Archive | September, 2007

Guest Poster: Matthew Wolfe

I recently imported all my blogs into Facebook. There Matt Wolfe took some interest, and was generous enough to send me some tips on the DVD rental idea. Although I can’t personally run a business like this, I thought his points were WAY too good to pass up, so I asked if I could post his message to me as a guest post. I hope you all enjoy it.

“Hi Paul! I haven’t seen you in a while. I saw your note and decided the opportunity to offer my two cents was too good to pass up.

I think it’s awesome that you are contemplating the merits of a business venture. I haven’t run or began my own business yet but I offer my advice because I read about businesses every day in the Wall Street Journal, Yahoo Finance, thestreet.com, etc. I encourage you to seek out the advice of actual business owners/creators, to read columns and articles online about starting your own business, etc.

(By the way, I checked deep discount’s website, and they are cheap and have free shipping. For instance, the movie October Sky is only $8.59 w/ free shipping. You’ve Got Mail is 6.62 w/ free shipping. Not bad. However, there are better deals if you look at amazon, half, ebay, froogle.com, etc. and are willing to accept a used copy, although there are sometimes new copies for even lower than the used copies.)

Here’s a non-exhaustive list of questions to answer before you begin with this venture:

What are the limitations of your client base? Just your dorm? Just the people you know in your dorm? Or anyone with a pulse on campus?

What will constitute a “day” of rental? If the person accidentally keeps the movie for 13 days (they owe you $13), have they automatically bought it? Will you offer to buy/trade movies from other people? How many copies of each movie will you have on hand?

The movies in the highest demand are new releases (new’s). How many copies of new releases will you buy? What is the cheapest source for new’s? It’s not Deep Discount – they don’t sell The Pursuit of Happiness or probably any new’s.

Why will clients choose your service over Blockbuster’s or Netflix’s mail-service? It is important that you identify how you provide value beyond what they offer and then capitalize on that.

Just as an idea for the extra value you provide, you offer the benefit of being able to watch the movie you want that day/immediately. With mail-service, you have to wait at least a day or two for the movie to come in. Then again, are you familiar with Netflix’s instant online viewing once you’ve rented the movie? They let you view the movie online even before the DVD has been physically delivered to you.

What forms of payment will you accept? Cash, check, credit card, anything else? My inclination is cash only at first, but you should certainly look into the cost/benefit of accepting credit card payments. Anyone can do it, I think I heard one guy tell me he has a wireless credit card machine that he pays $70/month to use (plus prob. a percentage of all transactions).

What about your competitors? If your business were not in existence yet, what would most people do to rent a movie?

Read about your competitors, I think Block & Net are operating at very thin profit margins, if any at all. Why is that? Was Block ever a very profitable business, and why did profitability decline drastically? What does that mean for your business.

Those are just the questions on the top of my head; I could think of several times more. I wish you the best!

Regards,
Matthew”

I think everyone can take away something from that message. I have invited Matthew the opportunity to guest post on my blog in the future if he so wishes.

If you wish to be posted as a guest poster on dormroombiz.com, just send your write up (blog) to recchiap@gmail.com; I’ll review it, and there is a good chance I will post it if it is relevant. Then you could be a published writer online 🙂

Thanks again Matt, and thanks to everyone reading this.

Again, if you are reading this on the imported facebook account, you can view my full blog at www.dormroombiz.com

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New Business Idea

So while I was looking for some wholesale DVDs I had a business idea that I can’t really pursue, but many people out there probably could. It takes a small investment, but it could pay off. If you bought a bunch of movies wholesale, then rented them out of your room, you could make some good money. I figure you can get most DVDs for $10 somewhere. If you rented them out for like $1 a day, you could easily make the money back. Start with the movies you already have, and maybe buy a couple real popular ones.

You could make a list for people to see what you have, and you could even find a way to mark whether it’s in stock or not. The main issues would be dorm rules. You would need to make sure there’s no stores with really cheap rental fees. The dorm just to the south of mine rents out DVDs to students for free. Is this the norm at most colleges? If not, you might be able to make a fair buck. Make sure you write down who has what DVD, DON’T rely on your memory, that is futile, you’ll forget, and someone might steal your DVD. Also write down what room they live in, in case you need to go get them. You might also have a policy in case someone breaks a DVD (ex: you break it, pay $15 to buy it)

Beyond that, you could offer to sell the DVDs to the people for like $13 after they rent it (SPECIAL: Buy the movie and get your rental fee back!) You still make a profit, and have enough to get a new DVD to replace that one.

Well, just a thought; I wanted to get it out there before I forgot the specifics I had cooked up in my head.

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Some Products Found

I’ve found some products to use. I’m making customized magnets (fridge magnets). I’m also making these really neat photo holders. I’ve made 2 of them so far to hold pictures of my god daughter. I also plan on selling temporary tattoos (great upseller) and glow shot glasses. Any other ideas out there? I’m working VERY hard on getting these products going.

I’m also starting to think about store design; I’ll need a shopping cart, but I can use Paypal for that. I do need to find a webhost, as well as a clever name for the store. I could use some ideas on that too. I’m pretty excited about this. Even if it doesn’t take off, it’s still something I did, and that’s a good feeling. I tried hard with e-bay many years ago, and was rewarded for that, hopefully this will pay off as well. I wish I could find like wholesale DVD’s and sell those, that would be great.

Well I just wanted to keep everyone updated on my current progress with the store.

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The Business is on it’s way

I’ve been working on finding products, and so far it’s going pretty well. I’ve decided I will be selling clever/cool looking magnets. I ordered a sample of magnetic ink jet paper, so I can see if it will work in my printer. I’m also making a thing that can hold like 4-8 pictures, so people could get one or two of these for their dorms.

I’m currently figuring what else to sell. I would need to dropship most of the products, and ideally I find a site that can dropship most of the items, so I don’t have like 4 different shipping charges. I found a site that can send out DVD’s, but it’s based in Europe, and after the exchange rate, it’s not as much of a deal as you would think. I’d like to send like laptop accessories, ipod accessories, stuff like that. I just need to figure out how I’m going to do this. I can’t hold any inventory really, so I’ve got to work hard at getting very small items, or finding an affordable dropshipper.

I also ordered some shipping supplies, mostly priority mail. I think I”ll send most products via priority mail, since it has free shipping supplies. It costs a bit more, but it is much easier to ship out.

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A business I can get behind

So I finally decided that I’m going to open a small online store selling things that would be useful in the dorm rooms. I’m working on a list of items right now, and now I need to find vendors. This will not be fun, but it’s necessary. I figure the people I’m targeting with this blog would be likely to buy some of these things, and since I’ll be going for low margin high turnover (VERY risky for a small business) I’ll need to get word out. However, with low overhead, I won’t be out too fast if it fails, since I’m not paying any sort of monthly fee. My goal is to make $5 in the first month, $20 in the second month, and $60 in the third. I think this is all plausible, and that’s profit numbers.

Any tips? Anyone out there know a good way to find vendors. I know Neville from his financial blog has houseofrave.com and he doesn’t even keep most of that stuff in stock, just handles the orders. Maybe I’ll try to ask him how he got his vendors in line. Ha, he runs one of the most popular financial blogs out there, and I want him to answer my question…think he’ll respond.

Well that’s all for now, just wanted to let everyone know what I’m up to. Short one. Hopefully next time I post I’ll have some sort of store going.

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