CDs & DVDs
Self Distribution: Follow Up & Fulfillment
Final Part in Three-Part Series - by Mark Bosko
Once the excitement of actually selling your film dissipates, reality starts to set in. The main point of distribution – in addition to finding an audience for your movie – is to make money. And to do that, you’re going to have to run a business.
Filling orders – Filling orders is obviously not an issue when selling your project to broadcast/cable entities, institutions or other, “one-copy” outlets. Barring specific technical and delivery details, it’s a one-shot type of thing. However, when dealing with video rental shops and retailer stores, things can get sticky. The questions of “What is the lag time between receiving an order and filling one?” and, “How will you know how many DVDs to have on hand to minimize this delay?” Order fulfillment can become a vexing problem for the DIY-distributor. The key is to balance inventory (or projected orders) with actual orders, resulting in the least amount of out-of-pocket expense while at the same time limiting payables. Self-distributors are often “one-man bands,” and anything you can do to increase or maintain a steady cash flow will contribute to the longevity and success of your efforts. How do you do this?
Well, the studios, large independents, wholesalers and even many of the small independent distributors use a system of “pre-order dates” and “street dates” to assist in their projection of sales. An ad is circulated to all potential buyers offering the new DVD. On the ad will be an order cut-off date and a corresponding street date. All orders must be placed by the advertised date to guarantee delivery by the advertised street date (which is usually 3-4 weeks later).
Self-distributors should adapt this technique in their promotions. Use basic sell sheets with a sticker alerting order and street dates. That way, the dates can remain fluid, since you won’t be soliciting the entire U.S. video store market at once, but instead, will be selling in a territory-by-territory basis, say all video rental stores within a 25-mile radius of your locale. This will allow you to closely gauge orders, limit the order fulfillment period as well as the amount of money spent on the front-end of the process. Another reason to use this system on a territory-by-territory basis is that as a self-distributor, you will always be selling DVDs, so you really don’t ever want to close the ordering period on a large scale. Even if you already solicited an area, a new buyer might pop up and you can return to that territory with new dates. The technique also avoids placing inefficient, low-quantity duplication orders. If you sell store-to-store, with no implied order cut-off dates, how do you know when to start burning more DVDs, and what time frame do you give the buyer for delivery? Chances are good you don’t have the funds (nor do you want to spend available money purely on speculation) to create 200 copies before you start the sales process. It certainly is customer friendly to stock this kind of inventory and offer immediate fulfillment. But nobody expects this kind of service and it’s really not worth the investment at this stage.
Duplication/Replication – Making copies of your DVD is again mostly a concern for sales to the retail and rentail markets. Depending on the project, and the number of expected or realized sales, replication of DVD copies can be performed in a variety of ways. Very targeted, niche programming may experience limited, almost “trickle” sales.
Whatever the approach, you’ll want to talk with a sales rep to get price sheets, turnaround times, and the availability of ancillary services such as packaging, labeling and shrink wrap.
DVD replication is not always available on a local basis, so check the Internet for providers willing to work with small quantity jobs. If you find, after initial solicitations, that you’ll be moving large quantities of discs, investigate nationally-based companies. These outfits have the ability to fill big orders quickly, insert the disc into a package, shrink wrap it and even drop ship to a buyers’ location.
When talking to duplicators and replicators, never accept their initial quote for business. They will always lower the price (unless your orders are a very insignificant number). Ask about other titles they’ve duplicated, and if possible, rent these from a local store. Look for clarity, quality and good sound. Ask for references, specifically independent film and video producers. Call these folks and ask about billing, timely delivery, customer service, quality of product and price competitiveness. Don’t slack on this step and figure a DVD is a DVD. Your product is your business. Send out a bad DVD that’s incompatible on 50 percent of the players in the market and you’ll never do business with the buyer again.
On-demand DVD publishing entities have recently changed the world of self-distribution in a very positive manner. CreateSpace (a division of Amazon.com) offers a "just in time" service which produces units as customers place orders, so there is no inventory needed. This means you can get started for a fraction of the traditional cost. And you can seemlessly switch to higher volume traditional replication and fulfillment as your sales grow.
Packaging/Labeling/Shrink wrap – Basically, the same concerns apply with these services as do with duplicators and replicators. The self-distributor will want to balance quality, price and timeliness of delivery. Self-distributors soliciting the DVD market, unlike the nearly-gone VHS channel, have the advantage of working with numerous local and national printing companies. Unlike the specialty die-cut printing required for a video sleeve, a DVD package consists of a case with a small printed card insert, allowing production virtually anywhere (even on a high-quality desktop printer). The DVD jewel cases are very cheap – less than 25 cents a piece – and can be ordered in a variety of colors and in small-to-large quantities from hundreds of suppliers nationwide.
Again, CreateSpace’s just-in-time system is geared for this part of the fulfillment process, creating DVD packaging, disc face screen printing and shrink-wrapping, on-demand, as orders arrive.
Replacements and returns – Policy issues are a big part of doing business, and two items that buyers will always inquire about are replacements and returns. What they want to know is how do you, as a self-distributor, handle defective or unwanted and unsold merchandise. To be honest, I wasn’t truly aware of the impact of these decisions until well into the sales process of Killer Nerd. We had shipped 200 copies of the film to a national music and video retail chain. Since I really wanted to land the account, I sold the copies at a very low wholesale price, meaning our profit margin on the order was pretty slim. In other words, at that point I was more interested in getting the film in stores and in front of customers than I was in making a buck. Because of the MTV connection, the flick sold fairly well. What I didn’t realize, however, was that regardless of the popularity of a product, there are always returns. OK – so maybe Spiderman 2 sells out, but on an independent level, this is not the case. Well, the retailer isn’t going to take the hit on that leftover merchandise, so they want to return it for credit. When I got a batch of Killer Nerd copies back in the mail along with a return document, my first reaction was to send them right back again and say, “you bought them, they’re yours.” Obviously I didn’t, and realized I’d have to suffer the loss of money it cost to produce and ship that product. Even worse, the next order sent was almost at no charge because of the credit owed the company.
Long story short – count on a percentage of your sales to come back in the form of returns and factor this information into any pricing decisions. Also, clearly state your return policy in any sales materials.
Handling replacements is a no-brainer. You must replace, free-of-charge, any defective DVD sold. Don’t charge for shipping or handling. Don’t make the buyer return the defective DVD. Don’t make the process difficult. A simple phone call, e-mail message or note by mail from the buyer explaining the problem should suffice. In the nearly 15 years of selling and distributing videos, I’ve only had four defective return situations. If your duplicator/replicator is doing his job, this will not be an issue.
UPC Coding – The Universal Product Code, better known as a UPC, is literally on every product bought and sold in the United States, and elsewhere, today. Information provided by the series of lines and numbers allows global trading business partners (in other words, distributors, producers and video retailers) to know exactly what is being sold, in what quantities, and to whom. The code allows these businesses to track everything from product inventory levels in a warehouse to how many units a certain film or video has sold at a single location of a national mega-merchandiser. Most buyers, especially large retailers and on-line sellers, will require a UPC on your product before they even consider stocking it. The proliferation of product and the fact that so many customers use automated order and delivery systems makes it simply too difficult to track items by title anymore. Many fulfillment houses (like CreateSpace), offer UPC coding as a free service automatically applied to every film.
Shipping and freight – This item sounds pretty mundane, but there’s more to running a self-distribution operation then throwing a DVD in an envelope and dropping it at the post office. Most buyers you deal with, from the single mom-and-pop video shop to multi-store retailers, will want shipments of product via United Parcel Service, FedEx or other courier service. The reason? These shippers deliver at nearly the same time every day, rarely lose a package and offer the ability to track packages. Store owners can rely on quality delivery service and that’s a major concern with packaged goods sellers.
With regards to shipping terms, there’s really no standard operating procedure when you are self-distributing. When I make a solicitation, I always include shipping in the price. If I advertise a film to video stores for $20, that’s what they pay. Obviously this cuts into profits, but small factors such as free shipping and quick order turnaround often help convince a buyer on the fence to order a DVD or two. Only with large retail accounts, where shipping can cost $100 or more per order, and when shipping to foreign accounts have I charged the buyer for freight. This is due to the increased shipping and duty costs and paperwork associated with moving DVDs from the United States to Canada or Mexico. You can’t simply mail a box of movies to our northern neighbors. Specific regulations governing the content of the film require the completion of forms for immigration passage. This is one time you may want to speak with your neighborhood postmaster to learn of the easiest method of delivery.
Shipping costs to consider also include the price of boxes and cushion filler, padded envelopes, labels and packing tape. These minor essentials can add up quickly if bought in small quantities. Gauging future sales will allow for cheaper bulk purchases of these and other expendable packing supplies. Also investigate the pick-pack-and-ship services of DVD replication companies, as many offer this service as part of their offerings to producers. Shipping costs to consider also include the price of boxes and cushion filler, padded envelopes, labels and packing tape. These minor essentials can add up quickly if bought in small quantities. Gauging future sales will allow for cheaper bulk purchases of these and other expendable packing supplies. Also investigate the pick-pack-and-ship services of DVD replication companies, as many offer this service as part of their offerings to producers.
Mark Steven Bosko, author of The Complete Independent Movie Marketing Handbook and DVD On Demand as well as the upcoming Making Movies that Make Money, works as an independent distribution representative and consultant. A well-known professional in the industry, Bosko regularly speaks at film festivals around the country via his FilmPush seminar series and writes regularly for Moviemaker, IndieSlate, Videomaker and Millimeter magazines. You can reach him at .