What is it like to run a successful eCommerce business? To find out, Digital Journal spoke with Jeff Walker, CEO of Alliance Entertainment.
Alliance Entertainment is a distributor and wholesaler of the world’s largest in stock selection of music, movies, video games, electronics, arcades, and collectibles. Alliance stocks over 485,000 entertainment products from Microsoft, Nintendo, Electronic Arts, Sega, Disney, Warner Home Video, Universal Video, Sony Pictures, Fox, Lionsgate, Paramount, Warner Music, Sony Music, Universal Music, Lego, Hasbro, and over 500 additional Entertainment product manufacturers.
eCommerce fulfilment is a cornerstone of Alliance’s success and a significant growing division with over 38 percent of the companies $1.4 billion in sales being delivered directly to consumers homes. In 2021 over 13,845,000 products were delivered as a drop shipper for Amazon, Walmart, Best Buy, Wayfair, GameStop, Kohls, Target, and hundreds of additional eCommerce customers.
Digital Journal: Can you provide a brief background on Alliance Entertainment?
Jeff Walker: Alliance Entertainment stocks the world’s largest selection of entertainment products with over 325,000 unique titles of vinyl, CD’s, DVD’s, video game hardware and software, arcades, collectibles, toys, and electronics in our 900,000 square foot warehouse in Shepherdsville Kentucky with sales to 72 countries totalling over $1.1B in annual revenue.
DJ: How has your company come to work with some of these top brands?
Walker: Starting as a music store and meeting the record labels opened the door to direct accounts in music. Through more than a dozen acquisitions, coupled with organic growth, we have developed relationships with all the major music, video, gaming, and toy suppliers. We started selling Amazon music in 1997 before they were direct and over the years have opened sales relationships with all the major U.S. retailers, including Walmart, Target, Best Buy, Costco, Barnes & Noble, Wayfair, Home Depot, and thousands more.
DJ: In an increasingly digital world, how has your company pivoted/survived with hard copies of media?
Walker: Physical media will never go away as it continues to be a collectible item. People consume media in different formats and THAT is why physical media will always be viable. Alliance is there to serve those different funnels and the growth of vinyl is one example, but there are several, as its not simply collectibles. Just like in the past, people had vinyl collections. Today vinyl has been one of the most popular collectible items. In video there are collectible sets of our favourite movies and TV shows.
K-Pop music has caused rapid growth in the collection of CD’s. People like to collect things and their favourite entertainment products are high on the list, it’s the cool factor of having something at your house or office that consumers desire.
DJ: Exclusive distribution rights have provided a huge growth opportunity for you. Can you explain how Alliance Entertainment has been able to capitalize on that?
Walker: Being the exclusive distributor of licensed products is a big strategic advantage as all the big retailers must buy from us. We have significant video content we license for DVD and digital distribution, and we have an over $120M a year of exclusive video distribution through our Distribution Solutions division. On the music side, we have AMPED which is a leading independent music distributor with over $80M in annual sales.
DJ: Where are you expecting Alliance Entertainment to go in the next 5 years?
Walker: There will continue to be consolidation in entertainment and Alliance is the current distribution leader with a significant platform of operations that generates over $1B in annual revenue. Our ability to organically grow the business and complete strategic acquisitions will continue to propel growth over the next five years. As we continue to pick up market share, our margins are also forecasted to move higher. There is unlimited possibilities in every direction of entertainment for Alliance to grab in the future.
