Do you want to know how much money RedBox franchise owners make yearly? If YES, here are 5 factors that determine the income & profit margin for RedBox. Redbox has proven to be one of most exciting and lucrative franchises to ever grace the movie rental industry in a long time.

Redbox offers a simple solution for renting movies. For about $1 a day, customers can easily access a new release at their convenience. The business also comes with very little risk since a credit card is required to facilitate the rental. Once the movie isn’t returned, you just charge the maximum amount of rental days and end up with a profit anyway.

DVDs are not just the only services offered at a Redbox location either. All Redbox kiosks offer a limited number of Blu – Ray discs for customers to enjoy a movie in HD. There are also games from today’s top gaming platforms for daily rent.

Another benefit of this franchise opportunity is the fact that a community could need several locations. A lot of big communities in the United States don’t even have a Redbox kiosk. Redbox kiosks can be found in high traffic locations, making it the ideal supplement for your store or a good relationship with a grocery outlet or even a Wal – Mart in your community.

Note that with as much as 50,000 locations available right now, the ability to return a movie to any location, and online reservations that coordinate with local boxes, makes this franchise opportunity an ideal choice for any willing entrepreneur. In the United States, DVD kiosk rentals are booming and Redbox is clearly the leader in the industry with over 50% of the physical DVD rental market.

The DVD kiosk rental business is simply brilliant especially since the machine does the work and you enjoy a low – overhead and low – hassle business. Have it in mind that a business like this one could even let you keep your full – time job as the only task that is needed is stocking the machines and checking their operation to make sure they are operating correctly.

While Redbox is the most noticeable player in the industry and would be the best choice to franchise from since they are so well known, Redbox does not offer opportunities to franchise, rather they offer landowners of high – traffic locations rental income for these kiosks.

Estimated Income and Profits of Redbox Franchises

If you’re looking for an employment opportunity, Redbox indeed provides a fairly independent working environment that could allow you to earn some spare cash. Agreeably, it may not be the most viable full – time position if you’re looking for full – time income, but it could be the fill – in position that you may need to keep the lights on, the water flowing and your expenses adequate.

Note that you may not be able to franchise or even become an affiliate of Redbox currently, but circumstances can always change. If franchising options becomes available in the future to complement their leasing options, then this would be an exciting investment opportunity.

The average kiosk installation costs less than $25k, which simply means you will have a very affordable way of adding another stream of revenue into your portfolio without the intricacies of trying to license movie rights, pay royalties, and all of the other fees and agreements that are required in the entertainment industry.

Redbox is owned by a parent company named Outerwall and this company’s was formally known as Coinstar and is reported to have taken over 50% of the physical movie rental market. Outerwall’s net income for the past 12 months was $2.28 billion, gross profit of $693 million and net profit of $175 million. According to reports, the latest quarter showed 199.5 million rentals across their kiosks.

Note that this income is as a result of all Redbox automated retail solutions which include not only Redbox, but kiosks in coins, coffee, refurbished electronics and self – service photo booths.

Even though these numbers include all of the different kiosks, a reasonable assumption can be made that they should be close to the Redbox figures as Redbox makes up a significant portion of sales.  As such gross profit would be approximately 30% of sales and net profit (the amount they take home) is 7.67%.

According to industry reports, the company generates $45,000 average revenue per kiosk, which was down from $50,000 the previous quarter buttressing the fact that streaming videos are taking a big chunk of revenues and the long – term viability of the DVD kiosk may be at risk.

Owing to the above numbers, an average Redbox kiosk would bring a gross profit ($45,000 * 30%) of $13,500 or a take home, net profit of $3,452 ($45,000 * 7.67%). These numbers are merely estimates and the take home number includes the perks of the executives of the company and other corporate waste that is normal in large businesses.

How to Become a Redbox Vendor

Becoming a Redbox vendor in the United States requires an application process and a proven business location that meets Redbox requirements. However, very little information is known regarding Redbox vendor or franchise processes and despite a successful business model, Redbox has declined as streaming services increase.

1. Secure Redbox Locations

The first step in the franchising process for Redbox is the location. You will have to get a location that can be immediately receptive to the DVD and Blu – Ray kiosk that will be put up. Also you can have a single or a double machine, but you will need to have a high level of traffic that passes by your location on a daily basis.

Note that if you don’t have high traffic levels, Redbox won’t even consider you for a franchise at all. You’ll need to submit your personal information and detailed information about the location you have. You will be required to have a minimum traffic number of 15k people per week. There are approved locations with lower traffic numbers, but the more detailed your numbers happen to be; the better your chances are of becoming a franchisee.

2. Contact Redbox Directly

Note that you will need to specifically request a Location Suitability Form directly from Redbox in order to proceed. According to reports, this comes through your email [or your preferred contact method] and you submit all of the required data.

Successful applications always tend to have an image of the desired location of the kiosk so the organization can see clearly what you’ve got. If your application gets approved, then you will sign an agreement with Redbox regarding the lease of your location. Note that you don’t actually get to own the machine or the movies.

You are more or less in charge of the place where the machine is. Redbox will send their own employees to that location to facilitate movie changes, billboard updates, and servicing of the machine. But you will be paid for the space as you would be in any other type of vending agreement.

Conclusion

While there is not a Redbox franchise profit since the company does not franchise their machine, perhaps there is a way to profit from the DVD kiosks. While there are no official industry figures as to how much an individual kiosk can profit, the above facts can help put you towards the right direction.

Also note that Redbox is so well established that making a case for a new location is often difficult. Consider other DVD rental kiosk franchise options or consider an entirely different use of that available space. Redbox has numerous competitors that operate on a similar business model. Research and compare the costs and benefits from each alternative.

Joy Nwokoro