Ryan Kugler knew it was time to diversify his company when the home entertainment industry started turning away from CDs and DVDs to embrace digital content. Kugler and his brother Brad Kugler co-own an entertainment media liquidation company in Burbank called DVA Inc., which stands for Distribution Video & Audio. Over the past couple of years, the company has branched out from selling videos, music, games and books to other items such as electronics and cookware. Entertainment media products still make up a majority of the business, but the expansion has helped DVA boost its revenues, Kugler said. DVA reaped $23.5 million in revenues last year, Kugler said, recalling that 20 years ago the company’s sales were only a couple of million. To grow sales, DVA has shifted its customer strategy from targeting mom-and-pop shops to major retailers and individual buyers, he said. Kugler has worked at the family business since he attended high school. He has been DVA’s president and co-owner for about 10 years. His brother, who works from the company’s Florida office, is the CEO. The duo’s father purchased the company in 1988 as startup in Florida. His advice for staying afloat in an ever-changing market: Think outside of the box. Question: What was DVA’s first major change? Answer: Back in the late 1980s, early 1990s, video stores were popping up left and right. So the company at that time was supplying (used) videos, VHS videos, to all these stores. Every time a new store opened, you needed about 3,000 to 5,000 videos to open the store with. (Later) we got a call from McDonald’s to sell us movies. McDonald’s used to give away movies in their Happy Meals. They offered us new VHS videos, and we took that product and sold it to Target. That’s actually what turned this company around and changed the focus. We started selling to large, big-box mass-merchant retail… like Target and Best Buy and Kmart and Sears. Q: What changes have you seen in the CD and DVD markets? A: The CD market has pretty much dropped 50 percent since iTunes and MP3s and Napster came out. The CD sales, the physical sales, have definitely dropped because people don’t want an album anymore. They just want the song. In the DVD world, if you look back at the timeline 15 years ago, people didn’t have as much to do at night. Back then, when you turned on the TV, you pretty much had a few channels to choose from. Today you have over 500 channels to choose from. So the option of watching a movie or renting a movie has declined because there’s so many forms of entertainment out there. Q: With CDs and DVDs being major products for DVA, how has your company coped with these market changes? A: We saw this happening and I said, ‘Let’s actually move beyond media products. Let’s start moving iPods. Let’s start moving TVs. Let’s start moving cooking products. Let’s start moving apparel.’ That’s what happened. We jumped another $5 million (in revenue) by doing that. We (also) sell directly to other Internet resellers. That area’s grown, too, because in a recession everyone’s out of a job. They go home and they say, ‘Well, I’ll just go sell stuff out of my house and set up an account.’ They find a product that does well like movies … and they go ‘Why don’t I sell more movies?’ Then they go to a Web site like ours, called DVASpecial.com, where they’ll buy 500 movies from us and then they go list each one online. So the business of buying excess inventory, liquidation inventory, has gained momentum, especially in a recession. More people want to sell inventory. Title: President and Co-Owner Age: 36 Most Admired person: My father, Ben Kugler Career Turning Point: When McDonald’s called us to sell us videos Personal: Married with two children Q: Do you still see CDs and DVDs as viable products even with major movie rental and CD retailers going out of business? A: Yes, it’s very viable. There’s still business. And also when a product goes under or a product goes away or a product declines, there’s still one company that needs to sell the product. We will be the last company selling it. Movies, and music and games – that is still over 75 percent of our business. We will not get into digital because there is not a business for digital right now. No one is really making money in digital. We’re going to continue to do physical product. There will always be physical product to distribute, and we have the outlets to sell to, because there will always be retail. There will never be a world where you will just buy everything on the Internet. People want to touch and feel and see product. People always want deals. Q: What advice would you give to other business owners who are in markets that are becoming obsolete? A: If the sales are down, you do need to do something different to change it, and the way to do it is to think outside of the box. Do something different that you don’t normally do to promote your product or service. There is actually more opportunity today than there was 10 years ago. If someone gets laid off from a job because (the company’s) not going to use a physical person and they’re going to use a computer now, there’s an opportunity to write the program for the computer. There’s always opportunity. Wherever a job is replaced, it’s replaced by something else. Q: What are your goals for DVA? A: To acquire about four or five more companies, to get the company up to $100 million, and to get a patent on a product. We (already) bought a company called Niche Sales, which sells to ancillary and tertiary markets like zoos and museums and gift shops. (We) bought that about a year and a half ago. That (company) was based in Southern California. … That’s already added a few million to our bottom line because we acquired the accounts. We acquired the personnel.
Media Reseller Finds New Wares
