By now you have probably noticed the familiar red kiosks that are in almost 50,000 locations in the U.S. and wondering how much does a Redbox franchise startup cost. DVD kiosk rentals are booming and Redbox is clearly the leader in the industry with over 50% of the physical DVD rental market. There is clearly an opportunity and while many other types of businesses like McDonalds, Subway and many others franchise their business model. The DVD kiosk rental business is simply brilliant because the machine does the work, you have a low-overhead and low-hassle business. A business like this one could even keep their full-time job as the only task that is needed is stocking the machines and check their operation to make sure they are operating correctly, which is pretty simple since it is connected to the internet and the diagnostics are just an app away.
Many people are searching for ways to make extra income on the side and the Redbox model is easy for people to understand as almost everyone I know has used one and they are super simple to use. While Redbox is the most noticeable player in the industry and would be the best choice to franchise from since they are so well known, Redbox does not offer opportunities to franchise, rather they offer landowners of high-traffic locations rental income for these kiosks.
While there is no Redbox franchise startup cost, there are alternatives for people who see an opportunity in their area to get in on the DVD rental bandwagon. The primary competitor to Redbox is DVDNow. The DVDNow franchise startup cost is around $25,000 for the kiosk and starting inventory. More information can be found on their website. If the low overhead and simplicity of a vending business like Redbox is still appealing, but DVD’s may not be the right opportunity due to cost, check out StartupInformant.com as they have lots of advice about starting a vending machine business.
Keep in mind when looking at a DVD kiosk opportunity that you aren’t looking at it like you would a gumball machine. You can’t just fill up the DVD kiosk and expect to make money. Keeping the inventory at the correct levels in imperative. How many of the new releases do you put in the machine? Remember there is a limited amount of space in the machine and if you buy too many DVDs and they don’t rent, you don’t make money. Many of the kiosk opportunity companies make it sound like you will make easy money but there is a lot of planning that is required as 20-30 movies come out every week. The other issue you may find in this business is that you don’t get to talk to your customers to find out what they want to buy. You will be guessing when you start and if rentals are low you will NEVER know the reasons why.
Problems will arise, people will steal movies, discs do get scratched, the software could crash. How are you going to handle these issues? Make sure if you are looking at other opportunities to ask these questions and find out how much of your time you will really be putting in. My guess is that it will be more than you expect. So if you are basing a business or investment decision on the Redbox franchise startup cost, or DVDNow or any other company because Redbox makes billions in revenue consider this. Redbox has a huge head start and is very well known. People trust Redbox. Do they trust these other no-name machines? Also, Redbox has almost 50,000 units so they have huge economies of scale that you don’t have. Before you base your decison on the fact that Redbox does so well is going to be misleading your decision since their results can’t be compared to what you can do.