Forum - View topicHow much do anime DVDs cost wholesale?
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Porcupine
 Posts: 1033 |
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I realize the prices probably vary depending upon release studio, etc....but does anyone have any idea what the typical wholesale prices for anime DVDs and boxsets are? I'm just curious to know. How much profit do retail stores make each time they sell a DVD? And I'm also curious if shipping costs (for the store to receive its shipments) are significant, or if they buy in such bulk that their shipping costs are irrelevant?
For a typical single anime DVD which costs $30 retail (and which can also probably be gotten for $20-$25 via reasonably decent shopping)...what would the wholesale price be? Maybe $10-$15 I'm guessing? Does anyone know for sure? Similarly, what about a typical anime "Vol. 1 w/box" or re-released season boxset (or a halfseason set in some cases) which would typically be $40 retail (and which can probably be gotten for $30-$35 in reality at many places). What about the cheaper titles that retail for $20 (such as Noein series or most things released by US Manga these days, some of the Yugioh/Pokemon DVDs, etc)? |
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Thanatos01s2
 Posts: 231 |
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A single DVD costs about $17
A Boxset (V1+boxart) about $22 A rerelease if it's a $40 most likely $31. |
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Porcupine
Posts: 1033 |
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Wow, I'm surprised the profit margins for retailers are that small. I have a hard time believing that's true, to be honest. For example the typical single anime DVD at Suncoast costs me $18 every time ($19 with tax, but the store doesn't get that $1 the government does), as long as I either reserve it ahead of time or have a member's card (which I do). If what you say is correct, then that means everytime I buy from them they only make $1 off of me. I don't see how they could stay in business with that business model.
If you don't mind my asking, how do you know these figures? As another example of how those figures seem hard to believe: consider the Internet website www.dvdpacific.com which other users on this board recently recommended to me. They sell their typical single anime DVD ($30 retail) for $17.08. That means, according to you, and assuming their shipping charge reflects the actual shipping cost (which it does seem to, their shipping prices are typical) they only make 8 cents per sale. I don't see how they could stay in business either. |
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indrik
 Posts: 365 Location: yonder |
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Back when I worked retail, conventional wisdom was that for non-commodity luxury items (that is, stuff that you don't need to have to live but only a relatvely few people want), suggested retail was the closest whole dollar to a 50% profit margin, meaning that half of the MSRP would be profit for the seller. If that's accurate here (keeping in mind that I never worked for a dvd seller) that would make wholesale for anime dvds in the neighborhood of $15. That seems to fit with things like Right Stuf's normal 40% off sales, the Suncoast sales you're talking about, things like that, since they take the retail price down to the neighborhood of $17-$18, which is still above that projected wholesale.
It's important to keep in mind, I think, that regular, mainstream dvds probably are commodity items, so their wholesale will be lower, and profit margins will be slimmer, with the expectation of many more units moved. It's also important to remember that almost nobody actually pays wholesale: the wholesale price is typically advertised to the retailers, who then get a discount for what they buy based on volume. I've never personally seen this go over about 5% off wholesale, but I worked for small companies. Most retailers get 30-90 days to pay the wholesale bill, which is why many of them are willing to cut margins slim in the initial going to get money coming through with which to pay the bills. (If they bought 20 copies at $20 each, they'd have to come up with $400 in a month, so they price them at $35, on sale for $30, and hope they sell 14 of their units. After that, they put it up to their $35 normal price, and let it sit there, since it's all profit.) If they're getting an additional discount below wholesale, that means that they're making just that little bit more money, too. That's kind of general and not necessarily relevant, but I think the general reasoning's sound, and it fits my experience. I would be surprised, though, if anybody who knows the actual answer is gonna tell. They could potentially get in big trouble. |
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wapak
Posts: 2 |
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here in quiapo philippines you can only buy anime dvd for only half dollar. equivalent of 1 dollar here is 50 and you can avail of anime dvd for only 25 (1 disc), its cheap right? my collection of anime is almost 100 and counting because of its cheap price...but that dvd is pirated but the same quality as original... haha
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Porcupine
Posts: 1033 |
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Wow, thanks for the explanation, indrik. Yeah that's what I was thinking too, but you went into far more detail than I ever expected. I also never realized that retailers sometimes do not have to pay the bills for their product up-front...that's interesting too. Thanks again.
Eh? Are wholesale prices supposed to be a carefully-guarded secret? I would think that anyone could blab it out if they wanted to. If I worked for a store or ran a store, I could just post here anonymously and who would ever know who it was who blabbed? |
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Porcupine
Posts: 1033 |
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Eh? You mean 1 pirated DVD there is $25 US dollars equivalent? That's not cheap, that's about the same we pay over here on average for official product (not on special sale). |
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indrik
Posts: 365 Location: yonder |
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Well, price sheets get out every now and then, but the discounts are closely guarded secrets. Imagine Suncaost finding out that ADV gave Best Buy a 5% dicount off of wholesale, while they were only getting 3%. It'd really screw up some negotiating, or at least some buyers would get fired. So people tended to be pretty secretive about that stuff. It's also usually in the sales contract that you won't divulge pricing, so if they could tie your post to a particular store or chain or soemthing, somebody could get sued. Almost all buying and selling is done on terms- in manufacturing, we'd buy the stuff to make stuff on 90-day terms (people just say that "90-net"), and sell the stuff we made on 60-day terms, hoping we'd get paid before our bills were due. There were times when we wouldn't pay bills on time and we'd get stuck on shorter terms, and a couple of times when we were cash only, but that was rare, and only after we had failed to pay several times. That happened a couple of times with a brand new business, problems with startup capital and cash flow and trying to establish credit with the wholesalers. |
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larinon
 Posts: 992 Location: Midland, TX |
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There's a huge fundamental difference when you start comparing a brick & mortar retailer (i.e. someone who actually has a store) versus an online retailer. The difference being that in a brick & mortar store they have to pay taxes on their land, pay employees to work cash registers, hire managers to keep track of all these employees, and so on. There are a lot of extra costs that go into running an actual business where people can walk in, browse, and make purchases. Online stores don't have to worry about quite so many different costs of doing business. Certainly they have to have some employees to keep things going, and warehouse space to store their products, but these usually have nowhere near the same expenses as they would otherwise. A warehouse doesn't have to be located on prime real estate to entice customers, so typically the prices and taxes involved are much less. As a result of having smaller costs of operations, online retailers can still earn the same profit margins (or better) than brick & mortar retailers, while seriously undercutting them with the prices that you mention. A friend of mine owns a comic shop and used to sell anime in his store. For a while he was actually working as a distributor for Pioneer. This meant that not only was he able to purchase anime at wholesale rates, but he also had to buy a certain amount to distribute every month. Typically that's what the requirement is to get wholesale price: buying some set minimum amount so that the company is guaranteed a certain amount of revenue. I forget how much was required though. >.< Support your local anime shop! |
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wapak
Posts: 2 |
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no its half of 1 dollar. 1 dollar if you convert to our currency its equivalent to 50 45 pesos but you can only buy it for 25 pesos which is equivalent to half of 1 dollar. |
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darkhunter
 Posts: 2992 Location: Los Angelas |
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Well it's not the same if you compare a pirated dvd to an official dvd. |
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Porcupine
Posts: 1033 |
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That's still damn cheap. 50 cents for a pirated DVD that is a perfect duplicate of the original commercial product is insane!! Is it really true? If anyone else could confirm it, that would be interesting.
In the USA, even the crappy quality pirated Hong Kong DVDs we get sell for about $8 to $15 a disc. Iari, yeah I totally agree with what you said. Still, I don't think even an online retailer could survive making 8 cents off a DVD. I'm inclined to agree with what indrik said, that the wholesale price is about $15 on average (half of retail) with an additional slight discount in some cases. Not $17 like Thanatos said which seems ridiculous to me. So far Thanatos hasn't responded or backed up his claims. Assuming the wholesale price is close to $15...then online retailers would be making about a reasonable amount per sale (couple bucks). While real life stores would be making at least 2x (selling for cheap like $19 - $20) to 8x (selling for retail) more per sale. Math and model seem consistent to me. Making 8 cents per sale, not even an online retailer could survive. |
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Porcupine
Posts: 1033 |
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We have comics stores that sell manga for really cheap though. |
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Randall Miyashiro
 Posts: 2451 Location: A block away from Golden Gate Park |
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Is Jellies still there? That was a huge store. I worked at Borders before they held DVDs, but I believe most books and CDs were close to 50% for mainstream stuff, although small press stuff would get a much smaller discount. I believe that large retailers get a special quantity break. The quantity break is why many bestsellers are cheaper than retail. I saw an article where Newegg was selling computer hardware below small retailers costs since they would order by insane bulk. I believe this is also how amazon gets insane deals which might surpass some retail outlet's costs. I often wonder how low this number gets, since TRSI has 40% off sales which can use the 10% membership and free shipping. In theory the printing and packaging cost should be well below $15 so I am curious on how the licensing fee cuts into the per unit cost. Where is the breaking point for licensing costs and unit numbers. It seems as though the more expensive licenses seem to be more cost effective over the cheaper rights to a series which will not sell. If the profit margin is small BVUSA could be making a ton more from each unit's sale compared to other companies and might not need to sell that many copies. I often wonder why new anime DVDs in the States go for $25-$30 MSRP regardless to how popular, or expensive the costs. I notice that the range in prices in Japanese DVDs really vary. |
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indrik
Posts: 365 Location: yonder |
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I've wondered that. We talked a lot about hitting prices that looked attractive- like, we would never have a price of $22.99, we'd make the sticker price $24.99 and put it on permanent "sale". I wonder if they're trying to hit a multiple of $5. Just looking through the first couple of pages of Amazon's (regular, non-anime) movie pages, they seem to be the same way, mostly with MSRPs of $25 or $30, although the discounts are obviously heavier. Even the old movies are $9.98 or $14.98, although there are a bunch in there that aren't even prices.
I would suspect that what companies are willing to pay for licensing fees is tied directly to the number of dvds they think they can sell, which could probably keep wholesale costs pretty close, even over a broad range of licensing costs or MSRPs. I think, from what I've heard, that the Japanese anime dvd market is more of a collector's market than a luxury good market, where the price is more driven by a perceived need than a perceived lack of need, if that makes sense. Like, in the US, price of anime dvds is driven down by people realizing they don't need them, while in Japan, prices are driven up by the rabidness of the fans that would by them. I'm not at all certain of that, though. If I remember right, back when I was cutting cds (tiny little really really crappy cds, like 200 units, and it took me seven years to get rid of them all) that our mechanical costs (rights to record the songs) accounted for a little less than half of our total costs. The figures I've got in my head are that we paid $7 per cd for recording, mastering, and reproduction, and $4 per for mechanicals. I would once again guess that that's probably a pretty reasonable ratio, although I'm much less confident in that figuring than the wholesale cost figuring. Edit: Oh ah, forgot. We had two anime-specific retailers in town, Starbase One and Joy's Japanimation, although Joy's is about an hour down the road. I used to work about 15 minutes from them, though. I don't know what happened to Starbase One, they moved and I didn't ever manage to figure out where they moved to. But they never seemed to have anything I was looking for, except for rental. It was kind of weird. |
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