Tuesday, December 30, 2008

Pricing Issues

Stewart has asked for a thread regarding pricing, so here it is. I also wanted to share one of my smaller stores with all of you. This is Jan. 1st, 2009 An appropriate day because all of my information is clear except for the previous day and Today. I think this is where everyone should be and beyond. This business is excellent with a little hard work and a great location. Plus, there's no reason to short sell yourself. Everyone understands that businesses need to make money to stay in business.
CLICK ON IMAGE TO ENLARGE
EXMAPLE OF A SCREENSHOT
KIOSK IN SMALL TOWN OF
WYOMING.


Mike,
Can we start a thread about pricing? I am considering going up in price. I am barely breaking even. My numbers are steadily increaseing as comfort levels go up. I am currently at 1.49 and .99 each additional night. I am considering increasing the first night to 1.99 but don't want to shoot myself in the foot. I would also like to see what people are pricing out for advertising.
BTW - I am pretty much alone. There is a REDBOX in the WAL-Mart here but I have never seen anyone at the machine.
Stewart

56 comments:

Anonymous said...

How many rentals are you averaging a night? We are going to start with three Kiosk soon and thinking about 1 dollar movies. I think if the amount of rentals per day are high enough then maybe you can make more? Also, I heard buying from WalMart maybe cheaper than going through VPD, just a thought. I believe you have to wait at least a year before you start seeing great numbers. The DVDXpress machine near me charges 1$, and rents about 45 movies a night, they buy about 6 movies per title and get their movies from Walmart. I talk to a person who sell the movies to them.

Anonymous said...

Hi, I rent for $1.29 and .99 each additional night. I recently moved my kiosk to a new location. It's been 26 days and im over 350 rentals. Im looking to increase my rental to $1.39 possibly $1.49 the first night and .99 each additional night. The nearest REDBOX,DVDPLAY kiosk, or video store is 3 miles away.

Curtis said...

My best Kiosk is across the street from a Blockbuster and a block from a from a red box.
(Side note I have been hearing a lot of complaints about red box, mostly scratched discs and lack of someone to call if there is a problem.)
I don't think I can raise my first night price above .99, but I have considered doing the opposite and raising the additional nights price a bit.
It's only been in place 45-days and is getting better each week.

It's true that Walmart has 1-2 titles on sale below cost the first day they are released and I get all my universal titles there, But I have found that the connivence of having DVD's delivered to my home 4-5 days before they street and the ability to return my used DVDs to VPD for $5.50 far out weighs the $2-3 dollars saved at Walmart.

Unknown said...

I am not adding a third machine. I am averaging 7 rentals per day and averaging 2.2 nights per rental. I have been buying a few movies from Wal-Mart and it is much cheaper. You can't get them in the machine prior to release date but I haven't had a problem with it.
Maybe it's not my price, just my numbers?
But when you add the $.05 per transaction to 3c, the merchant cost, the Connections charge of $65/per machine per month, and then the 15% to the locations... its tough.

Anonymous said...

I have within the last 11 days put our first kiosk at terra verde which is a big resort with homes that vacationers rent. We are at about 12 rentals per night and we charge $1.99 first night and $1.49 second night. Its a convenience for them to just walk to the clubhouse and get their dvds.
Diane

Mike at ReadyDVD said...

Here's my opinion... If a customer knows that they can rent a video from you and they can check it out to make sure it's free of scratches, don't you think it's worth it to them to pay more? There is no video inspection from Redbox. You get the video that comes out. I can't see why anyone would rent out a video for $1.00. In my opinion, it's not worth it. I charge $2.49 for the first night and 99 cents for each additional night. After you get your merchant account fees and everything else you have to pay for, it's not really worth messing with if you can't make better profits. This is a service and a business. I have set my preauth lower and I have been getting way more rentals. Yes, it's also riskier. However, so far it's been worth it. $5.00 PreAuth at 2 machines of mine and $2.00 preauths at the other machines.
My philosophy is "Take Care of Your Customers and They'll Pay You for a Good Product" It's been working for us and it will work for you.

Sincerely,
Mike Weiland
http://readydvd.com

Unknown said...

I wish I had gone higher from the start. It is really doing much better and am affraid of costumers getting mad if I go up on my first night rental. If I were to go up how is the best way to do this without turning people off to the kiosk?

Anonymous said...

Mike is on the right track. This is a service business, and you need to find your niche in order to have a completive advantage. Focus on the customer service and convince or whatever it is that you offer that your competitors don’t. That niche however should not be lowest price. When starting a new business you should never get into a price war with your competitors. When doing that you are just setting yourself up for failure.
My advice for any new comers is to find your breakeven point. If you need to start renting at $2.99 just to break even then so be it. Besides it will be easier to lower prices in the future rather than raise them.

Anonymous said...

I know that Joe Fusco charges a dollar from previous post, if he is reading could he share some light as to how this is working out for him? I really don't think a single Kiosk is going to make huge profits, but I know having a Dozen or so in good location may generate some big profits. If you are looking to have this business replace your day job then you maybe in for a surprise.

Mike at ReadyDVD said...

First of all Mr. Anonymous, you should tell all of us who you are. Secondly, I don't think anyone around here thinks that one machine can replace a job. Actually, it might if you don't have many bills to pay. I will say that personally, I am doing quite well. You have to work at this business like any other business. My tax structure is in great shape, my income is good, and my locations have everything to do with it. I also price my rentals right. I take care of my customers and they can depend on me. THAT'S HOW BUSINESS IS DONE. As many of you know, I am also a sales manager at a Ford dealership and that's the way I run this business too. People pay more for quality and service. If you leave out the service folks, it doesn't matter what you charge. ATTITUDE AND ENTHUSIASM SELLS! Get them both and your business will do well.
Take your mask off and let us know who you are too.

Sincerely,
Mike Weiland
http://readydvd.com

Anonymous said...

I'm sorry if you feel offended, DVDNow told me those exact words. You wouldn't know me anyway, just trying to help out here. You must work for DVDnow? You sound like one of their salesmen. Thanks.

Mike at ReadyDVD said...

Yeah, I'm offended, Right. Give me a break. AND I also spent $100,000 buying machines to work for DVDNow. "whacko" It's people like you that ruin these blogs. You probably don't even own a Kiosk, just in the mood to discourage others. I shouldn't even post your comments as they are a waste of all our time. BUT, here's a little taste of what I get for putting a blog together online for everyone to share ideas on.

Mike Weiland
http://readydvd.com

Anonymous said...

Mike as someone looking to get into the business I have found this blog to be invaluable. Keep up the good work!

Sean Lewis

Mike at ReadyDVD said...

Thanks! I appreciate it.

Mike Weiland
http://readydvd.com

Anonymous said...

Hey mike, thanks again for being a guy who wants to help all the rest of us out. This blog has helped me so much already and I am just starting out in this biz! Thanks again, Diane

Unknown said...

Mike,
How did you pick $2.49?

I am not sure how to make the change and increase my price for the first night. I only want to make a change once. I just want to do it right from a business standpoint and from the standpoint of my costumers.

Kyle B. said...

First of all, Mike thanks for the blog, I know I do not contribute with a lot of posts but I do read what other people are going through. I will make a bigger effort to give constructive posts to help other DVDNow owners and hopefully I can get ideas and help from you all. Once again thanks. As for the pricing issue, I have two machines, one at a grocery store and the other at a apartment complex geared towards college students. My kiosk at the grocery store is priced at 0.99 for the first night and 1.49 for the second night, I believe that my success here has to do with location, no redbox within 5 miles, and blockbuster is 15 miles away. I am averaging 17 rentals a night, and this is my third month of operation. However my other machine at the apartment is avg. 3.4 per night, and my pricing was at 0.99 1st night and 1.99 the second night. Customers always rent for one night, about two days ago I changed my pricing structure to 1.49 a night, I feel that my customers "college students" felt a sticker shock between the first night and second night and made every effort to return the movie before the 1.99 kicked in. My goal is to get my customers to hold a rental and keep it out for a period of 2 to 3 days. I have already cut my inventory budget to be below what I am making so I broke even on that machine last month, but I would like to make something off of it, rental wise that is. To conclude what I am saying I believe location, location, location is key, then demographics and the type of customers you are attracting and their income level really help you set a price. Like Diane's location at terra verde, I would have no problem having a heathly price there, cause it is all about convience and it is geared towards vacationers, do they really want to go looking for a place to rent?

Mike at ReadyDVD said...

$2.49 is what I thought was fair and it keeps the price under $5.00 for two videos. Most all other places will charge more than that for the service that our machines offer. The service I'm talking about mainly is being able to look over the DVD's before you can go home with them. 10 minutes to inspect a DVD and read the box is a pretty darn good deal. Renting a DVD from Redbox for $1.00 and getting a scratched up disc isn't worth it. Service and convenience is always something worth paying for. Plus, I have stores that don't have Redbox right next to them and I have stores that have Redbox close by. Both places do well. People like our machines for many reasons and are willing to support "me" the little guy because I take care of them. I also customize my machines to the demographics. ex. I'll play videos on the machines that have people in the community on them. I did a parade this summer for my Roundup machine. People like that kind of thing and appreciate it that I take care of them.
Hope that helps.

Mike Weiland
http://readydvd.com

Curtis said...

Mike
I have to echo what has been said about your blog. I find it to be very valuable. Thank you for all your effort and thanks for the pep talk. :)
We are a service and we are worth it.

Laura S. said...

Mike, thanks for all your help through this blog. We went live with 2 machines on December 19th and this blog has been tremendously helpful.

I have found many of the things you mention are very true. I remember in one post you said that they are not like gumball machines where you can just drop them and wait for the money to start rolling in. We have found this to be very true and we have started a low-cost advertising campaign. When we first opened, we only average 3-4 rentals/night but now we are up to 8 rentals/night. I think that with some creative marketing you can really make the machines profitable. Next our focus will be on selling advertising.

Again, thanks Mike and everyone else for your useful posts.

- Laura S.

Mike at ReadyDVD said...

Right on Laura! A little creative marketing Plus, getting your host store involved with their employees goes a long way. Along with the correct PreAuth and you'll do better and better all the time. Our rental income has more than doubled in the last year. Without all of our ideas and strategies, makes this business a lot harder. I'm glad I have all of you guys too. Several folks on this blog have done some really cool things worth reading. Keep it up and keep sharing.

Sincerely,
Mike Weiland
http://readydvd.com

Joe Fusco said...

I'm not doing bad at $1.00 a night. I'm on Long Island, a suburb of New York, but it's like New York. Very densely populated. All major supermarkets have either a Redbox or DVDexpress. I'm in an independent grocery store that's 5 minutes away from 3 major supermarkets. So it's common knowledge here that movies you get in a machine are $1.00 a night.

Would I have done good at a higher price? Maybe. I think about it sometimes that I wish I went higher at first. I eventually will go up but don't want to do it so soon. Maybe after a year which will be September. I'm finding that selling the movies on amazon and sending some back to VPD brings the cost of the movies way down. I set up an excel spreadsheet to give me a profit or loss for each movie.

This was never intended to replace my day job. It's fun to do, makes some money and will make more when i start selling advertising, and I never have to rent another movie for myself again.

Anonymous said...

What are some examples of your creative marketing? What were some things that you tried that didn’t work?

Anonymous said...

Hi Mike, thanks for the blog. I am on this site every chance I get. I enjoy reading the blogs, and sharing information with everyone on this site, I know I haven't shared much information. I plan on sharing and giving feedback to the new business owners as well as others who have been in business for awhile. As far as increasing movie rentals, on Jan 1, I increased my first night rental price by .10 cent. I have not seen a decrease in rentals yet. I am averaging 20 movies a night since I have been at my new location.

Joe Fusco said...

The image on the main page has next and prev buttons. I don't on my site. How are they there on this one? Is it a setting?

Mike at ReadyDVD said...

That allows me to scroll to the next machine. I can scroll from machine to machine this way.

Mike

Anonymous said...

This maybe in the wrong section but I didn't know where else to put it. Anyway, I have a question about the return time. When someone rents a movie, what is the return time? Twenty-four hours from the time they make the purchase or ie. 10pm the following night??? We can't seem to come to an agreement and want to get some input.
Our kiosk went on-line on Dec.19 at a local university. We purposly set it up just as the kids were leaving for their Holiday vacation. Anyway, tomorrow Jan.5 will be the first day that staff returns to work. We are planning a "Grand Opening" this week.
Also, so far we have used the Box Art from this Blog (thanks Mike) but there are still a couple of titles that we can't find. And we don't understand how we get them from VPD. Is there another resourse we can use?
Thanks so much for all the wonderful information on this Blog. We learn more every time we read it!

Mike at ReadyDVD said...

Hi Brandi,
I have mine at a deadline of 7:00 P.M. every night. Everyone knows that they have to bring their movies back the next night at 7:00 P.M.. There's no confusion or second guessing then. Also, if you look to the left, you'll see a link "Great Place for Hard To Find Slot Art". Just go to the Search Spot and pop in your title. This site is a great place when VPD doesn't have the art. Also, If I don't put it in my machine. I think you'll do well in a University.

Mike Weiland
http://readydvd.com

iCinema DVD said...

Wow, I haven't read this in a while. A lot of good constructive ideas going on I see. Mike, like everyone else this is a great blog you started...Very helpful.

I have my machine in a 430 unit apartment complex and charge $2.69/$1.49. I wish I would have started at $2.99/$1.99. Apartment complexes are a whole different beast than convenient stores. When I set my price I focused on two things; On-Demand as my only competitor, and the fact that I have a fixed number of customers. I figured if I beat On-Demand, then I could entice them to get off the couch and walk downstairs to get a video. I didn't even consider Redbox when setting my price, you just can’t. On-Demand is about $3.99, so if you beat that you should be good. I have been in my complex since 11/23/08 and have about 350 transactions. Not a massive amount but enough to make a small profit, and it should get better. I'm placing one in a 969 unit building next month, the building is really spread out though, so I'm not sure how well it'll work. When I find out I'll let you all know. In my limited experience, Redbox is not your competitor in apartment complexes, On-Demand is, and not everyone has On-Demand. Also keep in mind that you have a fixed amount of customers, unlike a traffic places.

I also run a few events to get the tenets excited, like I run a Heavy Hitter contest monthly. I also place about 5, one dollar off coupons in random DVD’s, and 2 fnf coupons in 2 DVD's. They seem to like it, and my Heavy renters start renting heavier at the end of the month to win the Heavy Hitter award. The Heavy Hitter award is 2 fnf coupons.

The staff at the complex I am at show off the machine to potential renters, and place a dollar off coupon in their welcome packets. They’ve even commented that a few new renters chose them because of the DVD machine. Which brings up an interesting situation, when the apartment management team asked me how it was performing I told them the truth and said as of right now I’m doing it for free. She then asked if I was going to take it out so I just told her it has to get better, but I’m giving until the end of Feb. She replied that she would talk to the owners to see how much they would be willing to pay for the service. There is a good chance they will offer to pay me to keep it there. So I’ll keep you informed.

As far as video prices, only having one machine, I have to buy from Wal-mart. Saving 4 to five bucks a video means a lot to me, and sometimes they have those combo deals, like last week I got Duchess and Ghost Town in a combo pack for 19.99. I think the usage of VPD is a function of how machines you have. If had 3+ machines, I'd probably use VPD. I started out using them, and still do for the artwork.

As many of you suggested I use Amazon for most of my sell backs, but I also use E-Bay. I seem to get a better price for videos that are only 2 to 3 weeks old on E-bay $12.99+. I have found that if I buy 3 copies of a blockbuster DVD like Eagle Eye for instance, the rentals slow up after the first complete weekend, so I’ll place one copy on E-bay while it’s still relatively new, and I can usually capture 14.99 for it, which is what I paid for it, then the rentals for that first week is pure profit per that DVD.

Just an observation, it didn't seem like that anonymous guy was being completely negative.

Best Regards,
Cedric Morris

iCinema DVD said...

I just gotta add in defense of Mike working for DVDnow....He definately doesn't work for them, he's made a few refferals that DVDnow doesn't exactly smile upon. :-) That's all I'll say about.

Mike at ReadyDVD said...

Thanks for all the great input Cedric.You are going to help a ton of people with your feedback. By the way, I didn't post everything from Anonymous. You should see some of the stuff I don't post. This BLOG has become a monster. BUT, still worth having. I love all the great ideas.

Mike Weiland
http://readydvd.com

Cindi at Quick Flix said...

Hi Everyone, this blog is amazing! Thanks to Mike for putting it together. I was told about by Mark Rudolph and have peeked at it a few times, and now am taking the time to post!
Sorry this is so long-winded.....
I've been in business for almost a year now and have had a bumpy ride. I have two kiosks and the one location I chose was a complete joke. I moved it at the end of August (gave it 6 months) and it is doing much better, but the money lost is killing me! I am struggling to keep myself above water, but don't want to throw in the towel. this business can be great, I just have to make up for lost time! Anyway, you all are SO helpful and I really appreciate your input.

I did just raise my prices and because of the loss, still think they need to go higher. But I was at $1.99/.99 but jumped to $1.99/$1.49 and older movies (over 6months) are at .99 per night. No one even blinked at the change. I did post a notice letting them know that the pricing will change on "this" date and what it was changing to.

I've been trying to get some ads sold, but that hasn't been happening for me. I'm getting ready to really sink my teeth into getting some space sold though! I spoke to a friend who does marketing and she gave me some great advice. She said to look at other places that have this "type" of advertising and who advertises with them - those businesses are more likely to want to advertise in this arena. Also, Real Estate/Insurance Companies are usually good for this type of advertising.

I purchase my movies from Giant Eagle, not sure if you know of this chain, it's a grocery store (they have redbox, blah!) and they also sell movies. They give "gasperks" .10 for every $50 spent, so I get money off my gas (just filled my tank for $1.40 - not a typo FILLED IT FOR $1.40!) I spend an average of $15 per movie + the gas points.
Hope that's helpful to at least one person!!

Cindi

Mike at ReadyDVD said...

Awesome Info. Cindi! I've always been for charging a little more. Like you said, people don't blink an eye. Once people know how the machine really works, business will pick up. A balance of the right movies and the correct amount is key as well. Let's not forget the movies that are sold that come out of the machine. It doesn't take much to make these machines pay for themselves. As Mark Rudolph tells everyone, Location is everything... It truly is. That means, having the folks that work in the location sold on your machine. You'll be o.k., Hang in there and keep posting. Most of these people on the post have gone through what you have gone too.. I personally went through it three times with one machine. It took me a little bit to figure out what I was doing wrong.. By the way, it's posted on this blog. Other ways I've saved money are with my merchant account guy. Roy Neese, has saved me a ton of money. There have been over 20 people now that have joined with his ranks. I guess something is working right with him. Also bought a disc resurfacing machine for our locations which allows them to fix scratched DVD's instead of throwing them away. Saved a few bucks on RFID tags too with Atlas. By the way, I'm knocking DVDNow's tags, they are great tags if you only need a few. if you buy a few thousand at a time, I save a tremendous amount.

Thanks for Posting Cindi!

Sincerely,
Mike Weiland
http://readydvd.com

iCinema DVD said...

Hey Cindi,
Good to hear from you, this biz is all about location,and can I say, if your kiosk is not working in an apartment complex that you marketed to in 3 months, move on. You know, before I got involved in this business,I always just convinced myself that the idea was so good it'd work no matter what. I have found the case is slightly different. Location once again is king and it may take you a few trys to find the right location. If you are hell bent on tying a certain strategy, then you need to make it work for you. My strategy is still apartment complexes. I think I just found a way to make it work. What makes it hard, is that you have a fixed amount of customers and you can't charge as much as on-demand to make it work. So I have explored a new option that may work brilliantly. I'll tell you all the strategy once I find out if it works or not....I just can't see it not working. It's a whole different way to approach the rentals....completely diffeent.
Regards,
Ced

Anonymous said...

Ced I am anxious to here the outcome of your test. I am looking at investing in one or more machines and apt. complexes are one of my targets. Interesting previous post you had about the apartment complex owners willing to pay you instead of you paying them a percent. I can see the draw though to them to want the machine if they have renters that want that convenience which is what the consensus seems to be about these machines - convenience and service.

Sean

Anonymous said...

Mikey,
This BLOG is very helpful - KUDOS and keep paying it forward my man.

I'm putting a machine on the ground - hopefully by the end of January and I'v been running the gauntlet on marketing strategies, ideal locations, etc... but this blog helps with creative juices and buying power - HUGE!

I'll let everyone know how the locator service performs. I'm not real excited about their communications thus far, but we'll see what they come up with.

Personally, I walked into two GREAT locations this past weekend and think I might have secured my own locations, but no contracts yet.

Has anyone thought about using a gift with purchase, but something unique - like a $1 "lottery" ticket? You might check with the state first, but it's meant as a gift with purchase.

Might sound like a gimmick, but if it becomes like a mystery prize - i.e. Willie Wonka Gold Bar - then it might increase traffic of a particular demographic - age, gender, etc...

I like the coupon give aways, but after reading the operations manual, I'm concerned that if you have a coupon on one particular day set to expire in 24 hours - do you assign each coupon a different number? In fear of a consumer/ customer giving out your coupon code?

Todd

Joe Fusco said...

If you use VPD you get to send out a weekly email newsletter with a coupon code. I set it up every week with a different code and make it good for 2 weeks. Don't forget, each code can be used only one time per credit card. Some people use it every week, some don't. Some who use it rent 3 movies a week so I'm making money anyway.

Pass out the code to business in the area, they have customers too. This is what gets the machine known in the area.
Also make sure employees of the store you get in get the codes. In the store I'm in I make sure the seafood guy gets great service from it, he has perfect view of the machine and keeps an eye on it for me. Kids love swinging those side panals, he tells me.

iCinema DVD said...

Here is what a wrote into Scott and Mark R. at DVDNow. This is my proposed strategy that may possibily make apts. profitable. Read and let me know what you think.

Scott and Mark,

I have a request that I think may be a win-win-win between DVDNow, DVDNow Distributors, and Apartment Management/Tenants. In my limited experience as a DVDNow distributor I have noticed there is marketable demand for DVD kiosk in apartment complexes, but due to fixed cost we can’t control, this demand does not exactly translate in to acceptable profits under the current model. So the question becomes, what can we control to increase our profitability? After having conversations with other distributors that have apartment complex placements an average of about 7-9 rentals a day is common. This is about the break even point for most of us. I don’t think most of us are doing this just for fun, so I have possibly found a solution that would:
• Boost DVDNow's competitive edge.
• Boost DVDNow's business with existing and potential distributors.
• Increase our, the DVDNow Distributors, profit margins in Apartment Complexes and other “high time” places (work, and/or school).
• Ensure that the DVD kiosk’s that tenants and apartment management love have a long term home.
Truly a win-win-win!!!!

Currently I see On-Demand as being the competition for those kiosks placed in apartment complexes. Now I would like to shift my focus on Netflix being my competition. To accomplish this shift I would need you to offer kiosks with the ability to toggle between per day rentals and subscription based rentals. A subscription model may prove to be a potent solution to the profit problem in large apartment complexes. This is a very simple solution that takes a few software sub-routines to workout. It will also be easy to update this in the firmware so existing kiosk will also be able to offer this strategic flexibility. In a 500+ unit apartment, if just 20% subscribe for about $13.99/ month profit would be upwards of $1000 a month…workable. The price is more than Netflix, but we’ve provided a solution to the problem of Netflix. Netflix lacks spontaneity, we don’t. To make this work the software could only allow one rental at a time per customer, for a 2 day max period (those variables could be set by the kiosk owner). After 2 days, it would have to charge a variable daily charge set by the kiosk owner, I’d say .99. Once a customer subscribes, we can use the credit card they subscribed with as their access key to receive their movies.

This is a solution that the other kiosk’s sellers don’t offer, giving DVDNow a nice competitive advantage. Let me know what you can do with this concept and if possible a time frame something like this can be implemented.

Best Regards,
Cedric Morris
iCinema DVD

Mike at ReadyDVD said...

Very interesting! Nice thinking. Let us know what becomes of it. Sounds like something that development should look at.

Sincerely,
Mike Weiland
http://readydvd.com

iCinema DVD said...

Here is the response from Scott McInnes, the president of DVDNow. Sounds positive, read below:

Hello Cedric,


We agree that this would be a great feature specifically for the location types that you identified and we are currently developing a subscription based price plan similar to what you've described. A membership system is scheduled to be available in February, followed by a subscription based system a couple of months after that. Again, these are scheduled dates are subject to change depending on what other software projects might take precedence.


Regards,
Scott McInnes

What do you guys think? The subscription amount could be lower to entice all, like $9.99. It has real life I'm feeling, this culd be the way to go for high time placements. High traffic placements would probably have to live or die by the day to day rental model. Stay tuned!!!!
Regards,
Ced
iCinema DVD

Anonymous said...

Cedric,
When working with a prospective apartment complex, what is the title of the individual that you worked with that made the decision to place the machine at their location? Did they have to contact corporate to do so? If you could help guide me in the right direction, that would be much appreciated!
Jason

Anonymous said...

Hey guys,

I'm new to the blog and only 11 months to the business but I tried several pricing setups. Both of my kiosks are in grocery stores and the 3rd going in next Saturday will be as well.

What I found for me was that $1.49 was the best setup. I tried $0.99 rentals which increased my rentals but lowered my revenue. I tried $0.99 the first night and $1.49 each additional night but people started bringing the movies back quicker and I still made less money. I agree with Kyle B, people try harder to bring it back if they are charged more for extra nights.

Although I go with $1.49 a night now, I think Mike has the right idea. Charge more the first night and less additional nights. The customers are less likely to hurry to bring it back because it's almost like a "savings" for extra nights.

Oh, and for my new machine, there is no rental store or machine within 12 miles of the location so I decided to go with $1.99 and $1.49 for additional nights at that location.

Curtis said...

Thank you for all the great posts, I like many of you have had that sinking feeling of “what have I done to myself”. But it will pass. I too have taken a hard look at my price and raised it to $1.49/.99. I can see now that $.99 a night is a hard way to make a living.

I have 4 kiosks, the first two I place in a C-store and an Athletic club. Both are doing poorly and I will be moving one this week and the other in about 2 weeks. My second set is doing very well, both in C-stores. I have found that the owner/manager has to want the kiosk. They have to have a staff that enjoys the kiosk and pushes the product.

I just finished placing my second set and they are doing very well, not great yet but I have more clients each week.

I have thought about buying a $20 gas card and placing it in a random DVD behind the DVD disk. (To thwart the guy who just rents, looks and puts it back) Then advertise that there is a Fee Gas card in one of the boxes in the kiosk. I would put the gas card in an older DVD that doesn’t rent much, to keep the excitement alive.

Coupons
One of my C-stores has a fast food franchise in it. The customer gets a $1 dollar off coupon with each combo purchase. They sell about 60-80 combos a day. Less than 10 have come in. For me I have given out over 1000 coupons for my 4 kiosks and less that 10% have ever been used. It a perceived value, the customer loves it but rarely uses it.

Whenever I place a kiosk in a new location I post a FNF code right on the kiosk for the first week its open. Less than 25% of my renters use it. If I am at my kiosk putting in new movies, and some one returns a movie, I give them a FNF Code. I keep a pocket full of coupon codes and hand then out.

Curtis
Quick Pick DVD

Joe Fusco said...

I am going to start soon raising my preauth to $8.00, now at only 1 nights rental. I also want to put some games in. I would like to set the preauth for games higher but I don't see a way. I can't see a $50.00 game going out on an $8.00 preauth.

Mike
Is there a way to talk to DVDnow about changing the preauth by slot like you can for rental and purchase price?

Mike at ReadyDVD said...

I see your point. I'll pass the message to Mark to see if he has any ideas.

Sincerely,
Mike Weiland
http://readydvd.com

Mike at ReadyDVD said...

Mark Rudolph says:

Hi Mike,

Customizing a pre-auth for per slot is not available.

Operators can use the Customize Price Data feature to set higher or lower rental rates for days of the week or for specific slots.

This is one way to set a higher pre-auth fee. However, the limitation is with the pre-auth setting. Whatever pre-auth method you choose to use will be used for all card swipes. If you select full then all rentals are pre-auth for the full sale value.

One idea that we have been working on – when the membership program is launched we plan to include a feature in which members who have a perfect track record – with no declines – will automatically be changed from Full auth to partial. New customers or non-members would be subject to full auths. There are no estimated release dates available for this.

I hope this helps.



Mark Rudolph
Operations Manager | DVDNow Kiosks, Inc.

iCinema DVD said...

Jason,
Sorry for taking so long to get to you, but I spoke with the business manager in the leasing office. Most complexes are managed by a management company. The business manager is usually the one that makes all of the decisions. Hope this helps...

Unknown said...

We have been testing a location at the $1 per day pricing. I hoped this would increase our movie out count. This location is nearly identical to another location we have at $1.99/$.99. It’s still a little early to tell how it’s going to work out, but so far it looks like initial rentals are about the same as the other location. Interesting the customers return the movies quicker at the $1 per night location. Weird. We’ll let it go a bit longer but I’m sure we’ll be switching this location to $1.99/$.99 soon.

Joe Fusco said...

What do you say on a posting to customers before raising the price, also when raising the pre auth. How do you "break the news"?

I am still at first night for pre auth and $1 a night everynight. I want to go to $7 or $8 for the pre auth and something like $1.39 for first night and $1.19 each additional night or $1.29 every night.

Would you break the news all at once and change both together or one at a time.
Thanks for any input

Mike at ReadyDVD said...

I don't tell the customers about the PreAuth going up. I haven't had a problem with it. If they have a question, they are pretty good about calling me. By the way, if you raise your pre-auth you should should see a reduction in your charges from the merchant account. If you read about the PreAuth in the blog, you'll see some interesting info. that has come to me from the developers of the software and how it works.

I am now using $7.00... It used to be $10.00 but I dropped it because $30.00 was pretty high for the customers renting 3 movies.

Sincerely,
Mike Weiland
http://readydvd.com

Joe Fusco said...

Question
I'm raising price from $1 to $1.50 effective 3/1/09. For people that have movies out before the increase do they stay at the $1 or does the nights after the 3/1 change to $1.50 for them.

So far after the 1st week I only got 2 calls on my change to $7.00 preauth. Not bad. Both had to do with debit accounts where the $7 took 2 days to release.

Mike at ReadyDVD said...

I believe that it's whatever you started with because I tried to change my Sunday charge at one of my machines to $0.00 for that day because the store is not open. The machines are not capable of doing that for some reason. I called and asked DVDNow. They said that option is not available in the software. In your situation, since all the charges will be $1.50, I don't know exactly what would happen. I think that it's going to stay with what they started with though.

Mike Weiland
http://readydvd.com

Anonymous said...

Has anybody heard anything about the subscription deal lately? It sounds intriguing to me.

Joe Fusco said...

The 1.50 was only charged to new renters and not for movies that were out before the change.

About the change. I did go to 1.50 on 3/1. My rentals went from high 20s and low 30s per night, and into the 40s on good weekends, to low to high teens. Was this a slow month for everyone, maybe the better weather or did my new price scare people away.

Please tell me it was slow for all.

Mike at ReadyDVD said...

Ours slowed down too. There weren't many good movies out at all.

Mike Weiland
http://readydvd.com

@crownvending said...

Mike, Thanks for sharing your insight and experience with DVDNow Kiosks. I'm in the process of starting a Kiosk biz in Hawaii and reading your blog and the comments is very informative.

Thanks.

John.