(Thanks, Dan)
Brainbag, I TOTALLY understand your desire not to rely on dropshippers, and do agree.
As far as your question about quantity, consider this: If a consumer knows he wants to go on-line and purchase a "mainstream" CD or DVD, he already has at least twenty low-cost places to order it. Let's take
The Bourne Ultimatum DVD as an example. How many of those could you sell if you had it? Those twenty on-line retailers are selling about 31 units a minute of that SKU today (and it doesn't street until 12/11). Not to sound harsh, but if you're not in that league, why would a wholesaler bother with you?
Let's assume you ARE in that league. The minimum quantity you'd then have to buy would depend on the product and on the label or studio it came from. For a hot new release, they may process more than a half-million pre-orders through their Internet retail outlets (in one of several regional facilities this morning, a secure space twice the size of a gym had wall-to-wall laundry carts filled with pre-addressed Priority Mail envelopes that contained the DVDs that are streeting next Tuesday -- tens of thousands of units that consumers had been ordering on line, just waiting to be shipped). Before the envelopes were sealed, those annoying-to-peel-off labels were scanned and entered into several tracking systems for piracy protection, and so everyone who gets a cut will be able to audit and verify sales. So it isn't just about the product -- you also need the facility, equipment, and technology to do that for mainstream label/studio releases.
Let's assume you have all that. Being able to get "hot" product to sell always means having to accept and push some not-so-hot product from the same label or studio. For instance, for retailers to get
The Bourne Ultimatum on DVD, they are generally having to accept certain quantities of other Universal new releases, too -- like maybe
Bring It On and the
Tammy trilogy. Major retailers can afford to take that stuff and have it sit around awhile (and they do so rather than risk running out of
Bourne,
High School Musical 2, or something else a mass audience might want). Since they have warehouse space and existing distribution networks with trucks to ship back whatever doesn't sell after six months, the cost of taking and returning all that is low. With the discounts offered on line, the unit profit margin is sometimes barely over a dollar on hot product -- so you have to have ample cash flow from the other products you're selling to be able to tie up money for six months on items you probably won't sell (and to pay for shipping back unsold product when it can finally be returned).
What I'm saying is that it's hard to compete with the high-volume, sophisticated, and fairly efficient operations that already exist for putting mainstream CD and DVD physical product into the hands of consumer. Even so, if you believe you have the existing customer base and volume, the facilities, technology, and money to compete, then you might contact one of the companies I mentioned and see what happens. That's sort of how one of the major truck stops became a CD and DVD reseller (they also followed the niche/genre strategy I suggested in my last post - for example, heavy emphasis on country and comedy CDs in their case).
As for other products you could sell, it's exactly what I suggested in my previous post. Ask yourself, "What products do people want?" If you know people want an item, then look to see if there's a retail outlet for it on line. If there's not, or if you believe you can beat out whatever on-line retailers exist, then that's an item worth considering and exploring -- and the suppliers or wholesalers for that item will WANT to hear from you (because unlike the mainstream CD/DVD example above, you will provide them with a new outlet that can make an impact on their bottom line).
Success in SMALL business is often all about being outside the mainstream. Selling 100,000 units of a mainstream DVD with a $1.20 unit profit margin nets you $120,000, but it may also require you to sit on $175,000 in lame inventory for six months, and ship it back at your expense. A better choice might be to offer the DVD of a film with a small cult following that no one can find anywhere. You might only sell 1,500 units, but with a unit profit margin of $14.27. That's $21,405 in profit on that item with fewer expenses, returns, and cash flow problems. Build a catalog with a few dozen things like that and you could have yourself a nice little on-line business.
I've probably said too much . . . good luck.
