Oh, pride.

Oh, pride,

I got a story for you. A lesson if you will. A lesson if you won't. 

You think you're unique, but you're so average, so very plain.

You aren't all that different, sorry to say, yet happy to live.

There was a time when average was a fervent wish,

just to be among people and not stand out.

So, pride,

Take a step back, rethink your thoughts.

Remember fame is empty, 

money but a tool, 

the woman beside you is all,

I admit it, she is all. 

She'll scoff, she may even frown,

but I'll just laugh. 

"And maybe the cat. And my sons, 

and my store, 

and the words written on this page."

So, pride,

You've been told, 

and you been dismissed, 

we're all average in the end. 

Breathtaking business naivete.

Business naivete is more common than not, especially amongst consumers. There are so many misconceptions about small business that all you can do is shrug. You have to keep on doing what you know. 

But it's even more breathtaking to me how naive some of the comic store owners who make comments on the comic biz sites are. They somehow see something that has almost no benefit for their businesses as a good thing. They dismiss the dangers as people being hyperbolic. 

Basically, you can divide the owners into two camps--those who fully experienced the collapse of the comic market in the 90s and those that didn't. Far be it for the newcomers--and they may have been in business for twenty years by now--to listen to the old farts. Worse, the newcomers take a moral high ground, lecturing us about how we're too negative.

Some of the things they say are ludicrous. 

The best example is how some of these business owners somehow believe that Penguin Random House--the biggest publisher in America--is somehow going to be good for small comic publishers. As if PRH is going to expend a bunch of money and time promoting publishers who barely make a blip on their bottom line. (They might want to talk to indie book publishers about that.)

One of the things I've always been amazed by is how Diamond Comics has been willing to deal with extremely small quantities of orders. One comic per five hundred stores--things like that. I'm betting it takes almost as much time for an employee to go to the bin to grab a single issue as it does to pick out ten or twenty or a hundred. 

I'm imagining PRH's first conversations with a comic shop owner: "Hi. This is Comic Book Guy Comics. I want to report that two of my five Incredible Hulk comics have dings in the corner.... Hello? Hello?"

Most importantly, our industry is extremely small relative to everyone else. I suspect that even PRH was seduced by the idea of comics because of their prevalence online, in the theaters, and on the streaming services.

Let me just say: what you see is not what you get. Comics don't sell huge numbers because everyone knows who Spider-man is. The clearest way to make this clear is to as you--dear reader--a simple question. 

"When was the last time you went into a comic store and purchased a monthly comic?"

I can guarantee that the vast majority of people who read this blog haven't done so in a long time. And these are people who are interested enough to read this blog!

As I said above, all I can do is take care of business as clear-eyed as I can. 

They're coming...

Woke up to a bright, crisp Central Oregon Spring morning. It filled me with contentment. This is what I've always loved about this place, the smell, the feel of the air. A little white snow on the ground, but flowers starting to emerge too. The whole atmosphere just settles over me with a nostalgic blanket. 

We just had a mammoth week at the store with Spring Break. I mean, it was frightening. If we make it through this, it will definitely show the efficacy of masks, because that all we really demanded from our customers. I've been double-masking ever since I had the thought. 

So at a time of year when we are usually struggling to break-even, we are doing considerably better. I think there is a bit of a surge because of the Covid shut-ins. Pokemon and Magic have gotten hot again. But it's not the kind of bubble that will hurt us if it bursts.

Meanwhile, book sales are spectacular--and I include graphic novels, and especially YA graphic novels in that equation. We seem to be getting a lot of newcomers and tourists. It's like we're being discovered all over again.

I don't know. This seems to happen every decade or so. We quietly go about our business and then a bunch of locals finally get word of us for some reason. 

But to get to the point of the above title.

What I seem to be seeing at the store is a huge surge of people coming to Central Oregon. It reminds me of the mid-aughts just before the bubble burst. I don't think this is a bubble--I think this is a population shift of well-to-do folk finding the spot they want to live and having the means to do it. 

This is probably not a revelation--but I think Bend is about to be a very expensive place to live. Based on the number of people in my store who said they were moving here, were planning to move here, want to move here. 

No surprise to people living here, I suppose. But I feel like I have a front row seat at my store.

Upsides versus Downsides.

Marvel Comics is moving their distribution of comics and graphic novels from Diamond Distributors to Penguin Random House, the largest publisher in America. This, after DC Comics decided to move to another, smaller distributor earlier this year.

This is going to have huge repercussions for the comic industry as a whole, which I won't write about now other than to say that this could be very bad for everyone else in the industry since Diamond will now be trying to survive with 70 to 80% of the comic market taken away from them. This would seem very dangerous to the other 20 to 30% of the market--all those innovative but smaller comic publishers.

But my first thought was what I once read about Upsides versus Downsides; Corporations will take huge risks for a possible large payoff on the Upside, if the industry is already close to the bottom of the Downside. (AOL didn't have a lot to lose by joining with Warner Brothers--they were already toast, though Warner Brothers didn't seem to realize that...)

So the downside of this change is that it could destroy the entire comic market. Marvel may not be overly concerned about that: their only concern is whether it will hurt sales of Marvel product. And for that, they may feel it is worth the risk. (Sorry all you small stores and publishers...it's just business.)

My guess is that the Downside doesn't scare them. They could probably stop selling monthly comics tomorrow and still stay pretty strong as a media company.

The Upside is many more (book)stores carrying Marvel comics and a bigger company willing to promote them. (There is also the sneaking suspicion that if the other smaller publishers crash, well...that leaves them on top. I'd submit that being on top of the stinking remains of a burned-out industry is a hollow victory, but "Top of the world, Ma!")

My own experience with such Revolutions in any industry is that it usually doesn't work. That it hurts more than helps. I subscribe more to the "Do no Harm" school of thought. The thing no one tells you about "creative destruction" is that the destruction happens to most of the existing industry to the benefit of a minority of big winners: The Upside.

I've spent years trying to inoculate my business from the vagaries of any one product line. 

In April, 2015, comics were 34% of my overall sales, and graphic novels were 24%, for an overall 58%.

In April, 2021 comics were 13% of my overall sales, and graphic novels were 22%, for an overall 35%.

Sales in my store are also 30% higher overall now, and I don't see graphic novel sales dropping dramatically. So the Downside for me is that comic sales will drop, worst case scenario, by half? That would be only 6.5% of my overall sales, and if that money isn't spent on comics, it probably will be spent somewhere else. 

The biggest change is that the line between books and graphic novels continues to blur in the public's mind. The new "Dog Man: Mothering Heights" book this week would something a smart comic store would carry as well as a smart bookstore. 

I'm fascinated by the choices the big corporations make. For instance, they could have just shored up Diamond Comics, perhaps given them a little more support so they could have Free Shipping, perhaps done something--ANYTHING!--to actually promote comics. 

Instead, they just casually pull the rug out from the entire industry and figure that the other Big Player will do a good job. 

I guess we'll see. I have my doubts that Penguin Random House has any idea what they're getting into.

 It appears the Penguin Random House will soon be distributing Marvel comics.

I doubt they know what they're getting into. I'm going to just sit back and watch as the Comic Book Guy calls and demands a pristine replacement for that obscure $3.99 comic with the random variant cover.

Or not.

Which will mean Comic Book Guy will scream bloody murder. And PRH will look at him quizzically and think, "WTF?"

PRH will look at trying to pick a single comic for 500 comic shops and go, "Why are we doing this?"

So they will ask that Comic Book Guy buy at least 5 copies of said obscure $3.99 comic with variant cover or none at all.

And Comic Book Guy will threaten to bomb PRH with terrible sounding tweets.

And PRH will go, "WTF?"

Oh, this is going to be fun.

Got my first vaccine shot yesterday. Went very smoothly. No symptoms, not even a bruise or soreness. Did some research and basically, I still need to protect myself for two weeks, which I believe is the outside level, so at least a week before any effects. First dose effective anywhere from 58-85% after two weeks. (No certainty in this uncertain world.) Then a full two weeks after the second dose for full immunity. So basically, I'm looking at five weeks of being careful and double masking.

Bubbles again???!!!

It's very satisfying to make predictions and then be proven right. I mean, my predictions are based on long experience.

Sabrina and I talked about how we would need to limit Pokemon sales on the new wave. I wanted to limit to 3, she thought 5 would be better. We settled on 4.

So yesterday she said, "You were right. I've been getting phone calls and drop-in's all day wanting the new Pokemon." Then last night, she said, "Even though we were really late about getting it out, I sold at least $200 worth of Pokemon...and could have sold more."

Fads and bubbles are hard to understand until you have actually experienced them. What most people think of as a fad is a simple increase in demand. But that isn't it.

No, a bubble is a crazy, crazy demand, over-the-top behavior, stuff you can't believe is happening. Once you've experienced one first hand, you can start to recognize the signs. Once you've experienced several of them, you can start to see the patterns. 

There's lots of new speculative behavior taking place right now. Sports cards (which I'm not doing and you would have to shoot me) and Marvel cards and comics and Pokemon are all exhibiting the danger signs. This after about 20 years of not popping up. From an article I read in the New York Times, this kind of speculative fever is happening all over the place and is probably due to people being home and having a little extra time and cash.

I was pretty sure I wouldn't see this behavior again in my career, so I'm a bit surprised. When the sports card bubble was at it's peak, the "old, experienced guy," who owned the trade magazines about cards and coins and stamps told us that when the sports card mania collapsed, it might never come back--for which he used coins and stamps as an example. 

So I'm surprised.

Nevertheless, we have to deal with it. We can't ignore it.  

Economist John Maynard Keynes said, “The stock market can remain irrational longer than you can remain solvent.”

This is true of all bubbles. If we ignore the bubble in comics or Pokemon or anything else that is essential to our business, then our customers will go elsewhere. We may be right about it being "irrational" but that is farther down the road than we can survive. So we have to deal with the reality. 

Basically, the way you handle it is by enforcing allocations, not putting everything out at the same time. Trying to spread the in-demand product out as long and as thin as you can, keeping your regulars happy. You have to be willing to take smaller profit margins by buying from those who have the product for sale at higher than wholesale. You do have to adjust pricing to cool the demand. 

What no one ever understands is that if we raise the price slightly, it isn't to make more money but to slow down the trajectory and to give us enough of a margin to buy more product at higher prices than normal wholesale. Counter-intuitively, even with slightly higher prices we are usually making slightly less profit. (If the differences are too extreme, we let them go.)

The good thing about speculative bubbles isn't the stuff that's super hot, it's the way it helps sales in all the normal product. So it's important to keep people coming in.

A good rule of thumb is: It's better to have the product at a higher price than to not have the product at all. 

We warn people off as much as possible, but we do have to play the game at least long enough to survive until the bubble bursts. 

At the same time, we have to be careful not to get sucked into the dynamic of ordering far more product than we actually need at normal times and then watch the bubble collapse with us holding the bag. 

It's a very tricky process and almost impossible to get through without suffering some damage. 

At least I've been through it before--a bunch of times. The last time this experience was useful was during the housing bubble. I saw it a mile away and spent a full year preparing for the collapse. In the end, I made the right decisions and we weathered the storm without much harm.

So now we get to try to thread the needle again.