From All Angles

[novus ordo seclorum]

Has anyone seen VMHIF?

Virtual Media Holdings (VMHIF) has a lot of things going for it. It has a great deal of potential to come across for investors. Why? For a number of reasons, not least of which is it’s profit potential. As Bill Fleckenstein noted on MSNBC, “investing is supposed to be about seeking out profitable companies that have high barriers to entry and/or strong growth prospects at a cheap or reasonable valuation.” VMHIF has this in spades.

VMHIF has strategic partners that are key to its core business, providing a marketplace for the buying and selling of DVD, books, music and video games. VMHIFs partners are the heavy hitters of online sales, offering a host of intellectual property on their portal, VMHsales.com. With these partnerships VMHIF has created a destination for the DVD, books, music and video game shopper. This is a tremendous barrier that other companies will have a great deal of difficulty emulating.

As for margins, the first rule of business is to keep overhead as low as possible. VMHIF has very little in the way of recurring expenses. A small staff and
hardly any debt means that margins are quite good. Indeed, the business
model has taken this into account. VMHIF has no inventory, which means that
it is the vendors themselves that shoulder the bulk of the customer service
tasks. VMHIF simply facilitates the flow of goods between seller and buyer, capitalism in its purest form.

This also means that VMHIF is not competing with their sellers, a possible impediment to the accumulation of new strategic partnerships. They are also selling tangible products, not downloads, so they can cultivate hardcore DVD, books, music and video game collectors who are considered the most profitable media consumers. These collectors spend huge percentages on these “objects” and have emotional connections to them making them quite loyal easily maintained repeat buyers.