Confessions of an FBA seller who bought a DVD rental store: driving cross-country for 3,000 DVDs to sell on Amazon
How did I come to buy a closed video rental store?
The time: Almost two years ago.
A friend tipped me off to two friends of his whose video store had just closed in Des Moines, Iowa. And they were actively liquidating their inventory. In fact, they had debts to pay and were getting desperate. And it was thousands of DVDs
That was everything I needed to hear. I immediately drove to Iowa.
And I made the drive, despite these facts:
- There was no offer for the DVDs on the table.
- I had no specifics on how many DVDs were for sale.
- I had no direct contact with the sellers.
I just knew a video store had closed, and I was determined to own everything that was inside.
Here’s why I was determined to buy these DVDs
- The video store was across the street from Drake University. Their DVD collection appealed to a hipper, younger audience. As someone selling these DVDs FBA, that meant money.
- The owners had gotten out of the video rental business and just wanted to liquidate DVDs. To me, this meant making a lowball offer they just might take.
- The volume of DVDs. I’d been told by my friend who knew the owners, was estimated to be “around” 2,200 DVDs. They also admitted they were just eyeballing it, and the number of DVDs could be much lower or much higher.
Knowing only these details, I drove to Iowa. I drank a lot of coffee, ate hash browns at a few trucks stops, and after many hours, arrived in Des Moines.
My first glimpse of the collection
My friend arranged a meeting with the video store owners at the house where the DVDs were stored. They greeted me at the door and said “follow us.”
They took me into the basement, and there they were: box after box of DVDs. The number was definitely in the thousands. This was big. While my pulse quickened, I maintained my poker face and started the pre-deal banter.
I first asked them if this was the store’s entire inventory of DVDs, or if it had been picked over by other resellers.
They explained they had been trying to sell the collection on Craigslist since the store closed two months before, but had gotten few inquiries and no buyers.
I’m going to return to the massive lesson we can draw from this in a future article, but until then let me just yell at Amazon sellers in the corn belt for a second:
Hey Iowa – are you all asleep out there? This DVD collection was on Craiglist for two months!
A mini DVD reselling bombshell
“The only interest we had on Craigslist was from people who just wanted those,” one of the owners said, pointing to a giant box in the corner.
“What are those?” I asked.
“The Criterion Collection DVDs.”
Oh. My. God. In my head, I raised the amount I was willing to pay by at least $1,000.
If you know a little about film, you probably know about the Criterion Collection. They have an expertly-curated catalog of DVDs packaged and marketed to film aficionados. They are known for their highbrow film selections (including a lot of foreign films and cult classics), their extensive and high-quality extras, and elaborate packaging (some of their DVDs even come packaged with books). If you are extremely passionate about film, and you have money, you probably own at least a few Criterion Collection DVDs.
These DVDs were also a goldmine to resell FBA.
I was laying eyes on the largest lot of Criterion Collection DVDs most people would ever see. There were at least 100. And it’s the rare Criterion Collection DVD that sells for under $15 on Amazon. Do the math.
Off to a good start.
The art of the deal
Aka “testing my ad-lib, totally made-up, amateur negotiation moves”
The DVD collection was very impressive. It was also a massive gamble.
Even attempting to estimate my potential profit would be complete recklessness. I was looking at over 2,000 DVDs, only 5% of which I could actually see and scan. The rest were buried inside the many boxes that surrounded us.
Here’s what I could see: A lot of music-related DVDs. Cult classics. Anime. And so on. All of this was encouraging.
This was, after all, a store across the street from a major university, and the collection reflected the hip and “edgy” tastes of its one-time clientele. There were all good resell these DVDs FBA for a huge profit.
Have you heard of “price anchoring”? It’s this negotiating tactic used by salespeople where you get the customer to say aloud how much money your product will save them. Well I was pioneering the “reverse price anchor,” where I tell them all the ways buying this DVD collection was going to cost me money, and all the ways it would potentially lose me money on Amazon, before getting them to throw me out a price.
Truth is this is probably the oldest negotiation technique in the book, but it felt new to me.
“Right off the top,” I said, “85% of these won’t make me more than 40 cents.”
This was a fair estimate. There’s a glut of the majority of films on Amazon, and most are penny-DVDs.
“And these are ex-rentals, so I’ll probably have to buy a high-end DVD cleaning machine to refurbish them.”
Also true.
“So…. What were you thinking?” I said.
They looked at each other. Clearly they hadn’t talked this through beforehand.
How I calculated the value of the DVD collection
Here’s what was going on inside my scheming head: I had already appraised this as a very high-value collection. I estimated the Criterion Collection box alone would bring in at least $1,000. And there were over 2,000 more DVDs on top of that. Maybe 3,000+.
Based on this, I was willing to pay $2,500 for the DVDs on the high end. I had $2,000 in my pocket. But I didn’t tell them any of this.
If it came to me actually offering $2,500, and they still said no, I had a Plan B. I would ask if I could be alone with the DVDs for a couple hours, scan a thousand or so, and adjust my estimate based on what I learned.
They didn’t seem prepared to be pressed for a specific price. They went in circles for a couple minutes without giving me a number, so I changed my approach.
“You mentioned you had some store-related debt to pay off,” I said. “How much is that debt?”
They didn’t even pause.
“$1,790.” One of them said.
I took out my cash-roll, peeled off two $100 bills, and extended my hand with the rest.
“Does $1,800 work?”
We had a deal.
The logistical nightmare of owning thousands of DVDs
I’d brought a truck, but there was no way it was carrying this many DVDs. I needed to get the collection down by 40%, at least.
The DVD sellers were cool, and we worked out a deal where I would stay in town for a couple days, scanning & listing DVDs in the basement until I could fit what was left in my truck.
This was the scene:
Problem was, these DVDs were ex-rentals, so there was an extra step: Cleaning. Nearly every DVD was visibly scuffed, and selling a DVD that skipped was the fastest way I knew of to receive negative feedback on Amazon.
I had heard people chatting on an Amazon FBA forum about the JFJ Easy Pro Universal CD/DVD Repair Machine. So I went on Amazon and had one overnighted to the house (thank God for Amazon Prime).
The next day it arrived and I got to work. Or I tried to. But there was one massive problem: The JFJ Pro was painfully, brutally slow. Between adding the cleaning liquid, cleaning off the DVDs, and all the back and forth, it was over a minute per DVD, at the quickest possible pace. I did the math and realized this just wasn’t going to work.
I also did the math on shipping the DVDs to myself via Media Mail. That wasn’t appetizing either.
The art of creative DVD transport
So I went to the hardware store and dropped over $100 on the two things that will get you out of most problems in life: Tape & bungee cords. Lots and lots of bungee cords.
I was going to solve the lack of truck space by taking a page from the Beverly Hillbillies playbook. I was stacking upwards.
I’ll skip my woeful tale of getting the DVDS into my truck, by myself, with the muscles of that guy from the comic book ads that got sand kicked in his face. But this was the scene when I was finally finished:
3,000 DVDs, on the road
If that image above looks perilously unstable, you’re right. Somewhere outside of St Louis, I lost an entire box of DVDs on the interstate. And the box held hundreds of DVDs. Picture it: Me darting in and out of traffic, grabbing armfulls of DVDs and retreating to the shoulder, watching 18-wheelers turn copies of Kentucky Fried Movie to dust while I waited for the next break in traffic. I got most of them, but this folly cost me hundreds.
It was a long trip.
Getting home and sorting the DVDs
Once home, I brought the entire DVD collection into my office and started assessing my potential Amazon profits.
Right away, things were looking very, very good. I never had any doubt I would make money, but I didn’t know if it was $3,000 or $30,000. My early estimates were that this was somewhere in the middle.
Then the real labor began
The real work came over the weeks that followed. And yes, it literally took me weeks.
Scanning everything. Determining what went in the “sell on Amazon” pile and what went in the “sell somewhere else” pile. Inspecting each DVD for scuffs. Setting aside the DVDs that needed cleaning.
The hardest part of buying 3,000 DVDs to resell
The biggest challenge of all of this was something I never expected. It was the DVD cleaning. The cleaning terrified me.
This one issue threatened to eat up a huge portion of my Amazon FBA profits. Every inquiry I made into companies that cleaned DVDs in bulk returned quotes that averaged about $1 per DVD. This was a massive blow to my profit margins. I was desperate for a solution.
About 1,000 of the DVDs definitely needed cleaning. The rest I could take my chances with on Amazon. I went onto an Amazon FBA forum and put out a cry for help.
Enter this story’s hero. Brian Freifelder of Philadelphia Media Exchange, owner of an industrial-sized DVD-cleaning machines. He contacted me privately, with an offer: He would clean DVDs in bulk for $1 each, However, he would also give $1 credit towards this for any DVD I gave him ranked better than 100,000.
The clouds parted and angels started singing from the heavens. I had hundreds of DVDs with a Sales Rank of better than 100,000, that would also bring little-to-no profit on Amazon. This could solve my biggest problem totally for free.
I spent days and days putting hundreds of scuffed DVDs into spindles (to save on shipping), and scanning everything to separate the DVDs I couldn’t sell on Amazon. The numbers are a little fuzzy, but I think I sent Brian roughly 1000 DVDs to clean, and 700 DVDs for the $1 credit. Meaning I had this massive DVD-refurbishing job done for $300.
Major bullet dodged.
The comedy of errors continues
Buried at the bottom of one of the boxes was a smaller box, and in it were 200 DVDs without cases. I hadn’t noticed it until I got home. For a moment I considered this a nice bonus, something I could bundle and sell on eBay.
But this fanciful notion didn’t last. In a moment it hit me: My last move before leaving Iowa was throwing away a another box of DVD cases. Empty cases. 200 of them.
Do you see where this is going?
Back in Iowa, I’d noticed the empty cases and asked the guys I bought them from what the story was. They told me they weren’t sure, but that they’d lost the DVDs that were inside and weren’t charging me for those. I only took the box out of the basement as a gesture of politeness, and promptly threw the box in a dumpster behind the Hy-Vee grocery store.
This was easily a $1,000 folly.
I’ll go ahead and wait for you to stop laughing at me…
My DVD pricing and listing formula
Here’s what I do when I know I’m at least tripling my money on a haul no matter what: I price high. Really high. I get really, arrogantly bold with my Amazon pricing.
Now I always price high with my Amazon FBA offers, but I priced outside even my comfort zone with these DVDS. If an item had a good Amazon sales rank (better than 100,000), I didn’t even care if I was the lowest FBA offer. I’d go for second or third-highest, knowing it didn’t matter if it paid off or not. I would probably make my money back on this whole DVD collection in two weeks, making the rest gravy, so I could afford to be bold. And if certain DVDs weren’t selling, I could always lower the price later.
With DVDs ranked worse than 100,000 on Amazon, I aimed to always match the lowest Amazon FBA price. Unless it was stupidly low (like matching the lowest merchant fulfilled price), in which case I’d match the next FBA price, or go $7 to $9 above.
Worse than 200,000, I aimed to match the lowest merchant fulfilled offer.
And if a DVD would bring me less than a $2 Amazon payout, it went in the eBay lot pile. Messing with $1 DVDs would take over my life if I let it. So I deemed them trash and moved on.
That was my DVD pricing formula.
And now, the profits
There’s no reason to dance around this issue… The DVD collection was a goldmine.
First, I’d been told it was “around” 2,200 DVDs. When I actually counted, it was a hair over 2,900. That’s 30% more DVDs than I thought I was buying.
The quality was insanely high. 75% of the DVDs giving me a net profit of more than $2 on Amazon. Go to a thrift store and tell me if 75% of the DVDs there will bring more than $2. No way.
I didn’t even talk about the DVD box sets
There were two massive boxes that contained nothing but DVD box sets. Hundreds of them. You wouldn’t even believe it. TV shows, movie collections, Simpsons box sets shaped like Homer’s head… It was just about everything you can think of. Major, major money.
In a cruel irony, I owned more DVDs than almost anyone on earth, and I didn’t even watch movies. Seriously. I’ve probably seen less than 50 movies in the last 10 years.
Of the nearly 3,000 DVDs in my possession, in the end I kept six of them. Six.
(And now, two years later, I’ve watched exactly two of the six. Cannonball Run and the documentary about the metal band Anvil, if you’re wondering.)
It would be irresponsible to claim a realistic profit estimate, but…
I’ve brought in $15,000 on Amazon from this collection as of the time I’m writing this. And they’re still selling.
And that concludes the weird story of the time I bought a closed DVD rental store.
-Peter Valley
Your post had the storytelling power of Mark Twain yet the emboldened thoughtful strategy of General George S. Patton. Bravo. What have you done with the Amazon selling restrictions for DVDs with MSRP of under $25 (I take it you’re ungated for that?)
That’s a compliment and a half. The gated DVD restrictions was a subject I didn’t even want to touch in the article, but yes I managed to get approved and dodge that bullet. Great post on this subject, btw (http://jordanmalik.com/blog/amazon-restricted-categories/?hvid=4beHA).
Great story. Thank you for sharing.
One question though, why didn’t you rent a trailer?
That was something I looked into, definitely. Managed to make it work without it, by a miracle.
A belated thank you! Back in April you wrote an article about buying books on Craigslist to sell on FBA. I immediately went to my local cragslist and there was a listing that stood out titled Books Books Books. I called the number and the man told me his father passed away he had about 30 boxes of books to sell. I met him that day at aware house and realized he had under estimated the number of boxes he had to sell and with some haggling purchased the books for $450.00 including the Uhaul rental truck I needed to get the 110 boxes, of 2800 books home. After sorting them out, 1040 of the books I sent in to Amazon for a profit so far of over $5200.00 and there are still many more books left. Thank you so much for your wonderful advice!!! Michael
That’s awesome! Love hearing those stories.
Cool story.
Just got into books and some music cd’s myself, worried about the cd’s as one amazon seller I looked at awhile ago seemed to only get neg’s from fba late ships or DVD’s or CD’s. Rarely any neg’s from books.
What is your experience for DVD’s or music CD’s and neg’s compared to books (and yes I have read your journey out of 95%ville….)
For whatever reason, CDs attract many more negative feedbacks than DVDs. I got killed by bad feedback the last time I sent in a large shipment of CDs. (most of it unwarranted, largely from cracked cases incurred during shipping). I was able to get nearly all of it cleaned up, but it was tense. I’ve had a very different experience with DVDs and books. Different class of customer perhaps? That’s my theory.
Fantastic, detailed account of your journey! Kudos to you for spotting the opportunity and taking action.
You continue to inspire me with your content and stories. My printed copies of your products are dog-eared and highlighted to the max!
Thank you for being such a generous and skilled FBAer,
Martha
Martha
Printing my books AND reading them dog-eared is the highest of compliments!
(I am not affiliated with these people in any way, just giving my opinion). I highly recommend the RTI Eco Pro for disc repairs. The manufacturer has a sale going for $1000 right now (about 50% off). It’s worlds better than the JFJ Easy Pro. It works like a toaster. You stick the disc in and and set a repair time and the disc comes out clean with no hand finishing (you might have to knock a little flakey dust off). It doesn’t work great for really deep scratches, those in particular can take a really long time to repair, but the eas of use and quality of repair are definitely in a different league for this price point. It’s quiet enough that I can leave it in the living room while I watch TV and can repair discs as I feel like it.
I’ve had a JFJ Easy Pro and Disc-Go-Devil (which is about a $1400 machine) so I’ve had some experience with some of the alternatives.
A while ago I found a guy on eBay with some of the really expensive RTI machines that would do bulk repairs for $.55 each but you had to be sending him over 500. He did a great job and turned 700+ discs around in about a week.
Great tip about the trade for credit with Brian F. I’ve got a pile of DVD’s I was going to take to the Pawn shop and trade for $.50 each, but I may save them and try to trade for repair credit on discs that have really deep scratches.
Nathan
Awesome! Thanks for sharing this.
Using the info above, I found a deal where they are closing a video store with a large amount of inventory. Much more than I have room or capital for. They are totally wanting to liquidate in bulk.
I would like help and possibly a partner to work with through this deal. Please contact me ASAP if interested.
I read every word on this with rapt attention. While I have not ever bought a collection this large, I have come across several opportunities to add to my stock in a big way – and I know they are out there. Twice in the last year I have been at the end of estate sales when they started giving things away: one time every book and tape in a very large library, another gave away everything there. I have also experienced this at the end of church and school sales. I have seen offers like this in craigslist as well. There are offers like this on eBay as well. No time for scanning, you just have to just your best judgment and take advantage of the situation. Getting the stuff moving has been very important, as it was with you. I really appreciated the heads up on cleaning – the device you recommended is on my wish list. I loved how you arranged to get them cleaned by including a trade. Win-win. 🙂 I am not approved to sell DVD’s on Amazon but they sell well on eBay. Anyway, I loved this post. It reminded me of one of my favorite inspirational phrases “money loves speed.” And I will have the image of you risking life and limb to collect your Kentucky Fried Movie DVD’s from the highway as a funny reminder of what we will do for our businesses. (Glad you made it by the way!)
Enjoyed the article, thank you. I could really relate having just bought a pallet of 4400 new DVDs, my living room resembles a warehouse right now.
I have a question, here in the UK most rental DVDs have “Rental Copy Only” in a band across the front of the cover and “Rental copy only, not for resale” somewhere on the back cover. Some even have an “R” in a green circle down the spine as well. I’ve spoken to AZ seller support about these and they do not allow rental copies to be sold unless you “submit written permission from the distributors”. Is this different in the US or were you just lucky that this DVD rental shop was renting out resale copies rather than rental copies?
Cheers, Mike….
Wow, awesome score!
I bought these just before Amazon cracked down on DVD sales, so this didn’t affect me.
Ah, I see. That would explain it. I hadn’t realised the date of the article and with AZ changing their rules like the direction of the wind it’s hard to keep track sometimes!
On the plus side, it keeps some of the competition away. For example, my DVD supplier (looking for a new one now as they messed me about something chronic this time) sells on ebay but not Amazon. They looked at Amazon but couldn’t understand it and thought they had too many rules. Great news for me as I’m not competing with them since they could always undercut me if they wanted to. They might get £2 for a particular title on ebay where I’m getting £12.99 for the same title on Amazon.
Gotta love those Prime subscribers!
If you can sell them, DVDs are a gold mine right now.
Totally exciting story, loved hearing about your haul! How many hours would you say you spent on this project, between the driving both ways, sorting, cleaning, listing, etc.?
Many, many days. Probably two weeks total dedicated to this.
I loved this story, it was very similar to mine.
In my case I packed up and drove overnight (about 8 hours) to an auction in Connecticut where roughly 3,000-4,000 DVD’s were being auctioned off from the estate of a private collector. I had no guarantee that I would come away with anything since it was an auction. They were being sold in 6 lots from about 300-800 per lot.
I have a Jeep Wrangler so I did the math and estimated that I could get 1,200 DVD’s into the back of my truck. That meant trying to buy two of the six lots. In the end I bought lots 3 & 4 roughly 1,100 DVD’s and they fit nicely into the back of the truck. I probably got them at around 20 cents a DVD and we are talking Criterion Collection, classic movies, foreign films….not one piece of junk in the bunch.
It’s been roughly 2 year not and I’ve sold just over half of them on Amazon.ca (yes, I said ‘.ca’ not ‘.com’) I travelled from just outside Toronto, Ontario Canada to buy the DVD’s (crossing at the boarded is its own story, apparently buying DVD’s at an auction 8 hours away is not a story a border guard here’s very often!!). I would say the net profit on this one purchase is well over $6,000 to date. And in my case they were from a private collection so I didn’t have to worry about cleaning.
The only thing I would do different is I would have spent the money to buy them all and I would have had them shipped back. (I have a shipping address in Buffalo that makes this cheaper.) I had no way of knowing at the time how much this one overnight trip could make me, and I probably bought 1/3 of the DVD’s available. No point in say ‘if only’, but if only I had bought all of them!!!!
As a footnote, I love going through the DVD’s and logging them onto my Amazon.ca page. It’s like every new DVD is a Christmas gift and now we get to find out what this one is worth.
I’ve had a couple other similar stories, but nothing as big as that one. I’m looking forward to that next big score!!
Slightly related, but how do you approach a store that’s going out out of business, about buying their remaining inventory?
I have a huge collection of DVDs and VHS that I would like to sell. If you would like an inventory list,you can email me at [email protected]. I live in Houston, TX so it would be a great if you could pick them up. Mailing might be cost prohibitive.
Many are unopened.
When Amazon asks for supplier information / wholesale information about where you get your DVD/ CD inventory from –how do you handle that? I sent Amazon receipts from auctions & esate sales where I had purchased Dvd’s and CD’s. I am still extremely limited on what I can list.