Home Retailing & Marketing The merchant class

The merchant class


While the comics medium advances in prestige and material success both in fairly dramatic leaps and encouraging steps , physically moving things around and getting people to reach into their pants pockets, find money and hand it to someone else in exchange for a comic remain the most problematic areas of the business. While the webcomics model does away with all messy papers and trucks and roads for moving things, not everyone is ready to embrace the electronic wonderland. Not everyone will. Or should.

And so we are left with brick and mortar comics shops and bookstores and all the wonders and blunders associated with the same. They are the merchant class. They are not the dreamers and poets. They aren’t the well-coifed actors or the heroic warriors. They’re just the men and women who make money selling us things we want and need. And they have their own wants and needs. Because they deal with numbers all day, these wants and needs are exhaustingly technical and incremental for a non-number cruncher such as myself.
By cosmic coincidence, while Tom Spurgeon was writing his essay on why comics shops matter, I spent two days eating breakfast, lunch, and dinner with a few hundred of the most enlightened members of the merchant class. While I would be cold-hearted and callous not to say that Tom’s essay was idealistic, heart-felt and included a lot of common sense, it was also, to my mind, almost hopelessly idealistic.

I don’t think anyone is attacking the GOOD COMICS SHOPS. It’s the crappy ones which are being pilloried. The problem of course, is what’s the difference between good and crappy, and THAT is where the discourse must lie.

Chatting with people at this year’s Diamond Retailer Summit, you would hear even other retailers dissing the Bad Comics Shops. I hope Tom maintains his idealism, because even he might have been a little annoyed by the summit attendee who put Garth Ennis Baltimore Retailer Summit M&Ms on eBay. Or after listening to Tuesday morning breakfast Q&A session.

This open mike allowed retailers to ask questions of three of Diamond’s most powerful burghers: VP of Operations Cindy Fournier, VP of Sales and Marketing Roger Fletcher and VP of Purchasing Bill Schanes. What searing questions did these folks have to ask? Most of the questions involved shipping — comics with bent corners. can’t they make the boxes stronger? Material needs indeed. One fellow complained that the inventory slips in his packages were at the bottom of the box instead of the top making it difficult — DIFFICULT I SAY! — for him to keep track of what was in the box. There were what I was made to understand were perrennial questions, along the lines of “Why can’t we get our Marvel Legends at the same time as Toys R us?” apparently a question that has been asked so many times its now a (coffee) drinking game.

Even among the retailers at the summit, a distressing number are fans and not really merchants. Spend a little time among the merchant class and this becomes clear. Even if it wasn’t the swarms of Diamond accounts who brought along wives and kids and employees to get as many of the retailer exclusives as possible. (Last year reached a nadir when one of the attendees actually STOLE an item meant for a charity auction.) At Monday’s dinner presentation, DC gave away a Booster Gold variant with a black and white cover. Within about an hour, there were 18 copies for sale on eBay.

Which isn’t to say that there aren’t many many good retailers — they are as distressed by the behavior of the bad ones as anyone, and organizations like ComixPRO exist to separate the wheat from the chaff. At the breakfast Q&A there were good questions asked, too, and I personally had a number of fabulous comversations with smart, commited people who care about the medium and their bottom line.

One retailer asked about discounts, which raised the much-rumoured elimination of Diamond’ reorder penalty. (Basically, in order to encourage as many upfront orders as possible, Diamond lowers its discount on reorders of even such things as graphic novels, leading retailers to increasingly reorder through Baker & Taylor.) While this change wasn’t announced, per se, Schanes hinted strongly that it is coming, although he warned equally strongly that some other services would have to be eliminated in order to balance the sheets on this.

The move is one that is necessary in the changing landscape. I wanted to go to the summit because it’s clear that “it feels like a very cuspy time” as one attendee put it. If there’s one thing the recent posting explosion here showed me it’s that people don’t really know what’s going on or how to capitalize on emerging markets for comics. While Tom writes quite accurately of this macro:

The two biggest problems facing the Direct Market have little to do with some notion of quality and a failure of will from certain shops to achieve this, but instead 1) that the system does not do enough to encourage and support the best models for sustained success, and 2) the system does not do enough to keep itself from being manipulated and exploited for the sake of gains different than or even opposed to sustained, long-term success.

The micro is that retailers are overjoyed that Diamond now lists the first volume of Sandman as Sandman Vol. 01: Preludes and Nocturnes and not Sandman Vol. 1: Preludes and Nocturnes. It’s a world of microns and 1% incrementals.

I’m going to get into some more news bits and observations from the summit in a bit but first a few more reactions. Stuart Moore has his own thoughts:

I’d add a couple notes to the “scheduling” section. This issue tends to get heated very fast because it’s actually two very different problems with related, self-reinforcing reactions. Fans hate late comics because, well, they want their comics, and because many of them grow to adulthood with the gradual realization that institutions they’ve trusted (parents, Presidents of the United States, DC and Marvel) aren’t perfect and, in fact, sometimes do bad things. Late books are a very simple proof of a broken contract. And because the draconian newsstand distribution system of the ’70s and prior made late titles almost unheard of, their current presence is evidence of a Decline in Overall Professionalism. (Which it’s not, really. It’s just that when Gil Kane or Neal Adams was late, the company would slap in a fill-in or a reprint.)

Simon Jones chimes in:

Which leads us to the question: how do we properly inform retailers? This gives me a segue into Tom Spurgeon’s excellent post that touches on the very topic of getting information to publishers, or the lack thereof in the direct market. Diamond doesn’t provide any retailer information to publishers, unless publishers pay a fee. Even then, the process isn’t very easy. We don’t know who out of the 3500 retailers out there are buying a lot of our products, who buy a little bit (so there’s room to improve sales), and who refuse to sell adult publications at all… and this is a particular problem for us. It’s really bad form to cold-call retailers to sell porn.

And Panel and Pixel devotes an entire thread to discussion.
And while I’m at it, while I’m pleased that Dirk gives me credit for “breaking” the Diamond POS system, Brian Hibbs has been blogging about his POS system for months, and mentioned it back in July, and it’s been a hot topic of discussion among most business people in my bubble since BEA. As Cheif Wiggum put it so eloquently in THE SIMPSONS movie. “I thought it was a body, too, until he said yard trimmings, Ya gotta learn to LISTEN.”

We’ll be back with some more observations as we type up our notes. But the overwhelming feeling we came away with was excitement and enthusiasm for all the great things that are now becoming possible, and the arrival of even more smart and dedicated merchants who are business people and not just fans — of any genre. Historically the comics medium/industry is a medium/industry of creative geniuses and business…strugglers. It’s been a double edged sword: there has rarely been enough money involved to draw in actual business visionaries. But this same lack of pressure has left creative people free to create unfettered by commerce. But at some point people need to be able to eat off their talent, and finding the balance that allows that without a wholesale selling out is the cusp we now find ourselves at.

  1. The CUSP is this: comicbook stores are specialty bookstores. Some are starting to use trade distribution effectively to make money and expand their customer base. One retailer I spoke with worked with a local book distributor to sell over 100 copies of Harry Potter AT FULL PRICE. He also set up a display of other fantasy books to help people with their postpotterdepression. The books are returnable, he has the possibility of another revenue stream, and his customers are happy.
    At some point, Diamond will have to offer returnability on trades, perhaps at a lower discount. Barnes & Noble uses more than one distributor, so why shouldn’t comicbook stores?

  2. Can I ask a sorta devil’s advocate-y kind of question here, just to be provocative?

    With regard to this:

    > At Monday’s dinner presentation, DC gave away a Booster Gold
    > variant with a black and white cover. Within about an hour, there
    > were 18 copies for sale on eBay.

    I guess my question is this:

    What’s wrong with that?

    Don’t get me wrong. Some of the other behaviors described as coming from retailers at the summit (and other similar events) are very disturbing, even horrifying. Stealing something from a charity auction. The heedless smash-and-grab stampede. Finnagling a way to get more freebies than is your share. That’s all bad, no doubt.

    And I understand how, for example, artists feel when they’re at a convention and somebody asks for a sketch or a autograph, and then see that item listed on eBay. In those situations, the artist may well feel exploited, but that’s not exactly what’s going on here, right? These exhibitors are giving cool trinkets to retailers, right? And they know that these guys are retailers, right? So you gotta expect that they’re gonna sell those trinkets, right?

    Sure, it’s a little weird that digital cameras and wireless internet connections mean that eBay sales of this stuff can start moments after the stuff is doled out. (And some of it is kinda ridiculous, but if anyone can find a buyer for custom printed m&ms, more power to ’em.) And of course, none of this is worth hurting anyone else for. But, assuming that a retailer gets his/her something fairly, what’s wrong with a retailer selling that some something? Why would you expect anything else?

  3. Tommy, it’s not the fact that these retailers are turning around and selling swag from the retailer summit that I find fault with. It’s the fact that instead of selling the items in their brick and mortar shops, they are putting the stuff on eBay. Why don’t they put the items in their own shops and allow there regular customers to buy the stuff? Why rush to put the stuff on eBay?

    Maybe just maybe one of their customers would like to buy some of the freebees they got from the show. They ought to at least try to sell it themselves. That is what they do. They sell comic books.

  4. I understand what you’re saying here, but just to continue devil’s advocate-ing:

    > It’s the fact that instead of selling the items in their brick
    > and mortar shops, they are putting the stuff on eBay. Why
    > don’t they put the items in their own shops and allow there
    > regular customers to buy the stuff? Why rush to put the stuff
    > on eBay?

    I understand that one wants to think that a store treats its customers fairly, but just because a store chooses to sell its stuff on eBay can’t really be taken as an indicator that they don’t. Plenty of stores (of all kinds) have eBay components. And maybe the store has a standing policy of aucitoning variants and rarities online where (theoretically) everyone–regular customers and more–have a shot at them. Maybe the store knows it doesn’t have a regular customer for the thing (say, it’s an RPG store that managed to pick up an anime toy premium) and it might as well sell it online.

    I understand what you’re saying. Surely plenty of “bad” retailers sell stuff on eBay. But just because a store sells on eBay can’t really be automatically taken as proof that a reatiler is “bad”, can it?

    > I think the problem is it suggests an attitude among
    > retailers of focus on making the quick bucks and short-term,
    > rather than long-term, gains.

    OK. This I get. But I do think there’s probably better anecdotal evidence of this sort of retailer short-sightedness–or a more precise way of putting it–than just the fact that a retailer’s selling the swag it picks up at a show.

    For example, you could make the case that if a retailer is prioritizing getting the immediately salable swag over attending useful and insightful programming or choses to sell material intended to be useful and educational to the retailer (as Hal Kinney reported in his comments at http://www.icv2.com/articles/talkback/11276.html ), then that’d seem to be a better way to bemoan retailer short-sightedness than just to lament that a retailer is, well, retailing.

    I know I’m picking nits here. But, as Heidi says, no one is criticizing the good stores and the bad stores should be criticized, so I think it’s important that the criticism of bad stores be as precise & fair as it can be.

    Here’s to the merchant class!

  5. I think we need better businesspeople running comic book stores. We don’t have enough of those. It is why I won’t go into the comic book or anime store business. There isn’t enough money in them to feed a family even though I could see myself enjoying work.

  6. Hey everyone,
    I was one of the retailers Heidi talked to this past weekend in Baltimore at length. Maybe a bit too much for her liking, but she was a good sport about it. Her analysis is very even-handed and reasonable. As someone who considers my shops to be of the quality variety, what she is discussing is dead on, but it is changing, and improving. These things take time. In the meantime, we’re all best served, as merchants, artists, and art afficianados (or simply retailers, creators, and fans), if the fans let us retailers know what they don’t like about us on an individual basis, at a reasonable level.

    Thanks for sharing your insight Heidi, it is much appreciated by those of us (as I say) fighting the good fight.

  7. Me again… how many comicbook stores are members of the ABA? How many retailers have attended at least one BookExpo? How many are listed in the yellow pages under “bookstores”?

    For at least two years, graphic novels have outsold comicbooks. GNs produce more dollars per square foot. They stay in print longer. How many stores sell more GNs than comicbooks?

  8. Power tools produce more dollars per square foot than bananas. How many grocery stores sell power tools?

    Er, point being: There’s no reason for comic shops to follow the same sales patterns as bookstores. If they did, they’d be superfluous. Periodical comics obviously aren’t designed for bookstore sale, but they still do well in comic stores. The (absolutely laudable) growth of graphic novel sales doesn’t have to cut into single-issue sales…and according to the past few years’ Diamond figures, it doesn’t seem to be.

    Totally agree re comic shops’ use of multiple distributors, by the way.

  9. When the retailers can return unsold comics, then they will take more risks and actually stock brick and mortar physical real comics in their stores.

    Until then, I as a customer will continue to see examples such as: Buying the One (1) copy of Daredevil 100 on the shelf on comic release day, as I did this week.

    Why is the retailer being forced to inherit all the risk in this system?

  10. Much is made about the pro’s and con’s of the direct market, the quasi-monopoly of Diamond as uber-distributor, and the plague of crummy retailers. I’m not sure that any of these problems are in any way unique to the comics market. A crappy comics dealer is no different than a crappy records dealer, is no different than a shifty pet store owner. I’ve walked into more than my share of bad comics stores, with surly, filthy employees and a suspicious pee smell, BUT I’ve also been driven into micro-rages by the behavior of staff inside “book” stores. The prevailing wisdom seems to be that we as comics retailers should aspire to become Borders, but I disagree completely.

    Comics retailers are specialty bookstore merchants, period. Until comics truly becomes Big Business, which I can assure you it is not currently, we will continue to be specialty bookstore merchants. And when it does become Big Business, one of us will grow to giant proportions and become the Borders of the erstwhile direct market; or more likely, Borders will just buy Diamond and that will be that.

    In the meantime, our business is ruled by the numbers that seem so trifling to Heidi. Besides figuring out how to seem more bookstore-y, comport ourselves as ladies and gentlemen of culture, and capitalize on all the trends that we are constantly accused of ignoring, we are forced to also think about numbers. How to attract the best employees; how much to pay them; why did Countdown stop selling so fast?; my air conditioner is broken in the middle of summer; I’m being shoplifted to death; rent in a nice part of town is extraordinarily expensive; etc. and so forth. For any small businessperson, the numbers are what dictate and quantify success. Everything else is important: marketing to young readers and their families; creating a clean comfortable environment to attract and keep clientele; having the most diverse inventory financially feasible–but these things are all impossible without those trifling numbers.

    The definition of a good comics retailer is somebody who loves what they’re selling, and has enough business sense to make it be profitable, even if sometimes it’s only barely profitable. Anyone who’s a better businessman than that would be way too smart to choose this industry to make money in as a retailer. The definition of a GREAT comics retailer is someone who loves what they do and is filled with the kind of relentless optimism that allows them to year in and year out, endure the slings and arrows of an odd and mercurial industry, and build the kind of comic book stores they wish that they’d always had as kids. The kind of stores they want THEIR kids to grow up in. But you gotta crunch numbers if you want to sell anything.

  11. Dustin,

    Nowhere did I say that such numbers are “trifling.” They are vital to running a successful business. I didn’t mean to imply otherwise.

  12. The retailer does not inherit all of the risk. The publishers likely has thousands of dollars tied up before the book is even solicited, and even once the solicitation goes through, likely has money tied up in overprint. If publishers could get retailers to inherit all of that risk, then no publisher need ever go out of business!

  13. Dustin,
    To address your point that any one who can do better than that in comics would be way too smart to not be in another business, you might be surprised.

    I’ve been told by others I’ve talked to that I’m not an idiot, I consider myself at least reasonably intelligent. I was making a LOT more money about 6 years ago doing sales. Then I realized a couple things.

    1. The world needs more great comic stores. (Which I LOVE your definition of great, by the way)

    2. I don’t need to be rich. I need to not want to blow my brains out each morning at the thought of going to work each day.

    3. I really love comics and want to spread the word.

    4. I had had it putting up with sitting in a cubicle listening to obvious intellectual inferiors telling me what to do on a day to day basis.

    So here I am. And I’m pretty sure I’m not the only retailer in this business after arriving at those conclusions.

  14. Oh ho, Tim at More Fun! While I’m sad to say that–by my admittedly very subjective definition–there are much smarter businessmen than you, it’s nice to know that there are businessmen like you running comics stores out there. With the kind of altruism you’ve got, you should have been a veterinarian or a priest or something, er, that’s altruistic.

  15. To Heidi’s seeming implication that there was something inherently wrong with there being 18 Booster Gold comics on eBay within an hour, THAT IS WHAT THEY WERE GIVEN TO RETAILERS FOR!

    These items are created to help retailers cover the expense involved in attending such functions. I passed on attending this year as I couldn’t justify the $600-800 it would have cost to fly in from San Diego, especially when that could more wisely be invested in our new POS system.

    Another problem comic retail/DM faces is the lack of understanding even by those who often report on it. It’s almost the same type of misunderstanding comics themselves face when people refer to comics as a genre rather than a medium.

    Are there lousy comic shops? Sure, just like there are lousy restaurants, lousy theaters, lousy banks… however often the “lousy” label is applied not because a shop is dirty, dingy or poorly staffed but because it doesn’t carry the books the critic(s) feels it should, which is wholly ridiculous.

    As pointed out by a few folks before me, DM shops are “SPECIALTY” shops, which means they’ve chosen to specialize in a type of product. It is totally up to them to determine how micro or macro the focus is, it’s their money backing those decisions. I’m sure that McDonalds could add to their bottom line by adding hot dogs (hey food is food, right), I’m sur Baskin & Robbins customers also enjoy Ben & Jerry’s Ice Cream, maybe they should stock that as well?

    The simple fact is that there is not enough profit in most non big-2 comics to justify most stores carrying them and I say that as the most diverse shop in San Diego and a sponsor of the Eisner Awards.

    Too few publishers (of any size) market their work to the extent needed to justify DM stores investing non-returnable $$$ in them, not to mention that even if they sell, most will return 10-30% less profit than Marvel, DC, Image and Dark Horse product. It is silly to deride a retailer for not wanting to take such a risk when the upside is a product that they will have to work harder to sell all while making less profit/unit.

    I’ll leave younow to run over to 7/11 and jeer their lack of produce or diversity of condiments.

  16. Not that I don’t love comic book shops, but I sometimes feel that their positions are a bit too defensive. I care about comics, at the end of the day. As far as comic shops serve that end, I’m happy. But I’m also very, very sad that there are no comics (or few) in supermarket spinner racks anymore. I’m THRILLED that bookstores are more interested in comics (at least GNs). I’d love it if some rock stars wrote some comics that got carried by record stores or unforeseen other places we could infiltrate.
    It would be a bad world for us without comic shops, but we need other means.
    You’re right… webcomics aren’t the whole answer. Web is not paper, and some comics need paper and some need web. It expands our world, DEFINITELY, but if paper comics went away certain kinds of comics would also go. The experience is necessarily different on-line.
    All this aside, I dream someday of seeing the purely literary comic book shop. Not that I want the mainstream ones to go… but if there were a few really snooty shops that carried all of Top Shelf and Fantagraphics books, with only the very smartest superhero books to be seen… where guys in ties sat around talking about the symbolism in books… that would be fun. I’d go.

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