How do I start a DVD rental business?

How and what do you need to get into this business? I have two teenage sons who would love to own a dvd rental company. It would be a chance for them to learn and generate money. If you could contact me on how to invest into a machine -- I would appreciate your thoughts.

Dave's Answer:

If you're talking about just opening up a storefront or even a room in your house where you'd have a library of DVDs that people could rent for a dollar or two per night, I am pretty sure that the only cost you have is inventory. But that's not easy to manage...

If you look at how companies like Blockbuster operated, you'll see that when a hot new movie comes out, they'll buy dozens, if not hundreds of copies for each store, incent people to return the movies quickly so they can have lots in active circulation, and then as soon as enthusiasm dims, put them up for sale as "previously viewed". After a while longer, they go into the bargain bin and might be $9.99 or cheaper, far cheaper than the brand-new DVD would cost.

In a perfect business where there's zero overhead, you could buy new movies for $25/DVD and rent them out for $2/rental 50-100 times before the disk is trashed, making a pretty good profit (that'd give you $75-$175 profit/disk). If you can get it perfect. The problem is, you'll buy the wrong movies, people will break the disk, some manufacturers will make disks that only stand up to 15-20 playings, and you will have overhead, inevitably.

The advert in the local paper, the fliers, the computer you use to track rentals and followup on people who forget to return the movies, the write-off for theft, loss, a business license, etc., all of these are going to be overhead costs and I'd be unsurprised to find out that it's not insignificant, and doubly so if you have any sort of retail space.

But you're talking about an automatic DVD rental device like those used by Redbox and the like. Definitely a cool idea, but remember that not only are those devices going to cost a good amount (I'm guessing over $50,000/device, actually) but you are going to have to rent space in front of, or inside of, a retail merchant. They might want a flat fee plus a percentage of the rental revenue.

Having said all of that, I'm sure that rental companies get DVDs for far less than us consumers. There's no way that Blockbuster is spending $25/DVD when they buy thousands of copies of any given movie for all their outlets. That doesn't mean you could get in on the deal if you're buying 2-3 copies of a given film, but you should be able to work something out with a distributor. If you have a business license and storefront or other sign of legitimacy (and "selling them on eBay" is not likely to work :-)

Perhaps someone who has actual numbers can jump in here, but I would say that acquiring a DVD rental machine is likely prohibitive for your sons, but an informal out-of-the-house operation could probably work out pretty well and would be a fun business.

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Categorized: Business and Management (Article 7593, Written by Dave Taylor)
Tagged: blockbuster, dvd rental, hollywood video, redbox
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Reader Comments To Date: 46

Grammar police said, on October 15, 2007 12:50 PM:

Sorry to be anal, but...

"unsurprised to find out that it's not insignificant"

Ack! Triple negative!

Sorry, but these sort of things keep us up at night.

paul ryazanov said, on May 25, 2008 8:43 AM:

When you open your own dvd/video game rental business you are always suppose to remember that the key of the success is the right choice of the software. You have to make sure that video game/dvd rental software you are running absolutely secure, powerful, stable and ready to grow together with your business. Thats why its important to decide what system will suite your business best - let us show why choose W3Rent rental software. Contact our team using info at w3rent . com and we will response to any questions you may have about rental business.

John said, on March 21, 2009 8:13 PM:

How much money is needed to start the business

DVD Rental said, on August 23, 2009 2:26 AM:

If you follow this advice you will be running an ILLEGAL business... you cannot buy retail dvds and rent them out.. you MUST buy RENTAL DVD licences which cost more to do this legally, otherwise you could go bankrupt

noxolo said, on October 16, 2009 3:02 PM:

where can I buy a rental DVD licences business. And documents will I need.

neoanderson said, on December 8, 2009 2:15 AM:

Why did this thread die down? I had the same question that was posted last. Where can i buy DVD's which i can legally rent and how much do they cost? Approx price for a latest release DVD.

jason said, on December 24, 2009 1:36 PM:

i have recentley opened a dvd rental store in a small town. I started with some dvds from a pawn shop about 150 and than i signed up with access ingram a dvd dist. than i prchased a winrental software. than purchased clear slimdvd cases well any way to give you an idea the people at access ingram are real good or my sales rep any way i get two of each a movie and really i dont have to do too much just i could go into great detail about this. i can be contacted at oc319s@hotmail.com i do have dvds for sales for starter invnetory. and other things would be glad to help.

nicole mckinlay said, on December 29, 2009 6:55 PM:

I heard that dvds where going to be a thing of the past in the next couple of years an we are all going to get our movies of the net if we want them through downloads. What do you think?

Chum said, on January 3, 2010 5:25 PM:

Movies will always be around for several reasons. I had nexflix and cancelled. When I want a movie to watch the heck with waiting for the mailman. Redbox you gotta stand out in the cold and wait, and watching a movie on a computer screen? NO WAY! If you want to rent movies you must have VERY low overhead. For example you could fix up your garage and put a store in. Remember you also need to sell soda, candy, chips, etc. A membership with Sams or Costco really helps too.

Jony said, on May 10, 2010 5:23 PM:

I am an assistant manager of a rental DVD store in the UK. Blockbuster are able to get so many copies of any particular film into stock as they themselves rent the DVD's from the major studio's, only purchasing a small amount for them to actually own, and sell on once interest has died off. This is their mistake, meaning that they actually generate very little income, which all goes back into their oversized and badly ran stores. (this is my own personal opinion only!!).
Our own independant store purchases all its copies outright as rental copies, or ordinary 'not for rental' copies if they are authorised and licensed by the licencees, for usually 35 pounds each, which is industry standard. We can usually generate 50 pounds prifit per disc. Also, we keep a comprehensive range of older films, which generate good second tier income from film enthusiasts and auteurs, something Blockbusters also fail to do, preferring to throw this possible avenue of revenue away by selling them on at the earliest opportunity. We are proof that the rental store can still produce a steady viable business opportunity, if it is well run. Just because Blockbuster may be on their way out, it doesn't mean the rental industry as a whole will die. There's life in this old dog yet.

rebecca said, on June 21, 2010 12:19 AM:

hi i justed like to ask were would i get the dvd and gsmes for my new bussiness that iam thinkin of starting

Jessica said, on August 13, 2010 10:03 PM:

I am opening a store of my own in a town that was very profitable for movie gallery. you can get dvds for a brick and mortar store through vpd for about $25 a copy or you can sign up with rentrak if you have reasonably good credit and they take somewhere around half of your profits but you can afford to put a bunch of copies on your shelves. redbox purchases their movies from redbox from what I understand because the studios will not do a rentrak type deal with them as of late because they feel it cheapens their product to have them for $1 a night. for my sake I hope they continue to hold to that belief. I really like alerion as a rental software because it is cheap. startup costs are a big deal when banks will not make loans on small businesses and you can always upgrade. rent of building space is a large expense but you might want to check with landlords around town who have had vacancies for a long time. they may be able to lease you a part of their space for much cheaper until you get revenue going. towns the size of 100,000 are best for rental stores especially in rural areas because there are a lot of people who dont feel as comfortable with technology. they prefer real people and are more likely to shop at a video rental store. I have seen redbox type kiosks on the internet for around 8,000 but they were used. you just have to google google google to get most information.

Jake001 said, on August 30, 2010 4:17 PM:

Hey guys - I recently rented a DVD drom my local Blockbuster, and on the disc, it had 'Not A Rental Copy' written on it. Is Blockbuster breaking the law, by doing this?

Dave Taylor said, on August 30, 2010 10:59 PM:

Jake, that certainly sounds wrong. You could have a bit of fun with it: take clear photos of the DVD, the Blockbuster case, etc., and mail them to the legal department at the appropriate studio (you can find their address online, I'm sure). :-)

Jake001 said, on August 31, 2010 2:21 AM:

Ha - cheers Dave! That sounds like a good idea :) i'll have a look on paramount's website.

Stafford said, on September 6, 2010 6:19 AM:

I am in New Zealand and am interested in opening a video store. If anyone has any information on distributers of rental copies for this part of the world I would be very appreciative.

Luke said, on September 15, 2010 4:31 AM:

Jony,

I'm currently looking into setting up my own independant DVD rental store. What issues did you face in setting yours up. Esp in these days where lovefilm are very popular.

I am based in the UK.

Thanks,

randy said, on October 1, 2010 6:59 PM:

I've seen conflicting info on this some say you can rent any dvd. The license is for group presentations. Don't know the real deal.

randy said, on October 1, 2010 7:04 PM:

Never mind what I just said it's just dawned on me -- a little thing called royalties. So they'd have to be more money.

Leanne said, on October 19, 2010 3:59 PM:

Just like to say if you really want to know how much it is to start a business in rental why don't you ask a rental store, they don't get rippy as long as you aren't asking for their supplier, they help out with info on how to get started and they are normally very nice

Jony said, on October 20, 2010 2:48 PM:

LUKE,
The single most important thing to remember is that you do need a licence to rent out DVD's. I dont know where that came from, but I think your local council is the place to start. Then, if you want to get supplies as in rental copies, look at going to www.mystorm.com. You do have to ring up to get full access to the site tho, as this saves a lot of time wasters. Then make sure your location is good. Look for the poor areas, deprived housing estates etc, as this equals a lot of people with perhaps no job, a lot of time, but not much money to spend. These are your mini gold mines, your A1 target audience. Then make sure your prices are cheap enough, and be nice. You want return business, day in day out.

christine said, on November 1, 2010 5:16 PM:

I recently closed down my store after 6 years due to conflict with school and my other business. If anyone is interested buying the inventory off of me please feel free to do so. I also have lots of information on great companies you can purchase movies from legally and rent them out legitimately. I also have a great computer program I use for DVD rentals and inventories.

Dan said, on January 3, 2011 10:32 AM:

Christine, I do have a few question's for you. send me. how do I get a hold of you?

Paul said, on January 5, 2011 3:58 PM:

Hi Christine! me too has some questions to ask you if i may, as i am currently researching this market in persuit of doing business in this area. So how may i contact you if you don't mind too much in me asking a few questions?

Paul

Johnny said, on February 15, 2011 4:38 AM:

Hello Everyone,

I also want to open a local DVD rental business. I know redbox is booming here, but they also do not have everything and sometimes people do not want to pay with a credit card. I am planning on doing in home delivery dvd rental business. I will have a website set up with all the information about the movie. I will be sending out weekly newsletters about the new dvds coming out that week. Anyone can call us to see if the movie is available and all. But, my question is, where can I but legal dvds movies to be rented out. Is it an actual piece of paper I need to have to make it legal or how does that work. How do you know if the dvd is legal or not legal when you are at a store or renting in from a mail order dvd store? I am just learning all about this, and I am ready to start. All I need is the information about the dvds. People tell me that they go buy dvds from Walmart, but I know that is illegal. Please let me know, thanks.

rolando said, on February 21, 2011 9:18 AM:

Hello i am thinking about opening a rental video business where the members pay a fee and they could see all the movies we have. the fee will be every month. my question to you is do i need a special licensee for this or could i just go and buy the movies and put them on the hosting company and rent them on my webpage please if you know the answer to this let me know thank you

John Hawj said, on March 7, 2011 12:17 PM:

You can rent out your DVDs that you buy at WalMart or any other places. You can not rent out copies of the DVD (buy a dvd and make copies of it) but you can rent out the DVD that you bought. There is no such thing as a rental license or anything like that for DVDs. Redbox and any other bigger organization buys the DVD and rent them out. They may buy them at a cheaper price due to the contract they set-up with distributors but the contracts are for cheaper DVDs (buying a lot of it) and not for a renting license.

Tiaan said, on March 23, 2011 11:32 AM:

Hi there

I would also like to open a DVD shop but I need more information. Finances are a challenge! I have a potential investor but he wants a business plan.Which I understand and belief is very necessary. Do you have more information that can help me with my business plan or even one that I can work from?

SolidaS said, on April 21, 2011 7:03 PM:

Hey there,

this is a great thread that has given me alot of usefull info..

one thing i cannot find info on is the game side of things...im led to believe that i can purchase games from a retail outlet and rent them out without any sort of special license, but on the back of my game box's it says renting is strictly prohibited.

im lost and cannot find any info at all on this law..

please help :)

Catieann said, on May 24, 2011 5:14 PM:

I am looking to start my own small video and game store .
But I am looking for some information .
Any information actually .

Paul Toller said, on June 19, 2011 7:45 AM:

Really nice tips are provided by you here regarding how to start DVD rental business.This information would be very useful for me because I also want to start my own business.

Sahar said, on June 19, 2011 9:11 AM:

I need information about how a DVD rental shop functions without any computers and only based on paperworks...plz helppppppppppppp
TNX

sadiat said, on June 25, 2011 5:06 PM:

Hi, I want to start an online video rental, I only want to focus on Nigeria movies. I have everything in place company registered, business plan, website. But I don't have video to put on the site, I don't know if it is legal to get someone who can buy me the original dvd in Nigeria and I will upload it on my site. However my business plan include paying royalty afterward. Don't know if doing things this way is legal because of UK and copyright law as I will be operation from UK. Pls help.

Russ said, on August 15, 2011 11:38 AM:

All these comments are interesting to me because I have a way to rent movies without the use of dvds or streaming. I have a provisional patent on the process but know nothing about the rental business. If someone could enlighten me with useful info I might be persuaded into a partnership.
lastgoodguy1234@yahoo.com

Wale said, on September 14, 2011 4:51 PM:

Hi Sadiat, How far have you gone with your plan? I could be of assistance where necessary. Email: akinwalemuse@yahoo.com

ABRAM said, on November 2, 2011 5:02 AM:

Hi I am looking to start a small dvd rental shop, Is there a license required and where can i obtain one?

Ralph said, on November 20, 2011 5:10 PM:

I am starting an online business looking at selling and possibly renting blu-ray movies only. Lost job in the steel industry and see this as an opportunity. Would really like to know how to get onto local suppliers. I also have a trading patent which I require to develop showing how my process works> I require a product used alot and cheap enough for me to stock. Once proven I can sell the process to the rest of retail. Email if you have any information or are an IT guru looking for a partnership. I live in Wollongong. ralphvan11@hotmail.com Thankyou

Ralph M Bohm said, on December 26, 2011 1:08 PM:

For Christene,

Could you PM me as well? I am interested in starting up a type of Foreign Indie film rental business.

Kate said, on December 30, 2011 5:24 PM:

This is message is specifically for Christine, if you could please email me, I would love to talk with you regarding the closure of your video store and all your software and stock.

Thank you very much & Happy new Year to all,'

Paul said, on February 6, 2012 3:58 PM:

Hi Guys,
I have been in the home entertainment industry for the last 25 years, and still own two rental stores and still wholesale to around 20 independents.
Its still a great business to be in, and a tough one.
We have had to adjust to many things over the last 20 years, but we are still here and doing great business in this recession as its a cheap night in to watch the latest films.
Our sales of sweets popcorn drinks etc has grown considerably month on month in.
Blu ray rentals have really started to motor now, and stocking multiple copys of top titles is a must.
Store presentation is very important, along with friendly staff who are up to speed on the library.

Atmosphere in the store is paramount, if i ever walk in and there is no music or our 42 inch plasmas on playing the latest title there will be hell to pay.

Any one who has any questions im always willing to help them.

Paul

Video & DvD store owner & wholesaler for the last 25 years and hopefully the next 10 years as well, i love this industry.

email me at dvmcltd@hotmail.co.uk

Jason said, on March 12, 2012 2:54 AM:

For those of you looking to open a video sales & rental store in the USA (region 1) I've got exactly what you need, all in one place at a once in a lifetime bargain price!
I had to close my store about a year ago due to physical problems I was having. I've got everything you need to be up and running in a few weeks and with a substantial inventory! I've got 8-9,000 DVDs all barcoded and in rental cases, also computers, scanners, credit card terminal, computer point of Sale software ($2,500 per licence), soda coolers, asst gumball & vending machines, some shelves and display racks, industrial disc resurfacing unit ($2,000 new) ... Did I leave anything out? I'm not kidding you could literally be up and running by the end of the month! I love this business and would live to see you be successful in it. This whole package is priced cheap because I am anxious to get started in my next business venture... $25,000 is just over $3/DVD and I'm growing in all the other stuff as a bonus. Seriously act fast because it will be gone if you wait. Noodle3150@yahoo.com

http://m.ebayclassifieds.com/v?adId=17684330

john said, on March 13, 2012 12:58 AM:

i have a few questions and very different idea on renting i have been talking to my local council and a few other places about it, but noone really knows how i would go about my idea. some say that the copyright law would be a hassle for me and some say that as they are being used for a rental purpose then i should be fine i wold like to here from someone that is in the industry or has been in the industry and has no offence to signing a confidentiality agreement on it to discuss with me further as the idea is different and i am not willing to just plaster it out there for someone that already has the answer to take the idea. anyone that is willing to help me along with this project and supply me with decent helpful information will be greatly appreciated please email me at john_boy_135@hotmail.com please use dvd rental as the subject thanks

sadiat said, on March 22, 2012 2:04 PM:

Hi Wale, i only saw your message yesterday (21th of March 2012), pls i will be very glad if you can help me. i sent an email to you (akinwalemuse@yahoo.com), you can also mail me olaakindele@yahoo.com. i will be waiting to hear from you.

Kyle said, on March 25, 2012 1:17 AM:

Hey Guys i see all your post but the bottom line is Video stores are old news. The question i have is i plan to build a website that allows users to rent movies online. Where do i licence dvd's for people to download from my site ??????????????????? please help email me at bikinicanada@live.com Kyle Lewis

Kyle said, on March 25, 2012 1:19 AM:

Id also like to add what the heck happen to Christene ? Kyle Lewis

Alice Sands said, on August 10, 2012 11:50 AM:

I recently bought out a 5,000 square foot video rental store (major name), and have between 12,000 and 13,000 DVD's (most with locks), DVD unlock system, all the store heavy duty shelving, displays, cash drawers, 12ft 4in wide x 3ft deep x 7 ft tall custom locking display case, display carrousels, Sensormatic anti-theft security system, etc. The only thing we didn't save was the point of sale equipment, as it comprised old CRT's, but we do have the scanners. Great opportunity for someone that would like to set up a new business. Please let me know if you have an interest.
..

I do have a lot to say, and questions of my own for that matter, but first I'd like to say thank you, Dave, for all your helpful information by buying you a cup of coffee!

I do have a comment, now that you mention it!

How do I start a DVD rental business?

Reader Comments To Date: 46

I do have a comment, now that you mention it!

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