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!
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 firstname.lastname@example.org; 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