When multiline dealership Xtreme Machines opened for business in 2005, it had a half-carousel of DVDs on a countertop. That went well, so it ordered another from distributor Impact Video. Then, just this year, the store moved both countertop displays upstairs to its apparel department and obtained two full-size floor carousels for downstairs. "It's a nice display," says Michael Resciniti, general manager. "It's black, so it'll match anything."
Today the Millstone, N.J., retailer has about 250 DVDs in stock and sells, on average, 93 movies per month. It sources all movies and displays from Impact Video. The store buys most discs for $14.97 and retails them for $24.95 (a 40 percent margin), with some titles costing a little more, others a little less. If these variants cancel each other out (mostly, anyway), the monthly sales average indicates yearly sales of about $28,000, or $11,000 in profits. (The 33,000 sq. ft. store does between $5 million and $10 million in sales per year.)
Xtreme Machines stocks a wide selection of DVDs chronicling the extreme adventures of daredevils like Travis Pastrana. But it also has training DVDs on how to ride a streetbike, dirtbike or ATV. Some of the movies aren't even entirely powersports-related. A few, for example, feature monster trucks.
DVD sales at the store have grown, but that's not the main reason for the extra displays. "It's the selection," Resciniti reveals. "You're stocking new stuff along with old stuff." He tells Dealernews: "I think most dealerships sell the DVDs, but I don't think they have a really big selection like us. Most of them probably would have one of the countertop carousels with about 20 movies in stock."
Sounds like your DVD selection? If so, you may want to reconsider.
Owning the Market
Docy Andrews founded a motorsport movie production company in 1994. At the time no distributor for this type of videos existed, so she sold directly to dealers. In 1996, she got out of the production side, formed Impact Video and began distributing for other producers. Roughly speaking, today Impact Video has 450 active titles, works with 175 producers, and supplies 4,000 dealers.
Impact Video is the industry's main source for extreme sport movies. "Although Parts and Tucker may have a title here or there," Andrews says, "it makes it very convenient for the dealers because we're a one-stop shopping source. And we have a really high level of service. We really care about the dealers and try to help them."
Xtreme Machine's Resciniti especially likes Impact Video's return policy. "Our inventory system keeps track of how long stuff has been in stock, and if we do have DVDs that have been here for, say, six months to a year, we'll go and exchange them for fresh DVDs," he says. "Slow movers we'll send back and get something we can retail."
A particular movie, Andrews says, may be popular at one dealership but not at another, so all dealers are offered this exchange policy. But she adds: "We do try to help them with not sending them back because that's not the most cost-effective way to do it for anybody concerned."
She suggests that dealers instead discount old titles or even give them away promotionally to customers purchasing at certain levels. "It's not going to cost dealers much, and customers love it. It really builds a lot of customer loyalty," she claims.
Impact Video requires no minimums on orders, but if dealers order at least 12, they get free freight. If they order 24 or more, they can add a free DVD to the order.
Marketing Movies Well
Impact Video also offers a healthy selection of floor and countertop spinners, shelving, grid displays, DVD flip frames and other merchandising tools. Andrews puts it this way: "Some dealers have more floor space, some have counter space, some don't have any space at all, so they place movies on their slat wall or pegboards. So we try to have a variety of things."
See the full selection of displays at www.impactvideo.com. Retailers that order at certain levels receive discounts. Impact Video also runs specials, such as the one at Dealer Expo where dealers ordering a specified quantity got a free floor display. The company also has offered a starter kit that included a small display.
Perhaps the greatest merchandising tool is the Impact Sampler Reel, a DVD with a collection of almost 30 movie clips. Andrews selects family-friendly scenes and uses a computer to overlay onto every frame of film the movie's title so that customers always know what they're watching. Andrews points out that the clips also help salespeople know what they're selling.
Xtreme Machines uses a DVD projector to show the sampler reel on a large screen in its customer lounge. "Those clips draw customers' attention," Resciniti reports. "They'll see some crazy stunt or jump, and they'll be like, 'What video is that from? I want to get it.'"
Impact Video distributes a sampler reel twice a year: at the Dealer Expo to go with a new catalog, and in September with a second catalog for the holidays.
The clips serve yet another purpose: entertaining customers who are waiting on their bikes in service. "People tend to be more relaxed when they're being entertained," Andrews tells us, "even if they have to wait an extra hour."
She also claims the sampler DVD promotes more than just movies. "It's basically a good kind of infomercial, if you will, for everything in the store," she says, adding that the movie producers allow their subjects to wear and use whatever they like. "Whether it's Fox, or Alpinestars, or even the tires, sprockets or handlebars, all the manufacturers are represented well," she says. "So you've got this cool guy, you've got Ronnie Renner or Ricky Carmichael, on your screen wearing a helmet, and customers are thinking about buying that helmet. They go, 'God, he's wearing it; it must be good.'"
DVDs have always sold well on the Internet, a fact not lost on Andrews. Impact Video sells directly to the public at www.videoxsports.com. "It's a very small portion of my business," Andrews claims. "It's about 3 percent. I basically use the Web site kind of to help my dealers. They go on there and shop all the time."
She adds, "I don't want to be in competition with them."
For active titles, Impact Video's b2c Web site has the same retail prices as those offered by dealers. It does, however, have blowout sales for discontinued movies. Even then, the shipping charge for just one DVD starts at $8.
Online sales may be a small part of her business, but Andrews encourages dealers to sell as many DVDs as they can on their own Web sites. "DVDs are great items to have there because it's one size fits all," she says.
Andrews has put together an Excel spreadsheet that organizes all Impact Video's products by category. Dealers with online stores can access prices, part numbers, titles and descriptions. The Excel file also has hyperlinks to artwork. "Somebody could sit down and easily, in a couple of hours, cut and paste our entire catalog onto their site," she says.
One last thing about promotions — and it's the very thing that first led Dealernews to this story. Eight years ago, Andrews created the Impact Video Xtremey Awards, an annual program to honor the makers of motorsports videos. The awards help customers know which movies are better than others, especially when they're confronted with a large selection of movies with similar-looking box art and similar-sounding titles. Andrews e-mails to the winning movie producers Xtremey artwork that most of them use to create promotional stickers that go on their next production run of DVD sleeves. Andrews claims the program even drives foot traffic to dealers.
Xtreme Machine's Resciniti says his store pays little attention to the awards program, even though it "probably does make a difference."
But a significant number of customers and dealers probably do pay attention. One thing's for sure, the awards presentation itself is a hell of a good time, and it seems to inspire and re-energize this particular sector of the industry. The eighth Xtremey Awards took place in April just a few miles from Dealernews headquarters in Santa Ana, Calif. On hand were legends like Ivan Stewart, Sal Fish, Malcolm Smith and Mike Metzger. Dealers can see the nominees and winners at www.xtremey.net. They'll also see pictures of the pre-party, ceremony (including Docy Andrews singing "Superfreak") and the post-party. (Editorial disclaimer: Dealernews sister properties Dirt Sports Magazine and Off-Road.com Video Channel helped sponsor the ceremony, and we received complimentary passes and helped ourselves to a couple of martinis. Things get a little fuzzy after that.)
Never Gets Old
Unlike most products in dealerships, DVDs have a long shelf life — "as long as the dealers keep putting them on their shelves," Andrews emphasizes. And unlike the big distributors, which promote and offer a DVD title for only a short time, Impact Video often sticks with titles for the long haul. For example, one of the movies picking up an Xtremey this year was Crusty Demons 13, but according to Andrews, the original Crusty Demons still sells.
And let's not forget perhaps the greatest motorsports film of all time.
"I can't believe everybody in the world doesn't already have, six times over, On Any Sunday," Andrews says. "We still sell the heck out of that thing."