How do "legit" dvd suppliers on online retailers make their profits?

**Christopher Anderson** · 01-30-2010 03:21 AM

I want to run my own small online retail dvd business of just me lol. I used to sell the illegal copies on boxsets on ebay but its not worth the trouble. But when ordering from a legit full service studio-direct wholesale distributor of pre-recorded DVDs how does an online retail salesman make decent profits? I know volume plays a key role in a successful dvd retail business but cmon these prices leave little to no margin from sellers. I received an email reply from a business coordinator from vpd distributions and one thing that stood out to me was this:

New releases tend to average about $17.50 to $21.00 regardless of discount. (that price range includes the discount)

Catalog titles (i.e. anything older than 6 months) run $5 - $15 depending on how old the title is, studios, etc.

Blu ray product is approximately 28% off MSRP.

Used titles run anywhere from $1-$8

Discounts are based on volume and upon opening your account your discount will be set at 30% off MSRP. The higher dollar volume you do the better your discount will be.

Shipping is $1 per pkg. if you spend $800 a month applied to a weekly order of $200 or more. Orders under $200 are charged $7.00 or accounts not shipping $800 a month are charged the $7.00 per shipment.

How is one supposed to be able to compete with other sellers who have cheaper pricing on these sites like ebay and amazon let alone start their own website and compete with websites like amazon and ebay for traffic. I always thought those big legit companies offered cheaper prices than that. Now i feel like my plans have being derailed seeing that..or maybe I just dont see the bigger picture

**Christopher Anderson** · 02-03-2010 02:02 AM

And is there a such thing as authentic box sets being wholesaled?

**omahacubfan** · 02-03-2010 02:11 AM

Christopher - That is your main issue with entering a business like this. You are going to see so much BIG TIME competition that will be near impossible (EVERYTHING IS POSSIBLE) to beat out. Amazon is the world's number one reseller for a reason - they are huge and they have such a sophisticated supply chain it would blow both yours and my mind.

Also consider the fact that disk movies and almost anything disk seem to be on their way out. I think it would be very difficult (again, EVERYTHING IS POSSIBLE) to compete with companies like Netflix (cheap monthly rental plan, unlimited streaming of a large selection of movies), Amazon (free shipping on most everything and entirely cheap prices), Walmart (again, super sophisticated supply chain), and Redbox ($1 rentals per day). Digital distribution is where the movies of tomorrow will be at.

My personal advice is that you avoid this business as I personally wouldn't be able to turn a profit (or much of one) with a business like this.