Friday, June 3, 2011

More info and tad bit of relief.

Same day digital release and 52 new #1'2.

With all these kinds of announcements, I've learned it's best not to jump to too many conclusions. Otherwise, I'd be having a nervous breakdown every other day.

My compatriot over in Roseburg, Brett from Heroes Haven, had the best comment: As long as we keep getting a shipment of new comics to sell every Wednesday, not that much will change.

I used that line on several customers; otherwise I shrugged. (Interestingly, just about every customer had heard about the news...)

So -- later in the afternoon -- further news was released, which will ameliorate most short term problems. The digital price will be the same as the regular price. They will be giving us steep discounts on a few of the more significant titles, and returnability (-10%) on most of the rest of the titles. (A host of variant covers, but I expected that.)

So, knowing this, I'll probably order considerably more than usual.

And, hey, how often do you get a chance to buy a #1 Batman or Superman or Wonderwoman?

I'm hoping a bunch of people will give these new starts a shot.

The other news is that they aren't complete reboots --which was concerning to many current readers.

So, I'm going to try to see this as a positive.

As far as the long term viability of the process and the long term effects of digital -- well, the long term is always a bit dodgy and doubtful, you know?


Meanwhile, someone who works at Barnes and Noble and knows comic books, had a few more details on their new comic program. Something like 10 each of 60 different titles.

Ummm.....that's utterly ridiculous. If they sell more than 10% of that, I'd be amazed. That is a HUGE number of comics for a town like Bend, and presumably other similar sized population areas.

Good luck with that.

Only question I have about that -- who eats the vast majority of comic returns? B & N or the comic companies? Either way, I don't see that as sustainable....

I think B & N is about to get a huge surprise.....

(My friend Paul pointed out --- "Isn't it interesting that the B & N program is starting at about the same time as the DC initiative? ummmm?" I hadn't thought of that -- especially with the returnability aspect.)

Even if B & N tries to fine tune their orders -- you know, 10 of that, 3 of that, 12 of that, the comics change so frequently and often that it would require a full-time staff person in each individual store to keep up. You know, someone like me.


RDC said...

Not sure why you would think that it would take a full time person in each store to keep up. In general Big Box stores have centralized decision making. There are some variations in the ability of local store managers to influence things but in general:

They have a sales plan. Corporate generates a plan, Corporate buyers acquire the product. The product shows up at the store and is put on shelves. Sales are recorded and used to update the plan and future purchases. Doesn't make really any difference if it is comic books or candy bars as far as store staffing goes.

The local store manager may or may not have an ability to influence quantities. If they do it is usually only the ability to add to the material being ordered (special orders, etc) not the ability to substract from it.

I suspect that they do have the ability to return unsold or more typically to document destruction for a credit.

Duncan McGeary said...

A candy bar is a candy bar is a candy bar.

A Batman comic is --

Well, for six months it has Frank Miller as a writer, and Jim Lee as a artist.

On the seventh month, it has Joe Smo as writer, and Bill Smo as artist.

A couple more issues written by Frank Miller, but drawn by the worse artist in comics, then you have one more by Frank Miller and Jim Lee, then one drawn by Jim Lee but written by the worse comic writer, and so on.

All of these will sell completely differently. All I take into account when I order.

Every comic I don't sell, is worth two comics I do sell. Without the profit.

And every title has similar dynamics.

Duncan McGeary said...

The reality of the comic market?

I carry probably 300 titles in any single month -- and I sell anywhere from 1 each to maybe 50 each. But mostly ones and twos.

If I sell two to three copies each of 200 different comics, it's the equivalent of selling 10 copies each of 60 comics.

My model was arrived at after long and hard experience.

When anyone asks me "What's selling a lot?" I answer. "Nothing...everything is selling a little..."

What's going to happen is -- they'll sell out of 10 titles, sell half of 10 other titles, two or three of 10 other titles, one of 10 other titles, and none of 10 titles...

Or a 1/3rd sell through.

If that. (Especially in Bend sized towns...) Which might be fine if they have returnability. But if they have returnability, at higher margins, it will kill the comic publishers. If they have returnabiliy at lower margins...then their profits per foot will suck.

Comics take up twice as much room as your average paperback, and sell for half the price. So you have to sell 4 or 5 times the numbers per foot to equal one book.

Shall I go on?

Whenever any other mass market store has taken on comics, they have neglected them --because in the majority of stores the clerks aren't comic people --they're book people. They may not even like comics. But comics have to be constantly straightened and taken care of or they get damaged
and comic people notice and do not buy.

Finally, they will be shocked by how few comics sell. I mean, it really is amazing.

The direct market exists because the newsstand and grocery market abandoned comics. And that is a time when comics were selling much much better than today.

After 30 years in business, I put one or two or three copies of even the best-selling comics out for sale -- the rest are already spoken for by regular customers. I'll eat about half of those I put out -- and I leave them out for months, not weeks.

B & N's plans are breathtaking in their grandiosity.

Duncan McGeary said...

How well do comics sell?

Let's take a well-known character -- how about Silver Surfer, Herald of Galactus?

I sell -- one.

ONE. 1. uno.

Before DC spent the last three years flogging Green Lantern and Flash and Green Arrow, I used to use them as an example.

One Flash.
One Green Arrow.
Two Green Lanterns.

They sell much better now, but you know what? Superman and Batman and Wonder Woman sell much less.

Same thing happens with Marvel. Before Marvel started flogging the Avengers Universe (you can see why -- Captain America, Hulk, Iron Man, Thor, etc.) the big sellers were X-Men titles.

Back then, I might only sell a few Iron Man's, but many copies of the Uncanny X-Men, or X-Men, or Wolverine.

Now? Those X-titles sell pretty poorly. So for every copy I now sell of Iron Man, I probably sell one less of Uncanny X-Men.

These companies can only get enough talent and promotion and attention to one segment of their market at a time.

Either that, or the market only has so much money in it, and whatever you squeeze out in one part, is diminished in another part.

So bottomline -- will the sheer exposure to comics mean they sell better?

Ask me how many Thor comics I sold this month above normal.

None. Nada. Zip.

Duncan McGeary said...

Hey, Brett. Am I being overly negative? What's your take?

RDC said...


The point is that your store exists because you are running it and you are providing the expertise to be successful. You model is a high inventory, slow turn over model. In your business every sale is important and you can not afford to have product that does not eventually sell.

Their model is totaly different. They buy the product based upon a corporate model, they display it and it sells or it doesn't. Depending upon what happens they adjust the model as far as volumes.

They, unlike your store, can probably get credit back (atleast a percentage) for things that don't sell. So their risk is the floor space, handling, and some opportunity cost on the capital.

In your case your risk is the floor space, handling and shipping charges and the entire cost of capital and will as the opportunity cost.

A totally different equation.

It would be interesting to check the filings of the comic companies (if they are public companies) and see what they say and how the sales are reported as revenue. They are tracked differently if a right of return exists because a company cannot book more in sales than they expect that net sales number to be (sales - returns).

Duncan McGeary said...

If B & N ever accomplished an 80% sell through, I'll be utterly astonished. But an 80% sell through at 20% margins is -- zip.

If Dc and Marvel are offering, say, 40% margins, then they are eating the difference.

A twenty percent return rate will get them 40% the profits they get from the direct market.

But what will really kill this venture will be the total lack of sales.

I predict they'll never do better than 50% sell through, even after refinement.

I need more or less a 90% sell through, because I can't return anything. And even 90% only works because I sell the occasional back issue.

In my opinion, after trying to sell comics to non-comic customers for 30 years, and asking comic readers how they started, they started idiosyncratically. They started individually and incrementally.

No amount of exposure or advertising will turn a mass of consumers into comic readers. I just don't believe that will happen.

So what may happen is the actual real readers of comics may be cannibalized. Which won't help anyone.

Hey, if they are marginally successful, I might -- I do mean MIGHT -- get some new customers. I might get people in looking for an issue or two they missed, some of them may become regulars.

If it is marginally successful, but B & N gives up after a year or two, I might inherit a few new readers. Might.

Duncan McGeary said...

Yes, RDC.

But they still have to sell comics.

Are you going to suddenly buy a comic? Are any of you reading this right now more likely to buy a comic?

I rest my case.

RDC said...

If they have right or return for full credit they could have 30% sell through and make money. It all depend upon the contract they are getting.

I suspect the comic publishers is saying that printing costs are cheap. Who knows with the move to digital they might even need the volume to keep their printing costs per volume low.

B&N has plenty of floor space so it doesn't really cost them anything to put in comic books, if they have right of return.

I suspect that the tie in extends to the comics being offered digitally on the colored version of the Nook.

It will be interesting to see what digital formats they are supporting.

RDC said...

Not going to buy a paper book for that matter. Still buy paper newspapers though.

Duncan McGeary said...

RDC, you just get a little too cute on your answers.

When I ask you if you are going to buy a comic, you don't just say, "no."

Meanwhile-- take all the details of sell-through and distribution and sales per foot and margins and all the rest and through it out.

It will be the total lack of sales that will doom this venture.

Just that -- miniscule sales.

I also foresee a firestorm or two of parents and grandparents buying comics for junior and finding them completely inappropriate.

RDC said...

Don't disagree there.

In reality this has all of the ear marks as something temporary in the evolvement of their (both B&N and the Comics company) digital strategy.

Anonymous said...

No, I don't see you as overly negative. I have similar observations. But, I am more ambivalent about it all. I would say my Comic Book Kung Fu is second to none. :)

Heroes Haven

Springfield said...

Here's what I've found out by online selling & as a public store @ the Gateway Mall, Springfield: Big Box stores will try an experiment with lots of money and if it doesn't do quick returns, they bail on it within 6 months. I see this over and over again. If B&N doesn't see themselves selling over half their comics (which they won't), they'll bail by Spring. I've seen this with Target, Fred Meyers, Wal-Mart, & Toys R Us. Statistically, it takes 4 months for customers to notice something new in your store and continually go back to it as a staple (i.e., comics, Dr. Who, or any other new thing within the store).