The Beat covered a lot of the announcements at ComicsPro a few weeks back, but missed one of the biggest news items until now: that Diamond Comics, the major distributor to the direct market, had announced a major reduction in freight costs.
Diamond is reducing UPS freight charges on print material by 20% in April, and will institute an additional 20% off the current rate in July, for a total reduction in UPS freight charges of 40%.
Diamond’s freight charges have been a huge complaint from retailers for years (along with a 3% ‘reorder fee”) and something that Penguin Random House – the distributor of Marvel, IDW and Dark Horse to the DM – covers for free. It’s long been pointed out that until Diamond could compete with that, ordering all kinds of products from PRH made more sense.
I’m told that this announcement at ComicsPRO had a mixed reception among retailers – but our retailer correspondent Brandon Schatz will be along in a bit to explain that. In the meantime, here’s a letter from Diamond founder Steve Geppi that gives some of the background for the move…and some other positioning for Diamond in today’s more competitive distribution landscape.
As you no doubt have heard, after implementing several cost saving measures in both our Home Office and Distribution Centers, Diamond will be reducing UPS freight charges on print material by 20% this April, and an additional 20% off the current rate in July, for a total reduction in UPS freight charges of 40%.
I am very excited to be able to make this adjustment, which we initially announced at the ComicsPRO Annual Meeting in Pittsburgh. As a follow up to it, I wanted to share a little more about Diamond, what we do that no one else does, and how we will be able to implement this change over the coming months.
First, as you know, Diamond does not simply distribute product. Diamond has continually invested in the Direct Market and evolved over our more than 40-year history to ensure we are providing vital services that have been specifically designed to support and grow your business.
And we are the only distributor in our industry that does this.
- PREVIEWSworld PULLBOXthat makes it easy for your customers to pre-order their weekly books and subscriptions directly from you
- ComicSuite POS and ComicSuite Litesoftware offerings that integrate tightly with our ordering and other systems to reduce labor for retailers and allow them to focus more of their efforts on customers
- The monthly PREVIEWS print catalog that essentially serves as the book of record for new and reorder products for the entire industry
- Our network of consumer-focused websiteslike PREVIEWSworld that directly promotes the items you’re selling to eager fans
- Free Comic Book Day organization, promotion, and facilitation to help launch new stories, bring global attention to our industry, and drive new customers into your stores
- Comic Shop Locator Servicethat quickly and easily connects consumers with your store
- The largest selection of comics, graphic novels, and collections along with collecting supplies, clothing, games, cards, collectibles and more from Diamond and the entire Geppi Family Enterprisesnetwork of companies and brands to diversity your store and help you stand out from other stores competing for consumer dollars
- Coordination of support during national disasters and other hardshipsfor affected retailers between Diamond, publishers, and organizations like Binc and the CBLDF
- An onboarding teamto assist new retailers along with a dedicated team of Retailer Services Representativesto answer product questions, research and resolve issues, and provide other support
- Financial support for retailersincluding extended terms or special arrangements to support you during business disruptions
- And many, many others …
Again, I am proud that we are the only distributor re-investing heavily into the Direct Market, as we have for more than 40 years.
However, I have heard your concerns and listened to your feedback. As a result, I have been working closely with my leadership team to explore options to become more competitive on freight, without sacrificing what makes Diamond unique, and I am thrilled we were able to make the announcement we did.
Thanks to the addition of CGA’s consumer-centric business to the GFE enterprise, which increases our shipping volume, we have successfully negotiated more favorable carrier agreements. This allows us to pass along significant savings on UPS shipments of print goods to you. We are also in discussions with other carriers including FedEx and USPS for certain shipments. Additionally, we are consolidating numerous offices while also reducing the size of our home office by 60% this summer and moving to a hoteling system that better aligns with today’s more remote workforce.
And we continue to investigate other ways to implement savings that can be passed along to you. Examples include extensive testing of USPS for shipments under 10lbs. We are finding that shipments arrive as quickly as UPS deliveries with no increase in damages and at a lower cost. We are implementing software and hardware upgrades in our Olive Branch distribution facility to allow us to utilize this ship method where it will reduce costs for retailers.
We also continue to investigate drop point options. Drop points are the most cost-effective way for you to receive product involving lower costs and fewer carrier-related damages. We had hundreds of retailers respond to the survey we sent out at the end of last year and Operations has been working to identify potential routes for additional drop points. Retailers using drop points have been able to opt in and receive their weekly replenishment orders with their weekly shipment of new product if they do not mind the slightly longer delivery time.
While always working to address your feedback, we remain committed to the services and support we have provided the Direct Market for over 40 years. It’s clear the business is changing, and the world is a different place than it was even 3 years ago. What has not changed is Diamond’s commitment to you and how much we value your business. We will continue to evolve and implement changes with the needs of the industry and your business front and center.
As always, thank you for your support and your business.