Disc Duplication – Retail

20 07 2007

The Disc Duplication business has now entered the third phase of its sector – Retail.

This concept first surfaced in Texas, which basically
attempted to mirror the success local “print shops”
were having extending their offerings too disc.
We have also witnessed the changing of guard
in on-line disc offerings, the players have taken
new positions.

Compuexpert – once claimed to be the largest distributor
of media. Successful online site w/shopping cart. Went
through separating larger buyers an gave them direct
contact an first dibs on inventory. Established an affiliate
program to grow the small market interest an create
brand awareness.

Everything was riding high until that one fine day
when disc manufactures decided it was time too
push “inventory levels” – minimum buy orders.
Which was fine for the manufacture, until they
went looking for a wholesale distributor. Since
most of the players like ourselves came from
computer component distribution – stocking
high levels of inventory an slowing turn times
is not a scenario that needs repeating.

Enter Retail – consignment of large inventory.
Retail chains were waiting they had the experience.
Next thing you knew there was not one place
you could go an NOT buy blank media. Great
for consumer, especially when the price war started.
Consignment is the key for Retail, you don’t pay
your vendor on what the product showed up at,
you pay 90 days out on what was sold.
Exp: starts a 0.85, 2 months later price adjustment,
now 0.55, Retailer puts pressure on vendor because
inventory is taking up “valuable” space, rebate
pricing starts, finally product moves at 0.25.
Guess who ate the 0.60 it sure enough was
not the manufacture…….

Retail again has become the battle ground for discs.
This time on the duplication service side. Try as
you may, from sticking labels on disc’s, to buying
additional unforeseen ribbons and ink cells, to
the time wasted. There will be a magic number
that wakes people up to “why am I doing this?”
generally its 250pcs, then you look for someone
else to do this.

Retail has the one element consumers love, they will
soon enough based their ideas on PRICE period.
Don’t get me wrong, this is good for clients however
it also has the concept why should anyone spend
for better looking product.

At this point the graphic artists making a living
designing labels and inserts begins too loose his
mind, they do care about how the color green looks.
Especially when it involves a branding process or
corporate logo, purchasing they only focus on
cost vs budget constraints.

Hopefully this segmentation of the market can only
development this channel. Each level has it’s
respected customer, an consolidation begins. The
small shops that once had a niche idea now has
competition, in fact LOCAL. What this brings
forth is a basic business rule, to survive you must
be moving forward with growth. Chicagoland
alone has seen a tremendous growth is these
shops, maybe to much.

In our view, its a good thing. Awareness is key.
Those of us in the business look to the many large
organizations that got caught up in bringing this
production process in house, “We can do it ourselves..”
you just created a cost bleeder. Some just have
to go through it, saying they were wrong is just not
in the cards, now they have some simple approach
to resolving it. If not down the street, your office
supply outlet or even your copy center (Kinkos) can help.
Who we have not heard from is the one chain that
started this AlphaGraphics, they have an entire division
devoted to this.

By the way – Compuexpert – distributor of video games

To show my cynical side, we co-edit another blog:
bankruptcy blog. some of these people are headed

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One response

27 07 2007
adam

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