Page 2 of 3 < 1 2 3 >
Topic Options
#205505 - 04/12/99 02:27 PM Re: "Demystifying" NextPlanetOver.com
Jeff Zugale Offline
Member

Registered: 12/06/98
Posts: 1806
Loc: Los Angeles, CA, USA
I just want to say that it's great to hear it from the Daves directly. This is the best thing they could have done, coming here and joining us, talking to us directly. Unlike other major players, they're willing to "sit down" and discuss the biz with us on "our turf."

Kudos to the Daves, for being human beings. [img]/resources/ubb/smile.gif[/img]

------------------
Jeff Zugale
Pagan City Comics
www.pagancity.com
_________________________
Jeff Zugale www.jeffzugale.com/
My "Just A Bit Off..." webcomic

Top
#205506 - 04/12/99 07:24 PM Re: "Demystifying" NextPlanetOver.com
Matthew High Offline
Member

Registered: 11/30/98
Posts: 158
I suspect, and this is conjecture, really, you picked the Diamond deal because it is the closest fit to the JIT model. One of the key benefits of have low inventory, is the ability to discount. I find it hard to swallow that NPO, come August, will be not discount everything, at least a modest amount (say 10-20%) with loss leaders upto 30-40% (and still make back costs). Just a guess really.

Heck, don't get me wrong, personally we've found this is the compelling reason people buy stuff online -- price (BooksAMillion certainly thinks so). Followed by comprehensive selection, speed, and service. We discount for this reason, and we figure it offsets the cost of shipping. Also, I don't fear your online store, I rather welcome it. I just find it to be a little bit of double speak to say, "We won't be a discount house" and then discount across the board, don't you?

I am envious of one thing, though, VC. Of course it means headaches, and tons of stupid meetings -- but at least you can devote yourself to the venture full-time. I, personally, can't afford to leave my job. They pay too much... the rotten bastages!

Robert Altomare
GraphicNovels.com

Top
#205507 - 04/12/99 07:40 PM Re: "Demystifying" NextPlanetOver.com
Michael McNeil Offline
Member

Registered: 04/11/99
Posts: 37
Loc: Annapolis, MD USA
> 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 come up with that profit equation because you as a retailer are selling Diamond's inventory and not your own inventory. If NPO will purchase inventory from Diamond, leave it in Diamond's warehouse and then just pay Diamond personel to pick/bag/ship NPO's inventory, pay Diamond for warehouse rental space, etc. then I would accept your definition of NPO being a just another retailer.

As I see it, NPO is more of an exclusive agent of Diamond than Diamond is an exclusive agent of NPO. They have the books to sell, you don't.

Top
#205508 - 04/12/99 08:27 PM Re: "Demystifying" NextPlanetOver.com
Matthew High Offline
Member

Registered: 11/30/98
Posts: 158
Michael,

If your theory was correct, then Amazon.com would easily have classified as a shadow front for Ingram Book Distributor up until the beginning on 98. Drop shipping directly from a distributor is nothing new, it is just that the comic industry is like ten years behind the trend. Selling product that is not on hand based on inventory listings is also nothing new.

Heck, I looked into real estate around the Sparta warehouse myself -- to put together a business plan for a online mainstream comic store (much like something that NPO may become). I could set up an operation in the same or adjacent zip and become a Diamond shadow front as well. Heck, maybe I will!

Robert Altomare
GraphicNovels.com

Top
#205509 - 04/12/99 09:31 PM Re: "Demystifying" NextPlanetOver.com
Michael McNeil Offline
Member

Registered: 04/11/99
Posts: 37
Loc: Annapolis, MD USA
"If your theory was correct, then Amazon.com would easily have classified as a shadow front for Ingram Book Distributor up until the beginning on 98. Drop shipping directly from a distributor is nothing new, it is just that the comic industry is like ten years behind the trend. Selling product that is not on hand based on inventory listings is also nothing new." -- Robert Altomare

That is true, but how do you think that Borders, Barnes & Noble and Books-A-Million would react if Amazon had signed an exclusive two year agreement with Ingram for Ingram to do order fulfillment for Amazon? That is basically what we are talking about here.

Top
#205510 - 04/12/99 11:33 PM Re: "Demystifying" NextPlanetOver.com
NPODaves Offline
Junior Member

Registered: 04/09/99
Posts: 29
Loc: San Francisco, CA
Wow! Between you guys and the Delphi forum, it's a wonder I ever sleep. But I too am all in favor of the dialogue, so here goes:

RICK: I've got to tell you that Dave and I are having the time of our lives building this company, and I'm not going anywhere anytime soon. However, as prudent businessmen, it makes sense to keep our options open on any possible "exit" condition, and as such, I wouldn't rule out any possibilities yet.

TIM: Some of the questions you've asked are dipping into the aspects of our company that I can't get into due to confidentiality restrictions, but I'll answer what I can:

First, Diamond is performing all of our logistics services, and in that respect, we pay Diamond the costs of those services, which includes the costs of their employees performing the pick, pack and ship.

And, we aren't selling advanced orders right away, since our site isn't technologically ready for it. But, for our full launch this summer, we will be selling the entire range of products available.

BARRY: Looking forward to receiving your book! Interesting that you're so close to Sparta, it seems like this may be tricky but we're certainly open to any creative solutions! Send us your book and we'll take a look! I can also tell you that Diamond has left the door open for us to suggest products which we'd like to sell that they don't carry, and so I invite anyone who has a quality small press or self-published book to send us a copy, even if Diamond doesn't sell it today.

JEFF: Thanks for the encouragement! I can tell you that you guys aren't always an easy crowd (and we love you for it!) and it's really been refreshing to have a chance to "clear the fog" to some extent.

ROBERT: Let me be a little clearer on our "discount policy." We are planning to have a standard low discount in our early phases, but by no means will we ever discount to the degree that some of the leading internet retailers do (ie 40% off everything). You are right, retailers in every industry have found that a "loss leader" can be an effective way to get people to make a first purchase. And as a fellow internet retailer ;-), you know that often times getting people to make that first purchase can be the key to getting them to try out more of your products. This will probably be something we explore later in the year, closer towards our full launch.

MICHAEL and ROBERT: You guys are pretty much hitting on the key issues of the relationship with Diamond. And to be honest, I just can't get into many more details than I have on how exactly it works due to confidentiality restrictions. However, I can tell you that the relationship is not very different from what has existed in other industries, and that includes components of exclusivity during the "test phases" of implementation. It isn't easy making the transition to get a system like this up and running, and it was important to make sure that we'd be able to try new things out and make mistakes together.

------------------
The Daves, Co-Founders
NextPlanetOver.com
_________________________
David Reid, Co-Founder
NextPlanetOver.com

Top
#205511 - 04/13/99 12:20 AM Re: "Demystifying" NextPlanetOver.com
Andrew Debly Offline
Member

Registered: 12/15/98
Posts: 244
Loc: Calgary, AB Canada
Forgive me if I'm posing a previously asked question but this thread has covered a lot of ground and I might have missed it.

Traditional retailers' discounts with Diamond is based on advance orders, but NPO just sends along orders
when they are sent in by customers, so how does Diamond determine their
discount?

Top
#205512 - 04/13/99 01:10 AM Re: "Demystifying" NextPlanetOver.com
Matthew High Offline
Member

Registered: 11/30/98
Posts: 158
Andrew,

Diamond has some accounts that don't do advance orders. These "reorder" accounts usually get a 35% to 45% (depending on the publisher) base discount. But this discount can disappear quickly if you have to pay for shipping charges on orders to and from a remote location.

Thus the advantage to being local to a distributor -- no shipping charges (we are actually local to three distributors, and one of the only alternative mainstream distributors -- Fantasy).

Amazon.com cutting an exclusive arrangement with Ingram would have done wonders for Baker and Taylor, Bookpeople, Koen Books, and the larger publishers like Penguin Putnam, Bertlesman or collectives like PGW. Unlike Amazon, Barnes and Noble and Borders were already getting huge distributor-like discounts from publishers directly. Oh, the pleasure of being able to say, "Exclusive! Well, I guess DC will just have to ship my product to me directly and at a 5% better discount."

Of course, the huge up-to-date inventory of Ingram was something of a strength for Amazon.

Robert Altomare
GraphicNovels.com

Top
#205513 - 04/13/99 09:49 AM Re: "Demystifying" NextPlanetOver.com
Rick Veitch Administrator Offline
Member

Registered: 11/23/98
Posts: 3531
Loc: Vermont, USA
ROBERT: Didn't Barnes and Noble just give Amazon.com a huge scare by buying Ingram? It seems that those guys (as well as NPO?) are seeing strategic value in a tight connection between on-line retailer and distributor.

DAVE: Since you've indicated that you guys
*might* be positioning yourselves to go public or sell, does Geppi or Diamond have any kind of edge if you move in that direction?

Also: Can you reveal who the current investors in NPO are?

Also: There is some guy out in the midwest who is being lionized as a sort of internet folk hero since he started his own on-line bookstore to compete with Amazon.com (can't remember his name--Lyman, maybe?). Anyway, Tom Friedman of the NYTimes did a couple of columns on him, holding his tiny operation up as the possible death knell of the Amazon.com model. The guy was working out of his spare bedroom, total start up costs for everything he needed under $2500, and able to discount books lower than Amazon. People were finding him by using the websites that find the lowest prices on products. His sales after the second month were $4000 a week, and with no overhead, he was actually seeing some profit out of that. Could that model also translate to comics? If the internet suddenly was populated by hundreds or even thousands of small retailer web sites playing the discount game, would that threaten NPO?

------------------
Rick Veitch
Invites You To Read THE DAILY RARE BIT FIENDS
updated every day along with news of the world's most popular artform!
THE COMICON.COM DAILY SPLASHis always refreshing!
www.comicon.com/splash
_________________________
More signal. Less noise

Top
#205514 - 04/13/99 12:47 PM Re: "Demystifying" NextPlanetOver.com
Matthew High Offline
Member

Registered: 11/30/98
Posts: 158
Barnes and Noble gave Amazon, Borders, and just about every independent bookstore in the nation a scare when they purchased Ingram's Book Distribution division (leaving behind Ingram Micro). I don't like it -- it is just more consolidation, and consolidation usually means less selection and more rigidity. Its a greater symptom and a nasty drawback of this good economy we are in.

But it is all about JIT Inventory. It is running rampant in all ranges of industries -- no one wants to have product on hand for any length of time. It's not making them money sitting on a shelf. And inventory, in this world of hugely over financed companies, means expense, interest, and more debt. So, companies from Ford to Amazon.com are keeping stuff in stock for as little time as possible.

What do you think the deal is with Gateway and Dell making so much money? How can American companies, paying american workers, beat pacific rim or south american work places? Dell estimates they turn over everything, their entire inventory, every 14 days. They buy what they need and make one of the requirements be that delivery dates on specific, to the day, and that they pay based on terms from the day of delivery.

If you take the same concept to retail, it applies. And when it comes to database driven web sites... well, you don't even need inventory. You just show your distributor's inventory in your database, and sell directly out of their warehouse.

Part of the glue that makes this all happen is the automation of sales, transactions, and inventory systems as well as tracked logisitics. It also doesn't hurt the shipping dollar continue to buy more and more, either.

This process is runnign rampant. Expect to see it in gaming, very very soon. It's already happenned with CDs on a less exclusive level. And Books... well, you know the deal there.

This process, though, works best in an open marketplace. The strangled system we have in comics makes this JIT model threatenning -- far more threatening that it needs to appear.

Especially in a market full of retailers with inventory sitting on shelves.

Robert Altomare
GraphicNovels.com

Top
Page 2 of 3 < 1 2 3 >


Moderator:  Rick Veitch, Steve Conley