A blessing in disguise.

Nothing worse than popping up on another person's website and pointing out how much better you're doing than they are. So I'm going to comment here and hope it doesn't seem out of line.

I just read a long column from a major comic retailer about the costs of doing comic books and how it is becoming unprofitable. In my own case, this isn't hurting me nearly as much. For a very odd reason, which I'll get to later.

First, a little background. Ever since the comic market collapsed in the middle of the 90s, putting about 3/4th of the retailers out of business, the surviving comic shops have been serviced by a single distributor. Diamond has had a monopoly, but their discounts were good enough for most comic shops to do well. The biggest drawback was shipping costs; bad enough that we had to pay for shipping at all (when most other distributors have free shipping above a certain volume), but it appeared to most of us that Diamond was charging more than they needed to for shipping. My suspicion was that the high discounts from Diamond were compensated by extra shipping costs.

There was a lot of grousing about Diamond for other reasons, most of which to me seemed unavoidable. 

Well, the complainers finally got their way, and both DC and Marvel have found new distributors. DC went with a new distributor, Lunar, who is basically the largest online vendor of new comics--in other words, our largest online competitor and a discounter at that. Not something to cheer.

Meanwhile, Marvel went with Penguin Random House, (PRH), the biggest book publisher in the US.

You should know that DC and Marvel account for something like 70% to 80% of the comic market. The unavoidable problems have only gotten worse, in my opinion, but the biggest change are the discount levels. 

Most shops discount levels got lowered. In compensation, we now had the option of getting free shipping for Marvel, and lower cost shipping for DC. 

In my particular case, it was a wash. The free shipping for Marvel covered the discount lost almost exactly. I'm getting the same discount for DC, slightly lower shipping costs.

Meanwhile, Diamond's shipping costs seems to have skyrocketed. The availability of graphic novels is confusingly spread over many different distributors and also suddenly more difficult to find in stock. We can't drop Diamond because they are still the distributor for most comic shops for everything other than Marvel and DC.

The drawback for me was that ordering from PRH is a very complicated and confusing procedure. It seems almost impossible for me to keep track of what, when, and how much I am ordering without spending hours pouring over the accounts. When I did the math, it turned out I was only going to save a couple hundred bucks by going with PRH for our Marvel comics. Frankly, my time and peace of mind were more important to me than that. If there is one thing I've learned in business, it is to keep strict accounting of my costs, both financially and in the way of time and effort.

I decided to continue to order my Marvel comics from Diamond at a much lower discount level. Still not sure that was the right decision, especially if Diamond is unable to survive. But in the meantime, I know exactly what I'm paying and when I need to pay it. So far, it's been worth it. 

Now we're being informed that our discount might even become lower. That will, indeed, force me to order Marvel from PRH.

So we now face a situation where our discounts are less, our shipping from Diamond is even higher than before, and the amount of time and effort required to keep accurate records has skyrocketed. 

Here's the thing. It isn't really hurting me that badly. This is for a strange reason.

See, I've never been able to make a living on comics alone. Bend had never given me sufficient volume of comics sales to keep my business open. From the beginning, I've been forced to diversify in order to survive.

Meanwhile, in bigger cities, comic shops were able to specialize in comics and do well.

The more I diversified, the better the shop did. Now sales are spread over new books, toys, boardgames, card games, comics, and graphic novels. 

New comics are only 10% of my total business right now. I'm not willing to give up on them, even though they take up probably 1/3rd of our space. For one thing, graphic novels sell better because of our comics, though I could probably still sell graphic novels if I was strictly a bookstore.

So my advice to all those comic shops that are currently dealing with the onerous discount levels and shipping and handling costs of comics is to diversify. It'll be hard for many of those shops, especially if they aren't in shopping areas with foot traffic, but it's the safer way to proceed.

I worry for the industry as a whole. I hope it isn't too late.

But Pegasus Books of Bend will do fine; better than fine, our sales are way better than they were only a few years ago. Diversification, especially into new books, has brought in enough money for me to diversify even more; a virtuous cycle that is still paying dividends.

All because I've never had the luxury of being strictly a comic shop. A blessing in disguise.