or better. I have that little store in Laurel Ricci's Express That does just as many rentals as my best IGA. Location is everything in this business. I've found that if the customer can just walk the DVD back the store, that I get more rentals from the machine.
Mike Weiland
http://readydvd.com
Hi Mike
I wanted to get your thoughts on approaching a store owner/manager to make the initial pitch. How did you go about introducing yourself, was it by phone, mail or just dropping in and asking for the manager? I have two machines in c-stores that are not having any growth so I think its time for a change. I've found a few grocery stores in the area that I would like to approach.
Thanks
Tom
Definately go see them in person. Just ask them if they are interested in more floor traffic in their store. They'll tell you yes. Tell them about the machine and what it's designed to do. I think explaining what the machine will do for their bottom line is enough to get most competent store managers interested. A free $20,000 machine in their store? Who wouldn't want a tool like that to drive traffic.
Sincerely,
Mike Weiland
http://readydvd.com
Please help me understand the financial side of this. You're spending 20k on a machine that generates roughly 1k-1800 per month? How long does it take to start turning a profit? Are there any leads for used machines? Are there new machines for less then that? Thanks.
I'd be glad to go over it with you if you want. E-mail me directly. There is way too much for me to go over with you that I don't have time to write in this blog. Also, if you read the entire blog, you'll pick up bits and pieces that will help. I don't mind going over it directly after you've talked to DVDNow. I'll give you my side of it.
Mike Weiland
http://readydvd.com
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