Jim:

I'm definitely with you. Remember, I said you were one of the few, the brave, etc.

And no, I don't have any hard proof, and yes, it runs against common sense that retailers would use money that they were spending buying FRENCH ICE (MOEBIUS, etc.) to buy bat-sneakers instead, but I sincerely believe that most (not all) did.

Nothing else would explain the drop in orders.

There is a point I made before which has not (IMHO) evoked enough attention.

Credit. Or rather lack thereof.

There's nothing wrong in buying tons of bat-crap or hologram covers or X-MEN #1s if you know you have a market for it. In and out quickly; take the money and run. If you have estimated the size of that market, go for it!

What you don't do, however, is cut the orders of raviolis because Coke is doing a special promotion.

What you do do, is use your credit line to boost your orders of Coke during the time of the special promotion, and leave raviolis well alone.

That's how things run in the real world out there.

That is not how the comics industry ran.

One factor I never saw mentioned anywhere in the various autopsies of our industry is the lack of credit.

If instead of working with a more or less zero-sum cash flow system, the retailers had been able to use credit, things would be vastly differewnt today.

IMHO.

JM

Jim said:"Last night I took Alex Simmons down to the basement to show him why no one had been able to find the copies of Blackjack that had been inadvertently sent down there. He was not the first to compare it to the warehouse from the end of Raiders of the Lost Ark. And as I've often pointed out to people when holding up a pile of left-over comics, these all used to be dollars."


Well, Jim, that's your fault for not having proper inventory control. If any retailer in any business has old stock piled up in the basement then it's not the industry in general which is at fault, it's the person who's making the ordering and marketing decisions. I've worked retail for years and it doesn't matter if you're running a clothing store or a book store, the fundamentals are the same: all products have a limited shelf life and you have to move your stock (all of your stock) out of the store by any means necessary (whether selling at cover price or markdowns or giving some away in hopes of generating customer goodwill). All of the old stock has to be rotated out to make room for the new.

Since there is no back issue market for comics of the past twenty years, there is no reason to hold onto them as stock. This is what I'm trying to convice my local retailer (to no avail). He hangs onto his ever growing pile of old comics because he insists on selling them at cover price or at a very minor discount.

Old comics (primarily Marvel and DC comics) are like clothing that's gone out of style. Get rid of them once they get more than a year old (or sooner). One retailer here had over 100,000 comics in storage because he thought he couldn't sell them. Really? I bet he could sell them for a quarter a piece. In any event, he went bankrupt and the creditors sold them for (take a guess) a quarter each (because they didn't understand a thing about the collectibility of comics (which worked to their advantage (they wouldn't have made a cent if they tried to sell all of it at regular price (which is why the retailer went bankrupt in the first place)))) and made a very good chunk of change.

All of the comics sold.

All of them.

100,000 comics an a town of 45,000 people.

What took me by surprise was that people from all walks of life were in the store looking for comics to buy: grandmothers, very young children, white collar workers (ie. suits), blue collar workers, everybody you could think of were there looking for comics to buy. I had never seen these people in the store when it was operational. Only when the store's stock was being liquidated.

I think the future of the industry lies in the graphic novel anyway. Comic books (aside from the obvious golden age ones) have no back issue market to speak of and they are too expensive to attract new readers. The graphic novel is a self contained story (the trade paperback would have at least a good chunk of a story arc) and is more satisfying to read.

Finally, since trades and GN's are far more durable than comics, you can set up a system like used books: accept trade ins at 30% credit and sell them at 70% of the cover price. Continue to do that until the volumes become too beat up to circulate them anymore and then sell them off on a (non-returnable basis) for a buck or two each. Imagine selling a beat up old MAUS for a buck to someone off the street? It's made you money several times over, it's been read by several customers (as opposed to only one) and finally you cash it out of your system for a nominal fee and make it very easy for a non comic book reader to get into reading comics.

The latest issue of THE COMICS RETAILER has plenty more advice on inventory management. It is priceless.

Dear JM:

Regarding credit, you have hit upon an area of great interest to me. I agree wholeheartedly that the lack of credit is the major stumbling block for comics retailers. The thing is: I can't blame a banker for not wanting to lend out money to a comics retail operation. There is just not enough upside potential to balance the downside risk.

The traditional source for financing for small retail businesses is supplier credit. In the comics business, that's always been exceedingly hard to get.

When Phil Seuling sent out his first monthly mailing in 1973, the terms were simple: pay cash with order. COD was not available, much less billing terms. If you didn't have enough money to pay in advance, you couldn't order comics.

Now that was understandable given the fact that DC and Warren held Phil to that same standard. (Marvel was a late-comer to the Direct Sales party.) As time went on and Phil's monopoly was broken, the offering of credit gradually became an option for distributors. This was especially true after Marvel & DC began to offer credit terms to the distributors, but there was an additional problem.

Who would trust a comics dealer to pay a bill? Comics dealers were (are?) classic cash-business operators. (I hesitate to use the term entrepreneurs.) They paid all their bills in cash (small bills), reported little or no income, and disappeared on a moment's notice. There was even a comics distributor account of Marvel's who used to show up at the office every Wednesday with a brown paper shopping bag of money. After they counted up these piles of small bills they'd release his books for the week.

Chuck Rozanski has taken credit for working with Jim Shooter to get Marvel to begin offering credit terms to distributors in the hope (Marvel's) that the distributors would pass along these terms to retailers.

Of course, that was still a considerable risk for the distributors who were left holding the bag when a retailer couldn't or wouldn't pay. The distributors who were the most aggressive in offering credit terms (i.e.: Glenwood) were the first to sink when creditors went south.

Most distributors started instituting graduated credit terms to their customers in the early 80's. They were intentionally difficult to get and were withdrawn at the first hint of difficulty.

Now this is a good way to minimize risk, but a bad way to maximize growth. Oh, and it's also a way to increase profitability for a distributor.

When a distributor gets credit terms from a publisher he can invest that money for the period between payment from his customers and the due date to the publisher. The interest that accrues is a bonus over and above his nominal profit margin.

So, given the choice of risking the money with shaky (or unscrupulous) retailers and banking it which would you choose?

That leaves the problem of growing your business. Well maybe you could put your competitors out of business by taking away their largest suppliers?

I wish I could participate in this discussion, but unfortunately this is probably my last message in this particular thread.

Comicon.com simply makes it too difficult for me to post a message. When I clicked on this thread to read the messages, it took my computer 3 1/2 minutes to display the page of messages. When I click on the "Post Message" button, it downloads and displays the entire discussion thread...again.

Comicon.com's reading and posting interfaces really stink. To view a discussion thread, you have to download the ENTIRE discussion, whether it's just one message at 10K, or (like this one) dozens of messages at a quarter of a Meg.

I really hate jumping through hoops to read messages or post something. I hope the folks at Comicon.com can fix this before they lost more people to monster-threads that take a eternity download.

Anyway, JM's sales figures are interesting, but are missing one point - they represent preorder sales to stores, not actual sales to readers. Part of the problem with some of the less-well-run distributors of the past is that they would grossly overorder various comics in anticipation of heavy reorder activity - and get stuck with tons of comics, both good and bad. For some titles, this can add thousands of "phantom sales" to their preorders that don't reflect the actual readership. I can remember touring the Cap City warehouse in 1995 or so, walking past pallet after pallet of various Valiant and Defiant comics, still untouched, shrink-wrapped to the skid.

And then, of course, there were the retailers, who would overorder for the "next big thing" and get stuck with boxes of books from Triumphant or Image.

Today, most retailers are inclined to order very closely to their actual sales (very little for the backstock if at all - many retailers are eliminating the rows of longboxes in their stores). And distributors (er, distributor - Diamond) do the same - usually only overordering by 1-5% for future reorders - if even that.

Today's comic book sales, in my honest opinion, very closely reflect the actual readership with very little room to spare. (In fact, I think preorders dipped below the actual readership level in Spring of last year, which is why sales on most books "bounced" upwards by several percent through summer/fall of 1998 - sort of a "dead-man's-bounce".)

I'll be happy to read any replies, but I don't think I will be able to respond, because of the aforementioned anti-user interface of comicon.com. Sorry!

Best,
- Matthew High

What he said.

Seriously, Matt brings up another good point about where those sales went. Neither Matt nor I are about to suggest that ANYONE ordered an extra case much less a skid of FRENCH ICE. On the other hand, I can imagine a scenario where the various warehouses (50 or more?) rounded the orders they received to the next higher order increment in the hope or expectation of using the extra copies to fill reorders. As time passed and these extras piled up, they chose to round down and fill the shortages from a central supply (or for the small distributors let the shortage go unfilled.)

I should point out that I have no idea what (if any) order increments that Renegade had in effect. This is just another brick in the wall of my argument that I doubt that stores deliberately turned away sales by underordering.

BTW, I have little experience with this type of BBS, so I can't say if Matt's complaints about the interface reflect a valid comparison with others. I do know that I've often wished that I could just check new messages.

And Rick, I'm not ignoring your comments. I'm just trying to get back to the piece that I started about these things a while back. It's just that each new post brings up something new to ponder.

Jim "I've got too much on my plate" Hanley

Matt, Jim... As far as FRENCH ICE and MOEBIUS were concerned, I have plenty of anecdotical evidence to state that stores were indeed underordering on these to make room for other stuff, and in effect missing on sales.

-- comments like "I could have sold 20 but I could only afford to order six";

-- copies coming in on Thursday and being entirely sold out by Sunday night (what happened to the concept of having a book on display for a month?)

-- copies only ordered for the customers "subscribing" to them, plus three for the staff of the store, who loved the book, and none left to actually be put on display. This happened a lot with FRENCH ICE. It was then followed by the "intelligent"remark, "Whew! I'm not stuck with them."

-- a steady number of folks complaining they couldn't find the books at their stores & switching to ordering them from BUD PLANT or myself.

In fact, Bud's mail order of MOEBIUS books slowly went up as the Stores' market went down. There are no boxes of unsold MOEBIUS or FRENCH ICE books anywhere that I know of. (I'd gladly buy a box of INCALs if anyone had one.)

Every year at San Diego I've done a brisk business selling Moebius books to folks who constantly tell me / told me they couldn't find them in stores.

So I don't think it was rounding up or down or adjusting orders to actual customers.

As Rick Veitch said in an earlier message, "A big summer superhero 'event' was a guarantee your sales would take a hit, even in the best of times."

It was cannibalizing existing sales of MOEBIUS and FRENCH ICE to the benefit of superhero crap.

JM

Matt,
We hear you on the download problem! I've forwarded your comments to Steve Conley (who is the html brains of the outfit) to see if he he has any ideas.

Couple things worth mentioning: there seems to be some sort of server slowdown on the con this morning (Monday). It was running like a banshee all weekend at 6 or 7k, but now I'm getting turtle like speeds of 450 bytes. Dunno what is causing it (although our traffic has been growing like crazy), but we'll be looking into it.
Also, when you get the 'post reply' form, you can usually start writing your post in the boxes while the thread loads. Sometimes it pays to go back and check your user name and password though.
I should remind everyone, as well, that the big reason we have longer download times is because so much is being discussed! Folks who are concerned about the 'comic book malaise' on some of the threads must not be lurking or participating in beauts like these!

------------------
Rick Veitch
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