'This could change the face of comics': Is coronavirus comic book shops' biggest villain?
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18 minutes ago, the blob said:

I guess lawn care guys are "essential?" Our's showed up today. We were kind of hoping we'd get a $ break this month, but I guess they have their "spring" whatever scheduled.

Grass has to be fed too, dammit!

 

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18 minutes ago, lighthouse said:

I wouldn’t read too much into Diamond not paying its vendors this week...

Oh, it's not that I expect vendors to cancel their accounts.  Like you said, they don't have much choice anyway.  But I would think Diamond might have had a bit more cash flow set aside than that.  I still paid Diamond for the last shipment we received, even though it came while we are in lockdown.  Future shipments would have been a problem... but even a business like ours has been able to pay all our bills (vendor, credit card, taxes, bank fees, payroll, etc.) up at least until this point, despite 1+ weeks closed.

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2 hours ago, Bookery said:

Oh, it's not that I expect vendors to cancel their accounts.  Like you said, they don't have much choice anyway.  But I would think Diamond might have had a bit more cash flow set aside than that.  I still paid Diamond for the last shipment we received, even though it came while we are in lockdown.  Future shipments would have been a problem... but even a business like ours has been able to pay all our bills (vendor, credit card, taxes, bank fees, payroll, etc.) up at least until this point, despite 1+ weeks closed.

That’s the new way of doing business. One slow week and multiple major industries need bailouts

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Has anyone mentioned what the possible cessation of print comics would do to CGC?!  You know, the host of the message boards where we're presently posting!  Sure, there's millions of unslabbed books out there but if the new product machines stopped producing it would most likely be devastating, albeit, not in the immediate term! 

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34 minutes ago, Coverless 9.8 said:

Has anyone mentioned what the possible cessation of print comics would do to CGC?!  You know, the host of the message boards where we're presently posting!  Sure, there's millions of unslabbed books out there but if the new product machines stopped producing it would most likely be devastating, albeit, not in the immediate term! 

I doubt there is all that much business in slabbing newly released coins, and NGC seems to be doing just fine.

Yes, there would be a huge volume dropoff from the "brand-new 9.8 prescreen" game, but turn times would likely improve on all other service levels, and that might well coax out inventory that doesn't currently make the trip to Sarasota because the TAT makes the process less attractive. At any given time I probably have 500-1000 books in inventory that might benefit from that trip. But if I can turn over raw inventory three times at a XX% markup in the time it takes to get a book back that might see a net YY% markup after slabbing, the math doesn't always point to shipping them out.

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6 minutes ago, lighthouse said:

I doubt there is all that much business in slabbing newly released coins, and NGC seems to be doing just fine.

Yes, there would be a huge volume dropoff from the "brand-new 9.8 prescreen" game, but turn times would likely improve on all other service levels, and that might well coax out inventory that doesn't currently make the trip to Sarasota because the TAT makes the process less attractive. At any given time I probably have 500-1000 books in inventory that might benefit from that trip. But if I can turn over raw inventory three times at a XX% markup in the time it takes to get a book back that might see a net YY% markup after slabbing, the math doesn't always point to shipping them out.

Agree. If TATs shot up, my submissions would likewise go up. 

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Posted (edited)
59 minutes ago, Coverless 9.8 said:

Has anyone mentioned what the possible cessation of print comics would do to CGC?!  You know, the host of the message boards where we're presently posting!  Sure, there's millions of unslabbed books out there but if the new product machines stopped producing it would most likely be devastating, albeit, not in the immediate term! 

You mean that CGC would finally see the more of their valuable time spent on grading and slabbing vintage collectible comic books, as opposed to wasting time and tying up their valuable resources on virtually worthless slabbed manufactured comic books fresh off the printing press?  :applause:

Edited by lou_fine

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4 hours ago, the blob said:

I guess lawn care guys are "essential?" Our's showed up today. We were kind of hoping we'd get a $ break this month, but I guess they have their "spring" whatever scheduled.

Speaking of essential...

I needed some fresh air and went on a bike ride for an hour. 

 

IMG_7219-1.jpeg

IMG_7220.jpeg

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3 hours ago, Bookery said:

Oh, it's not that I expect vendors to cancel their accounts.  Like you said, they don't have much choice anyway.  But I would think Diamond might have had a bit more cash flow set aside than that.  I still paid Diamond for the last shipment we received, even though it came while we are in lockdown.  Future shipments would have been a problem... but even a business like ours has been able to pay all our bills (vendor, credit card, taxes, bank fees, payroll, etc.) up at least until this point, despite 1+ weeks closed.

Glad you said that before I did.  

The most alarming thing to come out of this from my perspective is that Diamond would appear to be cash poor in this situation.  The chain is 'that' weak from studio to buyer. 

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4 minutes ago, Buzzetta said:

Glad you said that before I did.  

The most alarming thing to come out of this from my perspective is that Diamond would appear to be cash poor in this situation.  The chain is 'that' weak from studio to buyer. 

Because they probably need to devote their cash to bills they have less leverage over?

 

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But honestly I find it unsurprising that diamond does not have more than 1-3 weeks of cash in the bank for an emergency. As a society we don't save for a rainy day. What's in it for a business? .3% interest? When a money market made 4-5% there was a reason to have some cash handy.

 

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2 minutes ago, the blob said:

But honestly I find it unsurprising that diamond does not have more than 1-3 weeks of cash in the bank for an emergency. As a society we don't save for a rainy day. What's in it for a business? .3% interest? When a money market made 4-5% there was a reason to have some cash handy.

 

It may also be a simple matter of them choosing a different path with their terms. They might have 1% 10 net 30 terms and they are simply choosing to forgo the normal discount they take advantage of by paying in 10 days, while still being well within their terms. Could be 2/10 net 45, 2/10 net 60. Could be a hodgepodge of different terms with different vendors. But them skipping a "normal" week's payments doesn't automatically mean they are too broke to pay.

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1 minute ago, the blob said:

Because they probably need to devote their cash to bills they have less leverage over?

 

I am hoping you are right.   

Are there any other publishers / printers are reporting problems? 

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There was an article about DC still potentially publishing through a deal with Penguin.  Wouldn't that effectively destroy about half of Diamond's business?

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21 minutes ago, dem1138 said:

There was an article about DC still potentially publishing through a deal with Penguin.  Wouldn't that effectively destroy about half of Diamond's business?

That article starts sentences with "Could this be their chance to" and "It is quite possible that". I could write an article saying "Could this be Greggy's chance to move into Steve Geppi's basement?" and "It is quite possible that Greggy owns eleven copies of Action #1". That wouldn't make them true. That website is devoted to getting advertising clicks. Rumor-mongering gets clicks. He's so notorious for not fact-checking his stories that Diamond placed a ridiculous fake story on its own site to see if he'd post it on his site, and he did. https://bleedingcool.com/comics/scoop-marvel-and-dc-to-publish-new-twelve-issue-crossover-spider-man-batman/

But regarding the "half of Diamond's business" question, Comichron reported that DC was 29.23% of the print market in total dollars last year (Marvel was 40.3%). Given that Diamond sells a lot of toys, statues, apparel, etc, I doubt DC's print business exceeds 20% of Diamond's total revenue.

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4 hours ago, Coverless 9.8 said:

Has anyone mentioned what the possible cessation of print comics would do to CGC?!  You know, the host of the message boards where we're presently posting!  Sure, there's millions of unslabbed books out there but if the new product machines stopped producing it would most likely be devastating, albeit, not in the immediate term! 

Plenty of print comics aren’t even distributed by Diamond or sold in comic shops 

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The Cheesecake Factory situation is nothing like what's going on here. Cheesecake Factory is able defer / renegotiate leases to some extent because the long-term cost of evicting them is very high to the property owner (hard to find a tenant in the middle of a pandemic). In the case of DCD, you have publishers who incurred real expenses by printing books, now the books are gone and they aren't getting paid, publishers are left holding the bag. What incentive do publishers have not to take Diamond to BK? Almost none, DCD isn't operable for the foreseeable future whether in BK or not, and if DCD can't pay the bills after just a week or two of Corona then let's face it, publishers are never going to be made whole.

Time to prepare for a comics industry without DCD. No idea what that looks like.

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10 hours ago, Coolio McCool said:

What incentive do publishers have not to take Diamond to BK? Almost none, DCD isn't operable for the foreseeable future whether in BK or not, and if DCD can't pay the bills after just a week or two of Corona then let's face it, publishers are never going to be made whole.

Time to prepare for a comics industry without DCD. No idea what that looks like.

The exact same incentive that landlords have not to boot Cheesecake. 

There is no ready replacement for Diamond. Rich Johnston would have you believe that PRH could just immediately step in and distribute comics for these  publishers. The thought is ridiculous. Yes PRH distributes books, and yes comics are also printed material. But the scale differences are enormous.

B&N is the largest bookstore chain in the country. If you go to their website, and check “new releases” and sort by date, you’ll find that they average 30-60 new releases coming out each week. That’s 30-60 new book SKUs that need to be tracked. Add in some reprint editions, some hardcovers transitioning to softcover, and the largest bookstore chain in the country is getting in roughly 80-100 newly published SKUs each week. 

If PRH were supplying all those books (they aren’t), they’d need to make room in their warehouse for 80-100 new SKUs each week to go out. Pallets and pallets worth. Thousands of pounds. All of very durable material that isn’t terribly fragile. And items large enough that new orders are in full case quantities and even small batch reorders will rarely have more than 15 different SKUs in a single box. 

A typical week for Diamond sees 300-500 newly published SKUs (the current FOC week has 385).  Perhaps 10% of those are durable items similar to what PRH is used to handling. The rest are fragile and are being sold to condition sensitive customers. Boxes of new orders will routinely have 60 different SKUs all packed in the same box. Every one of those SKUs needs its own separate picking location. Items are easily misidentified. It’s not like pointing at a stack of pallets and saying “there’s the new Nora Roberts”. It’s “there’s the new issue of Spider-Woman with 17 different covers and some of those retail at $200 for a 2oz item that loses half its value if you grip it too tightly when taking it out of the box”. 

DC knows this. Marvel knows this. Image knows this. Just because PRH can distribute pallets of books doesn’t mean they are prepared to distribute comics to the direct market. Could they get there in 6-8 months, build all the infrastructure, train all their people, develop a new supply chain? Of course they could. Could they set up separate warehouses to handle the non-printed merchandise, and process orders for 500,000 SKUs of toys and shirts and statues and the rest? Of course they could. 

So could the publishers have a viable replacement for Diamond in 6-8 months? Sure. They could also take Diamond to court for their back money and just stop publishing altogether. But I think it’s far more likely they let Diamond slide for a while. Because the transaction cost of finding a replacement (or in this case encouraging a replacement to spontaneously develop) is enormous.

This isn’t like loaning money to a meth addict who smoked up the money you loaned him last week. This is like John Deere letting payments slide from a farmer whose spring crop burned this season, but has loyal customers waiting to buy his summer harvest. There’s reason to believe he has the means to make good in the future even if he’s broke now. 

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19 hours ago, lou_fine said:

You mean that CGC would finally see the more of their valuable time spent on grading and slabbing vintage collectible comic books, as opposed to wasting time and tying up their valuable resources on virtually worthless slabbed manufactured comic books fresh off the printing press?  :applause:

Hey, the page counter needs a job too. New sig series comics or pre-screens for Cgc 9.8 are volume cash cows for slabbing companies. There is a shortage of quality vintage comics that justify the increasing slabbing, insurance and shipping fees, GST in Canada.

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