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#205495 - 04/09/99 11:04 PM "Demystifying"
NPODaves Offline
Junior Member

Registered: 04/09/99
Posts: 29
Loc: San Francisco, CA
Hello everyone,

I’m David Reid, Co-Founder and Chief Operating Officer of My partner Dave Scott and I wanted to take the opportunity to tell you a little more about us and -- most importantly -- to answer some of the questions we’ve seen and heard over the past few weeks about our company. I’m very interested in hearing the questions publishers and retailers have about, and I ask you to let me know by either posting to this forum, e-mailing me directly at, or by simply talking to us at Wondercon next week in Oakland.

I got my start in comics as a huge fan during childhood. My reading lapsed in the years that followed until I got to college, where I rediscovered not only my old favorites like Fantastic Four and Batman, but exciting new titles like Sandman. And after a few more years of avid reading and amassing a collection of more than 10,000 comics, I turned my hobby into a business and opened “Good Guy Comics” in El Paso, Texas, during my Army tour as a Patriot Missile officer at Fort Bliss. I ran my business from 1991 through 1994, but I had to close my doors when I deployed to Korea.

As you can tell by the dates of my business, I’ve seen the best and worst times in recent memory in the industry. I was a retailer during the boom years of X-Men #1, the startup of Image, the skyrocketing of pre-Unity Valiants, and the Death of Superman, and closed my doors during the crash that followed. I won’t pretend to have the same level of experience that many other retailers have, but I do know what it feels like to try to run a comic shop during some of the most dramatic periods of change our industry has faced.

I also understand that many retailers, publishers, and fans alike have felt like the rug has been pulled out from under them more than once when it comes to the comics industry. Like many of you, I have friends who left the industry during the mid-nineties vowing never to return.

But for those of us who stuck it out, I think we’d all agree that most of us are in this business because we love it. We’re passionate about our products, and we’re constantly amazed at the kinds of people we meet. Still, it has been frustrating to watch as comics sales have been disappointing at times over the years even though the product is getting consistently better. I think many of us are afraid that if something isn’t done soon, our industry may disappear altogether. And in many ways, that’s where the vision for was born.

We all know that today there are about 4,000 direct market retailers in the US and Canada, serving a population of about 300 million. That’s one store for every 75,000 people. And every publisher, distributor, and retailer I’ve met has agreed that there just aren’t enough stores around to get the product into the mass market. But in spite of that, if we could simply get the comics in front of people, I know we would find new fans who would love the product as much as we do. was founded with the goal of introducing comic books to the millions of people who don’t have a comic book store in their neighborhood. The Internet has emerged as a medium that has the attention of the world, and has matured to a level in which it is truly feasible to provide a comic book store for people who have never seen one or stepped foot in one. Dave and I saw the potential to finally reach all of those potential customers our industry has struggled for so long to find. So we left our real jobs, and chased the dream of building our own company: one that would allow us to work in the industry we love.

And with that background, I’d like to try and answer some of the questions I’ve seen in the press and in newsgroups over the past few weeks:

1. Like every other retailer in the industry, we buy our products from Diamond. In order to build an Internet retail operation, we knew we needed a third party company to ship our products to our customers. When we started, Dave and I entertained bids from several leading logistics services firms to provide our “pick, pack and ship” services. As we approached Diamond to set up our retailer account, it became clear that they had the capacity to fulfill our orders like the other companies with which we were in contact. Better still, Diamond had the expertise of shipping comics across the country and keeping them in pristine condition, unlike the other firms we were in discussions with who had no experience with our industry, our products, or our customers.

As many of you know, distribution is different from retail in that it is a very low margin business, where pushing more product out the door is the only way to remain profitable. But in order to make such an order fulfillment relationship with Diamond work, we believed it needed to be exclusive to Our company has invested a great deal of money in building the technology required to establish an Internet retail operation, and an exclusive period struck us as the only way to ensure that both Diamond and could “test and learn” the process of Internet commerce. This way, both firms could afford to experiment and make mistakes in a dynamic environment. I can assure you that Diamond is paid a very fair price for their services, and I base that on the bids we received from other logistics firms.

2. Yes, we did give Steve Geppi a small amount of equity in our company as an incentive to make our deal exclusive. However, Steve is not involved in the management of our company, he does not sit on our Board of Directors, and he does not have anything resembling a controlling equity interest in Steve did not invest any money in our company, and in fact 100% of our funding has been provided from backers outside the industry.

3. Milton Griepp has joined as its Chairman. Milton is not an employee of Diamond, nor does he own Diamond’s Sparta warehouse – or any other warehouse for that matter. He has never worked for Diamond. On a related topic, for some reason Plattsburgh has become the grassy knoll for conspiracy theorists in the comic book industry. I can tell you that we first heard the news that Diamond was moving its Sparta accounts to Plattsburgh in the same manner as most of you did: through Diamond’s e-mails to its retail accounts, and later in Internet newsgroups. I can’t speak for Diamond, but I find it extremely unlikely that they moved their Sparta accounts to make room for one brand new retailer.

4. is not commissioning exclusive products from any publishers. The exclusive relationships with Abstract Studio, Adhesive Comics, Oni Press, and Slave Labor Graphics are for content alone. We approached these publishers specifically because we firmly believed that their properties had mass market appeal and thus were among those which would best benefit from aggressive exposure on the Internet. More importantly, we feel that the comics industry will best be served by exposing independent and small-press comics to the mass market, where a larger customer base can be found. Each of these publishers specifically told us that they were not interested in creating exclusive products, since they were not interested in upsetting direct market retailers, and we have tremendous respect for their positions. Unfortunately, people in the comics business tend to react strongly against any use of the word “exclusive,” and perhaps fail to read much beyond that. But keep in mind that our press releases have a much broader audience that the comics trade alone, and by no means were we trying to imply that these publishers were acting against the retail base which has served them loyally over the years.

5. Of course, the “exclusivity” of our agreement with Stan Lee Media has also been misunderstood. is providing the exclusive comic book retail engine for In other words, we are building an online storefront to sell comic books through Stan Lee Media’s web initiatives. It does not mean that Stan Lee Media will sell their products only through Stan Lee Media is free to sell its products through any avenues it wishes. As many of you have pointed out, it would not be sensible for them to refuse to sell products through the direct market which Stan’s work has helped to make successful.

6. Every business tries to make money, and we are no exception. I can tell you that we do have the best interest of the industry at heart, because a vibrant and healthy comics industry only helps to ensure the success of We didn’t build this company to steal customers through deep discounts and drive brick-and-mortar retailers out of business. will not be a discount house. We will discount certain products from time to time to remain competitive, but by and large, we do not plan to make deep discounting a standard policy. In fact, we firmly believe that brick-and-mortar retailers are a necessary part of our industry to serve fans who simply have to get their books the moment they arrive on the shelves, and who crave the person-to-person relationship they have with their retailer.

To that end, is actively pursuing ways to partner with other retailers, and we are already talking with several who share our vision of attracting the mass market consumer to our industry and propelling comic books back to the forefront of pop culture. We have a number of ideas on how partnerships between our company and other retailers might work, but what we are truly interested in are your ideas. We believe there are tremendous opportunities for to couple its Internet presence with the local expertise of existing retailers to provide better service for all comic book customers.

Once again, please feel free to contact me directly at, and I look forward to continuing to answer your questions and exploring how we can work towards growing our industry together.

David Reid

The Daves, Co-Founders
David Reid, Co-Founder

#205496 - 04/10/99 11:23 AM Re: "Demystifying"
Don Markstein Offline

Registered: 11/24/98
Posts: 1202
Loc: Earth
Hey, it's great getting direct communication from you! One thing we all agree on is a desire to SELL MORE COMICS. Hopefully, that can serve as a basis for ongoing dialog. In other words -- stick around!

In the various threads you've posted in, you've invited several independent publishers to send you copies, and see if you can help them get their comics before the public. I'd like to ask, how well are you set up to do that on an individual basis?

Everybody talks about cutting out the middle-man, but of course, the middle-man (e.g., Diamond) serves a useful function -- he consolidates suppliers on one end, and buyers on the other. Thus, the retailer doesn't have to deal with hundreds of small publishers, but simply orders his books from the distributor; and the publisher doesn't have to deal with hundreds of small retailers, but simply solicits his books through the distributor.

So -- are you prepared to go through the offerings of all those separate suppliers, and fill out an order form for each one, thus making it possible for publishers whose output is buried, if present at all, in the Diamond catalog, to get public exposure?

I'm hoping, of course, the answer is yes. Right now, there is a single company with the power to quash any publishing project. If there were two able to give a go-ahead, I'd feel much more secure about our future.

But please be careful about answering. Dealing with so many small companies is a BIG job -- if it weren't, there wouldn't be an economic niche for a company that specializes in it, i.e., the distributor. Don't say you can unless you're sure.

Quack, Don
Today in Toons
Every Day's an Anniversary

#205497 - 04/10/99 06:17 PM Re: "Demystifying"
Matthew High Offline

Registered: 11/30/98
Posts: 158

The big question!

Can't wait to see what the big bucks can do on the internet when it comes to selling comics... so, any word on when the site will launch?

Here's three other (big to small) questions:

I don't know how you can make serious money (read: suspicious) selling product for Diamond's lame 35% (DC/Marvel) to 40% (most others) base reorder discount. This has to be a huge barrier to profitablity. And, even if your marketplace grows, and you either add subscriptions or advance orders or simply can predict sales, isn't it better to have as little inventory as possible and go for JIT?

In this vein, the direct market/Diamond model just doesn't seem to fit a internet retailer -- throw in the periodical nature of single issue comics and the availablity of popular ones, and you have some really big challenges. Do you plan on forcing a change or pushing for restructuring of the direct market practices to allow for greater profitablity with JIT inventory through rolling discounts? Or, do you plan to play it the way regular bricks-and-mortar folks are doing it -- grow subscriptions and advance ordering?

Will small press folks who can't get into the Diamond STAR system because of low sales find a home on the net at NextPlanetOver? Will they be able to deal directly with NPO?

Robert Altomare

#205498 - 04/10/99 06:47 PM Re: "Demystifying"
Tom Peters Offline

Registered: 12/13/98
Posts: 122
Loc: Toledo, OH USA
What does "JIT" stand for?

#205499 - 04/11/99 12:14 PM Re: "Demystifying"
NPODaves Offline
Junior Member

Registered: 04/09/99
Posts: 29
Loc: San Francisco, CA
Hey Guys,

I am not going anywhere and am happy giving you my thoughts about the issues you've raised.

DON: Through our virtual shelf space, we beleive that we can do a great job of marketing indy and small press publishers. But you are right in saying that the difficulty lies in how we get our hands on the products.

As you mentioned, I think the middle man does play an important role at the time being. Simply, they act as an aggregator for this product. At this stage of our life. That role is critical.

So if you are interested in having sell your product, our response differs depending on two states of the world.

IN DIAMONDS INVENTORY: If Diamond already carries your product (even if it is in the deepest, dankest corner of their warehouse) we can market it and sell it. Over the next few days we will set up an e-mail address for sales submissions called "". Please send your promotional material there and if your product is good, we will showcase it. If you want your product reviewed, please send the promotional stuff to "". We will make sure we get it into one of our next e-zine issues. Remember, it had got to be good.

OUT OF DIAMOND'S INVENTORY: If Diamond doesn't carry it, then there is not much we can do in the near future. Right now, we are only buying product through Diamond, although we are working on alternatives in case Diamond doesn't carry the product. One such alternative is Cold Cut. Personally, I think Tim Stroup and Mark Thompson have done a super job of distributing books that Diamond chooses not to carry. They've worked real hard to develop a customer-responsive fulfillment service. And most of all they are real nice guys. I hope to find a way to work with them real soon.

You can also sned uf stuff at:
459 Broadway, 3rd Floor
New York, NY 10013

We would love to see it, one way or the other...

ROBERT: Its good to hear from you. I am a big fan of your sight!

It's not the big bucks that count, its how you spend it. [img]/resources/ubb/smile.gif[/img] The official launch of the site is the first day of Comicon, August 12th. This is when you are going to have access to all has to offer. Before then, however, you will have a chance to get a sneak peak at the site with LIMITED functionality. This chance will be sometime within the next two weeks. I promise to keep you posted.

Regarding the small gross margins, Robert you probably know these troubles as well as anyone. And while we can't give our strategy away, gaining a critical mass of purchasers is going to important. Once you have critical mass, things can change. And you probably know as well as I do that Internet companies never need to post a profit. [img]/resources/ubb/smile.gif[/img]

Your second question is an excellent one more appropriate to a philosophical discussion over a Martini. My partner David Scott has noted a few times that this industry acts differently than others where he has built businesses. Those issues you discuss convey some of the key differences. While we can't predict what will happen in this industry in the future, we do know that this industry like any other, is able to mature, change and improve.

Your last question harkens back to Don's questions. While we are pondering ways to make this happen, we are receptive to your thoughts.

TOM: JIT means "Just in Time". Basically the concept is that I can get my hands on the inventory I know I am going to sell "just in time" before I sell it. This way, companies are not sitting on inventory waiting for it to be sold. This other method is what we call "Just in Case".

Keep the questions coming and see you at Wondercon!!

David Reid

The Daves, Co-Founders
David Reid, Co-Founder

#205500 - 04/11/99 09:24 PM Re: "Demystifying"
Michael McNeil Offline

Registered: 04/11/99
Posts: 37
Loc: Annapolis, MD USA
As a small press comic book publisher, (Finder) the problem that I have with Diamond
doing order fufillment for NPO is not that Diamond will now become a defacto internet
retailer. (The fact that they are contracted to do it exclusively for NPO is
irrelevant.) It is the fact that they will continue to expect their traditional
distributor discount of 65% at Net 30. Retailers, no matter who you are, should
get a retailer's discount.

Diamond is taking the current distribution model of:

publisher -> Diamond Distribution -> retailer -> customer

and attempting to cut out the retailer and pocket the retailer's profit.

publisher -> Diamond/NPO -> customer

If I were a retailer, I would be greatly concerned over this movement in the
comics market. But given the internet, the consolidation of this market and migration
to this new distribution model is inevitable. Now the question is what do I,
as a publisher, do about it?

Also, it will be fairly easy to see how well my book is selling through
NPO. Just check the amount of orders for the Sparta location.

"And you probably know as well as I do that Internet companies never need to post a profit." -- David Reid


Thank you for planting the seed of a wonderful idea.


Form a non-profit organization devoted to the promotion and distribution of
independent comics. Change the distribution model to:

publisher -> non-profit org -> customer


publisher -> non-profit org -> retailer -> customer

I hear by offer up the domain name for such use.

This non-profit organization would set up its own web store where it would sell
independently published comics and independent comics related material, both to
individual consumers and to retailers with appropriate retailer discounts.

The non-profit should also be able to accept consignments from independent publishers.
Publishers would be paid quarterly for any of their issues that are sold.
Initially publishers can be paid a higher percentage of the cover price than
the current distribution model. A certain, agreed upon percentage will go to
defray the cost of the web site, needed employees, warehouse space rental, etc.

This organization will be NON-PROFIT. Any proceeds will go to defray the cost of
the web store, and or the distribution of books. If sales start to really
grow and the amount of proceeds generated greatly exceed the costs, the discount
paid to publishers will be raised, in order to pass any increased proceeds onto
the publishers.

I do not pretend to have all of the pieces to this puzzle. I do not intend to hurt
retailers in proposing this non-profit organizaion. They have to eat too and nothing
would please me more than giving retailers another distribution option.

I am, however, proposing changing the distribution model for independent comics.
If Diamond/NPO wants to carry FINDER, sure I'll sell it to them, at a retailer's
discount. (though it might be slightly cheaper at my web site since I am the publisher. :-) )

If you don't like the way the game is played, change the rules. That or get out
of the business. So I say we change the rules. Especially if we, as independent
publishers control the non-profit organization. That way we can insure its fairness to all concerned.

Michael McNeil
Lightspeed Press
Publisher of Finder

#205501 - 04/12/99 01:27 AM Re: "Demystifying"
NPODaves Offline
Junior Member

Registered: 04/09/99
Posts: 29
Loc: San Francisco, CA
MICHAEL: Interesting idea! However, let me see if you can explain one thing to me. Where are you getting the data for this profit equation:

publisher -> Diamond/NPO -> customer

I can assure you that Diamond is not cutting out my profit as a retailer. Yes, does pay a fee for our order fulfillment services from Diamond, but that's where it ends. As you mentioned, retailers need to eat, and we're a retailer too!

And yes, as I've said before, we really are a separate company from Diamond. We're not Steve Geppi's puppet retailer, set up so Diamond can be in retail without letting anyone know about it. I promise you that will see soon enough that we are our own company, and we think you'll be pleased with the results.
David Reid, Co-Founder

#205502 - 04/12/99 07:30 AM Re: "Demystifying"
Rick Veitch Administrator Offline

Registered: 11/23/98
Posts: 3531
Loc: Vermont, USA
Dave said: " And you probably know as well as I dothat Internet companies never need to post a profit."

I know this was a joke, but considering the nature of the internet economy, it begs the question: Is the ultimate goal to either sell NPO or take it public?

Rick Veitch
updated every day along with news of the world's most popular artform!
THE COMICON.COM DAILY SPLASHis always refreshing!
More signal. Less noise

#205503 - 04/12/99 01:27 PM Re: "Demystifying"
Tim Gagne Offline

Registered: 11/23/98
Posts: 433
Loc: Chicago, IL USA
NIce of you to offer up replies and answer questions. Since your willing, here are a few-

Do you have to pay for shipping to Sparta of the books since theree are few accounts actually being serviced from Sparta, or is this part of the fufillment agreement?

You will obviously need codes and a receiving dept. Will these be comprised of Diamond codes and employees or NPO's?

I'm not sure if I understood correctly, but it seemed like you were not taking pre-orders? Are you basicaly helping the industry liquidate backstock?

I also got the gist that you were not dealing with ordering direct. How can you buy independents and things from Diamond when the majority of people in these areas would offer you the same deal Diamond gets? A huge profit loss/gain to you.

I wish you luck and look forward to getting a better idea of what you are trying to do. Your mention of accounts moving from Sparta to Plattsburgh is a good one. Diamond is able to process books a full 24 hrs. earlier, which should hopefully allow accounts to still receive them on time. It seems like you understand that everyone is concerned about losing their little slice of the pie, but with Diamond (its more than just Geppi you have to worry about) less than forthcoming with information, it is nice to hear something.
There really are so many secrets and people keeping them when it should all be put out in the open. There is no reason Diamond could not come out and explain its moves to its customers. They could really use another PR firm (as could the majority of companies in this "industry") so it at least looks different from the same palbum that has been served people for the last 5 or ten years. But that is a whole other can of worms....

#205504 - 04/12/99 01:35 PM Re: "Demystifying"
Barry Buchanan Offline

Registered: 12/03/98
Posts: 368
Loc: Carmi, IL USA
OUT OF DIAMOND'S INVENTORY: If Diamond doesn't carry it, then there is not much we can do in the near future. Right now, we are only buying product through Diamond, although we are working on alternatives in case Diamond doesn't carry the product.

It seems you've got the right idea of pushing comics on the "outside" world and from your posts you've obviously got the the love for comics as well. I too love comics. So much that I self-publish one. It's called "THE BALLAD OF UTOPIA" and Diamond doesn't carry it. I will be sending NPO copies to look over. Hell, if you're a comic fan I want you to read it. It will be offered by Cold Cut, but let me get to my point:
I live maybe an hour and a half from Sparta, Il. If you should decide to carry the "THE BALLAD OF UTOPIA" I could personally drive however many copies (even one copy) you order to the warehouse. If someone ordered my book through you it could be there in under two hours after a quick email or phone call.

A few things about carrying only what Diamond carries: 1) Diamond let's a panel of a retailers look over new submissions. If they think they can sell this comic IN THEIR STORES they'll give Diamond the okay. Now, these are stores that cater to people WHO ALREADY BUY COMICS. The way things are now most retailers won't take a chance on a b/w indy when they know what their customers like and will buy. I've also discovered that retailers don't like wading through all the pages of Previews. So this to is a factor in Diamond keeping people out. Diamond also drops a book if it doesn't make $900 -$1,000
after four, or so, issues. If you factor all of these things together you are going to shoot your company and your "crusade" in the foot. If you're really after the "outside" world getting into comics you can write off the first 200 pages of Previews. Now, I think with the immense space you have with NPO you could offer a lot of things that Diamond doesn't. And hopefully you will.
I'm glad to see you taking the time to get into all of this with us fine folk of

Barry "the ayatolla of plugola" Buchanan
"The old west ain't what it used to be."

[This message has been edited by Barry Buchanan (edited 05-07-99).]
WESTERN GOTHIC:The Ballad of Utopia graphic dime novel
coming soon from Antimatter-Hoffman Intl.!!!!

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