Coming Together

Steve Javors
It’s said that from acorns mighty oaks grow. Similarly, from small ideas, big results can be achieved. Such is the case for the Adult Merchant Exchange, a peer group for retailers, wholesalers and adult studios that has expanded and grown since its inception in 2007. What began as a small group comprised of five or six independent retailers has ballooned to include all sectors of the adult DVD supply chain.

Stevenson, owner of The Big DVD Superstore in Syracuse, N.Y. adjacent Liverpool, the Adult Merchant Exchange’s creation can be traced back to the demise of the Video Software Dealers Association (VSDA) of which Stevenson served as head of the upstate New York chapter made up of about 70 independent retailers.

As video sales declined, so did the VSDA’s influence and membership. This left such similarly aligned retailers with a diminishing peer group. Since there is strength in numbers, Stevenson and other retailers formed the Wine Cellar group, so named because the group first met at the Wine Cellar at the Rio in Las Vegas.

“The issue with the Wine Cellar group was that it concentrated mostly on non-adult product, but since I made most of my money with adult and cared about it the most, it didn’t fully give me everything I needed,” Stevenson told XBIZ.

The members of the AME sell mainstream product but use it as a loss leader of sorts to get foot traffic in their stores where they hope customers will gravitate towards the adult section — their profit center.

While Stevenson still is a member of the Wine Cellar group, he decided to form his own organization to better — and more specifically — address the needs of retailers that sold, and profited from, the sale of adult products.

The focus of the group isn’t particularly on the retail buying end, but is positioned more as an educational group acting as a conduit where ideas, information and knowledge can flow through and be shared among its members.

The group mostly communicates via email, but also uses a message board to more effectively share information with the group. Still, Stevenson reasoned, nothing produces better results than a face-to-face meeting.

“The basic premise of the group is to bring everyone together under a common purpose of facilitating business and ideas,” Stevenson said. “This way, when issues or developments arise, we already know each other and can work through it. The retail market is an interesting one and we all benefit from sharing what works best for each of us.”

Initially composed of members of the Wine Cellar group and their friends, the AME has grown to accommodate wholesalers like IVD and GVA and studios including Hush Hush Entertainment, Hustler Video and Wicked Pictures. It’s retail members come from all over the country including Indiana, Ohio, Illinois, Florida, Maine and Texas.

All told, its membership represents more than 40 retail locations where adult goods are sold.

Members of the group first met in person in early 2008 in Chicago and went on to meet later that year in Mystic, Conn. and this year in May in Cleveland.

“Attendance has stayed consistent since the first meeting,” Stevenson reported. “The most important thing is retailer attendance. This year, I’ll start to incorporate all-adult stores in the group if for no other reason than we need retail members.”

AME’s meetings are part social function, part business conference.

At the group’s last meeting May 12-14, attendees had the opportunity for numerous meet-and-greets, including a trip to the Rock ‘n’ Roll Hall of Fame, a tour and warehouse sale at GVA and group dinners.

Part of the business component has various members presenting discussion topics and sharing ideas. For example, Rob Ragan of All Boys Distribution suggested putting a rainbow sticker on a store’s front door to show you’re gay friendly, Hush Hush Entertainment/Shane’s World’s Nate Glass discussed ways to combat piracy; IVD’s Cee Cee Peters suggested giving away inexpensive DVDs with purchases as a “free gift” value add; and AAA News’ Sid Grieff cautioned retailers to be extra vigilant about ordering new product because he’s found that since the date of production is no longer required on the back of the box, certain companies are trying to sneak in DVDs with only one or two new scenes as a new release.

AME’s next meeting is slated for October in Atlantic City, N.J. to coordinate with IVD’s warehouse sale. The AME also dips its toes in legal issues and has discussed local zoning regulations across the country that effect adult retailers. The group has aligned itself with the Free Speech Coalition, of whom most of AME are members of, to keep an open channel of communication with regards to local political issues.

As for dealing with an uncooperative economy coupled with a changing preferred content delivery medium, Stevenson credits the cheaper price point of renting an adult DVD as opposed to purchasing it as the main reason his rental business has remained robust. “Simply, because of the economy, where a customer who feels the pinch might have bought a DVD, it’s more attractive now for him to just rent it for a couple bucks,” Stevenson reasoned.

Rental customers also benefit The Big DVD Superstore by keeping consistent foot traffic coming back in the store for returns. The upshot — upselling them each time they come back.

“We do a lot of rental business,” Stevenson said. “Most of the product that isn’t cataloged, we buy for rentals. Even though sales are down, rentals are up. My purchases of new releases for rentals certainly have not decreased in any way.”

Stevenson cites the amount of free content available on illegal tube sites as the most significant challenge adult retailers are faced with. He tries to combat that by bringing in about 100 new releases each week, “so no matter how fast movies get put on the Internet, I bring in as many new movies as possible.”

One promising avenue Stevenson pledges to explore is the sale of adult toys, novelties and lingerie, none of which he carries. He said the topic would be the focus of AME’s next meeting sometime next year.

Parties interested in joining AME are encouraged to call Stevenson directly at (315) 383-3968, or by email at dsteven3@twcny.rr.com.

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