How to Start a Video Rental Store

Aspiring video store owners should look carefully at the rental industry before opening for business. The growth of video rental chains such as Blockbuster and Hollywood Video in the 1990s hurt smaller stores throughout the United States by undercutting prices. Netflix has forced Blockbuster to create its own online rental service to stay competitive, leaving independent video stores in the lurch. If your love of movies leads you to open a video rental store, you will need to offer great prices and unique selection to stay afloat beyond the first year.

Things You'll Need

• Retail space
• Point of sale hardware and software
• ID card printer
• TV sets
• DVD players

Instructions

Open a Video Store

1. Detail your competition for the video rental business as well as your unique services in a business plan. List every chain and independent video store in your city to demonstrate the level of difficulty for your new business. Indicate secondary services such as video game sales, DVD cleaning and video equipment rental that can separate your store from competitors.

2. Choose a retail space close to a local college or concentrations of young professionals who are prolific video renters. The ideal space for a video store is long and narrow to facilitate two full walls of videos and games. Your storefront window should feature movie posters, a listing of hours and movie memorabilia that will appeal to avid video watchers.

3. Acquire point of sale (POS) hardware and software to facilitate easy rentals and restocking of videos. Your checkout counter should have a computer, a bar code scanner and a credit card reader to handle rental fees. Locate POS software from a company that can print customized receipts, keep running tallies of inventory and create end-of-day reports.

4. Invest in an ID card printer from a company such as MAGICARD to create membership cards for your patrons. Your ID cards should feature a bar code, the customer's name and the date of membership if you plan special offers for long-time members.

5. Conduct research into video and video game wholesalers such as Video Group Distributors that can keep your store stocked. These wholesalers sell VHS, DVD and video game units for a fraction of retail due to the high volume of orders they receive from video rental stores and retailers.

6. Calculate the number of DVDs and video games you can stock in your video rental store at one time by looking at available shelving and funds. Your store should be as full as possible with new and classic films along with TV shows, documentaries and short films that will attract diverse groups. Avoid the temptation to purchase cheap DVDs and video games to fill your shelves, thereby sacrificing the overall quality of your selection.

7. Hire an assistant manager and a handful of part-time stockers and checkout clerks for your video rental store. Train the assistant manager to oversee reshelving, stocking and end-of-day operations to ease your load in the early months. Your part-time workers should be familiar with the inventory to help new customers find their favorite movies right away.

8. Add wall-mounted TVs wired to DVD and VHS players behind your checkout counter to play movies in your video rental store. In addition to previews and snippets of movies made available by wholesalers, your store should play classic movies that will excite interest in your selection.

9. Price your video rentals with your monthly expenses and your competition in mind. Your rental rate should be a certain dollar amount per night to make payment easier for renters. This rate should be competitive with other video rental stores to prevent customers from heading to undercutting renters.

10. Rely on word-of-mouth and creative marketing to let the community know about your video rental store. Brainstorm ideas with your staff including reenacting movie scenes outside of your store and creating short videos for online distribution. Use your initial customers to get the word out by offering referral bonuses as well as free rentals for every 10 or 15 rentals.

11. Place soda, popcorn and candy near your checkout counter to attract another source of revenue. Recreate the movie experience by placing candy boxes underneath a glass counter op. Your patrons may be willing to pay a bit more for your food offerings to avoid the inconvenience of stopping at a grocery store or gas station.

12. Finalize your video rental agreement before opening your video rental store for business. Your video rental agreement should be filled out at the beginning of each membership to review rental costs, membership benefits and late fees. Print a few hundred copies of the video rental agreement initially to handle high volumes of traffic in your store's early days.

Tips & Warnings

• Adjust your inventory to reflect seasonal changes that bring in different demographic groups. Develop a rotation for "featured" movies that covers major events like Christmas, Halloween, presidential elections and sporting events to stay topical.

• Maintain a special section of B-movies, independent films and foreign cinema that cannot be found at major video stores. Research the selection at local Blockbuster stores as well as independent renters to find gaps in selection.

• Discourage theft of your video inventory by applying hefty late fees to each rental. Your rental agreement should spell out the size of fines per day that must be paid to continue renting at your store. If your rental fines are too low, customers may determine that they can keep their videos and use other stores in the future.

Resources

• MAGICARD
• Video Group Distributors