On demand media fulfillment
Does anyone have any experience with On-demand media fulfillment services?
I created an account with http://www.dvd-fulfillment.com/default.asp but I haven't finished setting up my first project yet to see how well it will work. It seems like a pretty sweet deal though, if I don't get nailed for hidden fees.
I also looked at http://www.createspace.com but they want 45% of the sale price for items sold on Amazon.com plus their duplication fee.
Any others I should look at? I'm looking for something that is 100% online and does on-demand (found a few places that will do a limited run, warehouse them for a fee then ship them).
That "createspace" system from Amazon is pretty much the norm and actually on the generous side. If you put your product on a store shelf, you'd be lucky to get 40%. This isn't a business where you pay someone 10% commission on sales.
It's a dry heat!
Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .
If it were for a product that was going to be on a regular store shelf, I could somewhat understand. Especially for a low cost video DVD around $20.
Createspace doesn't support data DVDs at this time (which is what the product is) and my price point is around $150, and 45% of that plus fees is ridiculous.
If that is ridiculous and you want to sell it for that kind of money, don't be a cheap-skate -- replicate the discs and sell them on your own site.
It's less than $2,000 for 1,000 discs from Discmakers.com and others.
That's my advice.
Man, cough up ther 40 percent and call it done.
I have sold thousands of DVDs on my own and have not made a dime after labelling and shipping.
No offense Grin, but if you have sold thousands of DVDs and not made any money then I don't think I want your advice.
I am making a very good profit doing the whole operation myself. It's just growing to the point that I either have to stop producing new products to sell the old ones, get some help, or outsource.
I want the flexibility of being able to change the product as necessary which is what I have now.
I thought maybe others would be either already doing the same or looking to do the same. I am guessing from the response so far, I was wrong.
Right now I am doing the replication myself. But it's starting to grow to the point where I need to outsource it. I had thought about just buying a minimum run of discs for $1000, but it doesn't give me the flexibility of making changes without tossing the old ones in the trash.
I had hoped that there was an existing business that saw an opportunity to provide this type of service. A company that can do on-demand replication and shipping that was totally automated (I could simply upload an ISO plus artwork and change it as needed). dvd-fulfillment.com comes close, but they aren't completely automated at this time (any images over a gig you have to mail to them).
I don't mind paying $10 a disc for on-demand service as long as it meets my needs (I don't think that's being a cheap-skate). I just think paying Amazon 45% plus fees was a bit excessive.
I had thought maybe someone else would be doing it already (or something similar) and came here for advice. I didn't realize that asking what others would be doing would create such hostility. My apologies. Creative Cow bills itself as some place where people can come for getting help. From your responses, I guess that reputation is undeserved.
Don't be so quick to diss, Dave; the COW is among the most well-groomed and hospitible sites anywhere. Not to mention having a lot of real expertise to share.
These guys were not busting your chops, they are just being frank and direct in their language and professional opinions. If you look up their credentials, you'd probably be glad to give them another chance at helping.
But not everybody on the COW has seen and done everything there is to do and know. Usually they bat a thousand, sometimes all we can do with a question is bunt. Your situation is right on that inflection point where the next jump in scale brings disproportionate cost increases. Grinner's perspective is that DIY fulfillment for him had a lot of extra hidden costs and was not the best use of his productive time, so he thinks the usurious rates Amazon charges are the cost of doing business. Lyn has been his own business since I was a zygote, so if he says something is or isn't a good business idea, I listen to that opinion.
If you're asking for a sounding board, I would say you suggested your own best option within your own post. Take on an assistant, even just part-time, to handle the fulfillment while you concentrate on new production. That is, if you have enough equipment to do both at once. Bring them on as an independent contractor, some kid fresh out of school looking over Craig's for crumbs might jump at the chance.
I noticed the guys at Digital Juice have hit a similar wall: they have gone all summer without producing or releasing any new online videos and had to scale back other production not directly related to filling paying orders. Part of that is the cr@ppy economy right now. Part is a choice to take a hit on secondary functions while developing new product line on limited resources.
Personally, I think they have lost a lot of their sales audience by not keeping up the online tutorial videos. They are pefect marketing tools for what Juice sells. And when time are tough, the smart manager knows that is the time to INCREASE your marketing and release more such promotional product, not less.
I would ask you to answer the following questions:
1. How are you marketing your videos? Your own website?
2. About how many of each product do you sell in an average month and how many products total. Or just answer, how many discs total do you expect to sell in a month?
3. How often are titles updated?
4. How much stock do you keep on your shelves to keep up with demand?
5. Given the costs of a self-duplicated DVD including label and packaging, and your own time spent building your inventory (this is a cost also) at what point are you losing money by doing this all yourself?
In other words, how does your time and materials spent relate to your profit/earnings?
Outside services have their drawbacks if low quantity and high profits are limiting factors.
We sell books that we publish ourselves. Some we sell through our own website and mail order catalogs.
Others we sell through book distributors, who have inroads with a specific audience (medical bookstores) and through Amazon and other generic book selling websites that have access to any book with an ISBN. Those methods buy the book from us at a discounted rate and mark it up to their customers, which is how nearly all retail works. Sure we make less per unit sold, but our discounted price still gives us some profit over our cost of goods.
Look at the big picture. I'm a fan of Excel - make a spreadsheet of your inputs and outputs and see how much you can stand to give up for the benefit of offloading some of your work and fulfillment. It may even out for you if you look at the overall net numbers.
Basically it's a web application for a specific industry. Occasionally I get sales to consulting companies and such outside the industry, but the appeal is mostly limited to (I'd estimate) about 200,000 companies worldwide. At least a third of which are existing customers.
I built my own DVDR duplication machine with an old computer loaded with Linux and 5 DVD burners. A set of 5 discs takes me about 10 minutes to burn and I am currently burning 200 discs a week (the product fits on a single disc). I buy printable media and I have two printers for labeling. The whole process takes me about 5 hours a week. Granted, occasionally I can skip a week when sales are slow.
About 70% of shipped products are upgrade discs purchased by existing customers who prefer a new disc instead of just downloading updates.
I change the image at least once a month with new features or bug fixes and new media that we create. Occasionally I'll do 2 or more changes in a month when warranted.
The amount of time it takes to deal with all of it is seriously eating into my schedule. I can either hire a part time person to do it for me, or, preferably I can use a service to handle it for me.
I have two contractors that work for me to help me work on the application and create new media content. I don't want to have to "hire" anyone, even part-time. The additional costs for insurance and accounting outweigh the benefit for me at the moment. The contractors work from home (not even in the my state, actually) so at the moment I don't have to deal with employment insurance and tax issues.
As I mentioned previously, I signed up with dvd-fulfillment.com and things seem to be progressing well. I'll know soon if they'll be able to handle updates/changes quickly for me. If it doesn't work out, then I will probably have to bite the bullet and hire someone.
Unfortunately, most of the companies I have contacted all want to create 500 to 1000 products and then warehouse them for me. Shipping from that stock. My main problem with that is the loss of flexibility in changing the image. After that, the cost for the warehousing solution is about 15% higher than if I hire someone to come in and do it once a week on my existing equipment.
It might also be time to seriously consider upgrading my process to a Rimage duplicator for $5,000. But that's a huge investment for me at the moment.
As a Rimage employee my post is obviously going to be biased, but since you mention that you've considered buying a Rimage system I'm going to present the case for having your business in-house, since that's essentially what our products enable current outsourcers to do. I'll try to keep this as unsalesy as possible.
The benefits are:
1. Complete process control - order timing, production quantities etc
2. Inventory management - no wastage through overruns, change control (both content and labeling), 1 - 100's produced as required, all unique if necessary.
3. Product quality control - media and print: with ousourcing, the results could be A,B or C quality. Insourced, you choose both.
4. Workflow management - current disc publishers can be complete network appliances which operate like network printers, receiving and queueing jobs from multiple content creation sources. These jobs can be either fully authored images or data files with the labels tied in through XML.
Hope this helps.
Hey there[Dave Navarro] "I didn't realize that asking what others would be doing would create such hostility."
There are quite a few people here who have product for sale. Go up top and look under library.
But, If you think this is hostile, let's get Bob Zelin in here to take over.
Seriously, there is no hostility, just a bunch of people talking to you like you're one of the guys. If you're looking for a bunch of syrupy, nicer than nice phonies, than you might be in the wrong place but this is reality.
Maybe you should start your post with "My feelings are easily hurt, but...". A lot of people do that and we treat them accordingly. Just let us know.
It's too bad that all of the product suppliers in the world don't do as you do and keep the cost of goods sold at less than 10%. In the grocery business, they have a profit margin of about 3%. Using your method, a frozen pizza should cost around $45. I better stock up before they discover what the price should be.
Now I know why gas costs what gas costs.
It's a dry heat!
Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .
I'm late to this thread, but I have to agree with Dave in that some of you were being a little harsh with your advice. He's not selling a retail DVD. According to one of his posts, he said:
it's a web application for a specific industry....I get sales to consulting companies... but the appeal is mostly limited to about 200,000 companies worldwide. At least a third of which are existing customers.
So his "margin" can't be calculated simply by deducting the cost of replication/duplication, printing, packaging etc.
This isn't a frozen pizza and the grocery store reference someone made was totally ridiculous. This is a software application that no doubt he's spent considerable time developing. Just about everyone on this list is willing to pay $600 for Photoshop, $1000 for Final Cut, and $1500 and up for After Effects, Digital Fusion, 3DS Max, Lightwave etc.
Like those apps, his application is probably specialized. Plus, he noted that he updates it sometimes twice a month, which makes it unique to the other software listed. No doubt that's why the companies that buy his application continue to do so.
Magnetic Image, Inc.
Molding Box is a professional printing and fulfillment house that also specializes in short run media duplication and replication. You can store your disks in their warehouse, and they will ship them for you on demand. They also have an advanced inventory software and an API integration for your shopping cart so you'll always know how much of your inventory you have, and your customers' info can be transferred to your CRM so you can still market to them down the road.
Shipping made sexy.