This 6 year old video retailer with established customer base, is an internet based company that is easily relocatable, with the need for about 500 square feet of storage and fulfillment space (assuming an owner does not seek to outsource this function). Together with its parent company, which is content producer and wholesaler of many of the same products, the operation is part of the enormous entertainment industry. The firm’s relationships with its suppliers provide it a significant cost advantage, as it helps insure they can purchase DVDs at the lowest possible price. The enterprise’s proprietary software allows them to scan market prices to ensure they offer the lowest priced products.

This company occupies roughly 500 square feet it does not pay rent for, as it is housed in a related company’s facility. New operators may negotiate a fair market value lease rate at this facility, explore reestablishing it at any facility they choose, or potentially outsource fulfillment and distribution entirely. The operation consists of a storage, packaging and shipping area.

Given the tightly knit nature of the entertainment industry video wholesalers and retailers, this firm’s long standing stature and its relationships with suppliers, content providers, vendors and customers help to provide it a significant advantage over industry entrants.

New operators may wish to continue to operate the already profitable enterprise ‘as is’, or they may want to add their own video or other retail products. While the parent company wholesales the products, new owners may want to explore entering into this higher volume market as well.

Posted Jul 29, 2016

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