Is this for real? DC Cuts Ties with Diamond Comic Distributors 5 5

[fastballspecial]

32 minutes ago, Hieronymus Bosch said:

55 minutes ago, fastballspecial said:

There is alot to be said for the above. One of my locals shops survived for 15 years without carrying new issues. He felt there was no profit in them
and I tend to agree. He carried some stuff from Diamond, but not new issues. He survived on $1 back stock and back issues sales. When you can pay
less $.10 a book and sell it for $1. its a pretty good profit margin over time.

 

You can make money off of new books. There's just certain factors that have to be in place, and you have to really do your due diligence in ordering with a heavy lean toward regular subscription customers.

Yeah you need the volume to accomplish this. Its just seems like a losing proposition for most shops. 
Or you have to insist on payment upfront or some sort of subscriber model that protects the store better
against non payment.

 

 

[Buzzetta]

On 6/6/2020 at 12:25 AM, lighthouse said:

 

And no, DC, I’m not putting out your books on Tuesdays. They’re going out on Wednesday with everyone else. Your new releases represented 8.4% of my shop’s revenue last year. I’m not designating a special day every week just for you.

Just wondering and I do not want to fuel or start a rumor.  By entering into a purchasing contract, might you be required to put them on the shelves on Tuesdays?  I agree that it is best to put them out all at once but could DC force your hand here?

[lighthouse]

1 hour ago, Buzzetta said:

Just wondering and I do not want to fuel or start a rumor.  By entering into a purchasing contract, might you be required to put them on the shelves on Tuesdays?  I agree that it is best to put them out all at once but could DC force your hand here?

Street dates are an on-or-after proposition. We have to abide by them for lots of product we receive in advance (Comics, Funkos, Magic, etc). Shipping delays are common. No one would be able to enforce an “on” date.

[dupont2005]

Everyone complains about Diamond until someone does something about it, and then they complain about that too  

[Bookery]

20 hours ago, lighthouse said:

People grossly overestimate how price sensitive consumers are. My customers are well aware that every single item in my store (other than wall books) can be instantly purchased cheaper online. They aren’t stupid. They know that they can get discounts buying from Amazon or Midtown or any number of other online options. They don’t care.

This is why it's a shame that no more than a handful of shops post here (though it's pretty understandable why they don't) -- it is truly fascinating how different the customer bases are in different parts of the country.  It also depends upon location within those areas as well.

I suspect if you're in a mall you get a huge amount of impulse buys, plus the convenience that people can get a lot of shopping done in a lot of different places all in one trip.  Bedrock is in a region that is upscale enough to support his ordering from 300 different product vendors.

I'm in a suburb of a medium-sized Midwest city.  When we opened in 1984, and for a number of years after, this area was defined by the next-door military base.  Military and civilian support probably accounted for 80% of our business.  They had disposable income... they prized service and convenience, and discounts weren't an issue.  They also were heavily into comics, science-fiction books, technology, and pop culture in general.  We thrived, and unlike most comic shops, I ultimately bought both of our buildings (partly because I though it was a wise financial maneuver, and at least in one case because I really didn't have much choice).  The military is still here.  But the town has changed... it didn't keep up with the kind of housing military families desired, and so they left (almost totally) to more-distant suburbs. Plus, for later generations, there began to be a huge push more to technology (video games, digital socializing, etc.) and away from reading of physical material.  Since I own the buildings, up and moving to another area isn't affordable or even physically feasible.

What remains is a hardcore base that tends to be less-affluent, but prefers physical comics (books are pretty much dead) to electronic ones.  And the Mid-west mindset is very much more oriented toward bargains than some places in the country.  Years ago I as I read sales figures and watched the ascent of graphic novels, I actually graphed out plans for a total restructuring of our store.  I was going to be the biggest GN dealer anyone has ever seen.  I was planning on spending thousands in new double-sided wooden display racks that would run the length of the shop.  But even as articles touted the boom in GNs, suddenly our sales declined.  Sharply.  Fortunately I held off those plans.  It turned out that if our customers wanted GNs... they just didn't want them form area shops.  It was the rise of the Deep Discount on-line shops, and even customers who were willing to buy weeklies at full price (they liked being able to select their own copies), still couldn't pass up the opportunity to save 40% on a $19 hardcover.

But even more than that... price came in to play.  As Marvel Masterworks rose from $29 to $49 to $69, sales not only declined, they evaporated.  For whatever reason today... our current base doesn't seem to care about trades at all.  We order mostly for files, with only a few making it to the racks.  And even then, they only want leotard material.  Indies, humor, offbeat, underground... those are no-gos around here.  And if we didn't offer a discount on them, we wouldn't even sell those.  Even with vintage collectibles... if you dare to price even a hot issue $1 above the last recorded GPA value... most customers will throw a fit (the funny thing is-- they pass on them or hold off, and then an out-of-state dealer will sweep them up and take them to the coasts where they sell easily).

As I said... every area is different.  This is a floppies town.  On the whole, they don't like GNs, or magazine-format, or books, or pricey statues, or even more than the occasional t-shirt.  They want stuff that can be collected (or flipped) and will fit into basic bags and backers and organized into comic boxes.  And they want them, whenever possible, cheap.

[Bookery]

9 hours ago, dupont2005 said:

Everyone complains about Diamond until someone does something about it, and then they complain about that too  

Except that nobody "did anything" about Diamond.  Every shop in the country still has to order most of its stuff from Diamond.  It's just that DC now has a different distributor-monopoly than Marvel's distributor-monopoly.  Yes... there are "2" sources now for DC product... but I suspect DC did that to hedge its bets in case one doesn't survive as their distributor.  I also suspects DC's animus is so intense with Diamond that there is a hope on their part that Diamond doesn't survive (that would also cause problems for Marvel, Image, and myriad other DC competitors, so DC probably views it as a double-win scenario).

But -- though I disagree with Bedrock's business model as it applies to smaller-scale operations-- he's probably right that in the short-term DC's move won't impact shops all that much once the dust settles.  But the timing, roll out, choice of distributors, rapidity and general up-yours-peasants attitude of the company doesn't bode well down the line.  Trust me, AT&T is nobody's friend... if they can screw up something for their customer, they will... over and over.  This is no coincidence DC did this only about a year after their takeover.  And DCBS and Midtown are not my enemy... they are hyper-competitive as is their right... but they are certainly not my friend either, and it is to their advantage that I and the rest of us shops wouldn't exist.   Distributors in the past didn't deep-discount directly to the consumer in an end-run around their own clients.  

[lighthouse]

1 hour ago, Bookery said:

As I said... every area is different.  This is a floppies town.  On the whole, they don't like GNs, or magazine-format, or books, or pricey statues, or even more than the occasional t-shirt.  They want stuff that can be collected (or flipped) and will fit into basic bags and backers and organized into comic boxes.  And they want them, whenever possible, cheap.

No doubt. I was chatting with a store owner friend of mine during lockdown and we swapped 2019 sales counts on a few items. The differences were astounding.

Last year I sold:

37 copies of Infinity Gauntlet TP

71 copies of My Hero Academia v1

21 copies of Killing Joke HC

29 copies of Saga v1 TP

3 copies of Daredevil Guardian Devil TP

He’d sold half again as many My Hero and Killing Joke, less than half as many Infinity Gauntlet or Saga, and five times as many of Guardian Devil. Some of it is about what you push. But towns are just different. Even beyond the standard “East Coast loves DC, everyone else prefers Marvel” differences. I happen to be in a town where no one buys Justice League but everyone loves Nightwing. Could be a function of long ago stores here and what they handsold to people. Or something else. But Justice League doesn’t sell at all here from any time period. Silver, Bronze, 80s, Morrison, Current. None of it sells. Nightwing I can’t keep in stock.

 

[lighthouse]

1 hour ago, Bookery said:

And DCBS and Midtown are not my enemy... they are hyper-competitive as is their right... but they are certainly not my friend either, and it is to their advantage that I and the rest of us shops wouldn't exist.   Distributors in the past didn't deep-discount directly to the consumer in an end-run around their own clients.  

I disagree with you here. It wouldn’t benefit DCBS or Midtown to see a widespread closing of comic shops. They might benefit if specific shops with a heavy online presence closed. But local comic shops create new customers and grow the size of the market, which feeds new customers to internet retailers. 

If the national LCS count dropped from 2700 to 1350 and stayed there, there would be lots of titles (and a few publishers) that would no longer be viable because the economies of scale would be gone. Midtown and DCBS might see their share of that smaller pie go up. But I’m confident they do better the larger the overall market is.

[roach04]

On 6/6/2020 at 7:47 PM, FlyingDonut said:

@MrBedrock (and @Bookery )

- why do you think literally every other dealer I've talked with since yesterday is over the top angry with DC? Is it because people don't want change or something different? All I've ever heard from people is how terrible Diamond is - so this is getting rid of Diamond and now everyone is up in arms over it? Its just confusing.

And yes, I do believe DC will be getting out of the physical production of making monthly comics. I believe they will make monthly digital comics and then collect everything in trades, which will allow them entry into much more sales outlets. There will be a Batman book in bookstores collecting the last six  months of comics that have never been printed before. Just my two cents

I'm more than a bit confused too.  I have heard how awful Diamond is from every LCS owner for literally decades.  Somewhat off topic but when I asked a few months back if my shop would get the books from Bad Idea (new publisher who said they would go direct to retailers), my guy said "if it's not from Diamond it's too expensive for us to make it work."  And I get the anger at having to pay your competitors for product - DCBS is massive and offers just stunning direct-to-consumer discounts.  Certainly a crazy situation.

I am inclined to your belief - that physical monthly's are not in DC's long term plans.  From the publishing perspective DC and Marvel are insignificant dollars to their parent companies.  And the Covid shutdown may have been a big part of DC's decisions - mgmt would have said "wait...we couldn't sell anything for 3 months...and we only lost $X?  For that money, why are we even doing this?"

[dupont2005]

7 hours ago, Bookery said:

Except that nobody "did anything" about Diamond.  Every shop in the country still has to order most of its stuff from Diamond.  It's just that DC now has a different distributor-monopoly than Marvel's distributor-monopoly.  Yes... there are "2" sources now for DC product... but I suspect DC did that to hedge its bets in case one doesn't survive as their distributor.  I also suspects DC's animus is so intense with Diamond that there is a hope on their part that Diamond doesn't survive (that would also cause problems for Marvel, Image, and myriad other DC competitors, so DC probably views it as a double-win scenario).

But -- though I disagree with Bedrock's business model as it applies to smaller-scale operations-- he's probably right that in the short-term DC's move won't impact shops all that much once the dust settles.  But the timing, roll out, choice of distributors, rapidity and general up-yours-peasants attitude of the company doesn't bode well down the line.  Trust me, AT&T is nobody's friend... if they can screw up something for their customer, they will... over and over.  This is no coincidence DC did this only about a year after their takeover.  And DCBS and Midtown are not my enemy... they are hyper-competitive as is their right... but they are certainly not my friend either, and it is to their advantage that I and the rest of us shops wouldn't exist.   Distributors in the past didn't deep-discount directly to the consumer in an end-run around their own clients.  

If distributors didn’t deep discount to the consumer then how come DCBS can beat every shops price by a good 40%?

[JJ-4]

49 minutes ago, dupont2005 said:

If distributors didn’t deep discount to the consumer then how come DCBS can beat every shops price by a good 40%?

I agree.  It also makes you wonder just how poorly Diamond was run as a business, poor reputation and not able to be profitable as a monopoly?  I think they were either run by a complete idi0t or Diamond was just able to squeeze huge amounts of profit out of the system that lined the pockets of the owners.  If they go out of business, good riddance.

Edited June 8, 2020 by JJ-4

[Bookery]

44 minutes ago, JJ-4 said:

I agree.  It also makes you wonder just how poorly Diamond was run as a business, poor reputation and not able to be profitable as a monopoly?  I think they were either run by a complete idi0t or Diamond was just able to squeeze huge amounts of profit out of the system that lined the pockets of the owners.  If they go out of business, good riddance.

Because Diamond isn't a monopoly on entertainment... comics are one of the lowest-in-demand forms of entertainment there is.  If I literally owned every Big Little Book on the planet, and began selling them... how rich do you think I'd become?  To be a successful monopoly, you have to have something everybody wants.  Which is why Diamond isn't a monopoly, or they'd have been broken up by now.  When Diamond began, video games were in their infancy.  New release movies were on VHS and cost $79.00 if you wanted to own one.  There was no streaming.  There were no cellular phones.  There was no such thing as social media.  As I've stated before, when I began my primary customer base was young military men... and they loved comics, science-fiction, and technology.  As technological entertainment improved, however, they began to only crave the technology.  How is that Diamond's fault?  It's nobody's fault... it's just the passing of time and the changing of interests.

In the early '90s, I sold $500 per week in used science-fiction paperbacks.  Before I got out of them last year, we were down to $20-$30 per week in sales.  In the '90s we sold $1000/wk. in non-sports cards.  Our market is literally $0 now.  Not one customer for them.  We used to sell $1000/wk. in manga.  Current local market -- $0.  Geppi is literally trying to keep the comics market alive, probably against all better judgement in an Ahab can't-win situation to stave off the collapse as long as possible.  Maybe he's doing it right, and maybe not.  But you say "good riddance" to Diamond (without any alternative in mind)... but I suspect DC/AT&T in their own time-delayed way is saying good riddance to "you", the comic book buyer.  After all, AT&T didn't get where they are favoring paper products over digital technology... there's no way they're going to start now.

[Mercury Man]

9 hours ago, lighthouse said:

Even beyond the standard “East Coast loves DC, everyone else prefers Marvel” differences.

Is that true?  I never thought DC had a specific regional pull.  

[Myowncollector]

Good stuff. I hope comic shops stick around. I like them. Although I don't provide them much support. No desire to pay full price on anything no matter how good the service is. I just want to dig through some boxes and pick up everything you have vastly underpriced. Get some $1 who knows spec books. If something is cheaper online that is where I will get it. Same price then I will get it from the shop and pay cash to save them the 3% but usually find them to be priced sky high. I must be in the minority though or they would all be out of business. I don't know who buys from mile high but somebody must. 

[dupont2005]

5 hours ago, JJ-4 said:

I agree.  It also makes you wonder just how poorly Diamond was run as a business, poor reputation and not able to be profitable as a monopoly?  I think they were either run by a complete idi0t or Diamond was just able to squeeze huge amounts of profit out of the system that lined the pockets of the owners.  If they go out of business, good riddance.

It’s definitely the second

[Scrooge]

5 hours ago, Bookery said:

We used to sell $1000/wk. in manga.  Current local market -- $0.

You surprise me there. Is that due to the change in your local clientele (military families moving out to another suburb)? It's quite a contrast for example from LightHouse and the other retailer he mentioned who were able each to sell, for example, 70 and ~100 copies of My Hero Academia vol. 1. respectively.

[ExNihilo]

8 hours ago, dupont2005 said:

If distributors didn’t deep discount to the consumer then how come DCBS can beat every shops price by a good 40%?

Not in the industry, but growing up, I was basically taught that the difference in price between retail and the provider of goods was about 50%.  That's not a factual rule, but a generalization (it could be more, it could be less).  I see avocados straight from farmers for like 7/$1, but those same avocado's are like 1/$2 at the store.  But I digress.  The point I'm trying to make is that DCBS is able to beat every shops price by 40% due to economies of scale.  While local shops are selling maybe 30-100 of a particular title, DCBS is selling in the thousands because their business model is national.  The cost of overhead is averaged out over thousands of customers while local stores are probably spending more per customer.  This is likely seen in the difference in freight costs, rent, wages, etc.

[MyNameIsLegion]

As a non-shop owner I've been reading this thread with keen interest as I have friends that are shop owners or otherwise very knowledge of the retail comic industry and it seems clear to me that the old business model is about to undergo the last mile of disruption that was already 10 years in the making. I'm just not sure which way it's going, or if there are 2 different countervailing forces here, but nothing seems very certain one way or the other from the outside looking in. When I see @MrBedrock on one side of the crystal ball &  @lighthouse & @FlyingDonut on the other and I know them personally to all be very smart individuals I have to just throw my hands up in confusion.  

On one side TJ &U Dan are saying floppies are dead, and DC is phasing it out in favor of all digital and trades. Richard is of the opposite opinion, that digital distribution just isn't as profitable as print.   How can both be right? (or wrong) Maybe we are not asking the right question. Looking to Netflix, and Apple Music, the think the real question is what is the future of retail versus subscription services?  Much of the conversation from the LCS' here has been how little shelf space is devoted to retail for DC comics, and most only bother to fill DC comics for subs.  If that has been the case pre-Covid, DC comics parent company may already have been trying to shift away from a retail/distribution model in their 5 year plan. That seems more in keeping with AT&T. They don't want customers, they want SUBSCRIBERS to reliably spend the same amount of money every month,  electronically billed & paid, so they don't even think about it.  Retail is effort, and conscious micro-decisions on a weekly or monthly basis by both retailer and customer on what to order, what to market, and what to buy.

Imagine as an LCS what the business model would be if your customers paid in full automatically, in advance for the service of being provided comics, just like Apple Music, or Spotify, or Netflix and not having to wait a month for the deadbeat sub to pick up 4 weeks of books, or maybe even ghost? If there was a digital sub, and a print sub, or a combination of the 2 and retail LCS was really just a browse and pick-up point that would shake up the traditional model. Obviously the LCS has the least to gain and the most to lose in this situation, as they could be cut out of the equation entirely.

 If I paid 30 bucks a month to get 12 digital titles and 8 floppies. some business entity would be very happy to have that reliable revenue. I'm just not sure who that business entity is and how that works for the LCS, distribution, DC etc.  AT&T's business model could be very different than Disney's for their subsidiaries as they duke it out in the content subscriber space.  I think that is where we see LCS and distribution being very vulnerable to disruption and not necessarily in a positive way if Marvel and DC are pulling in opposite directions. Print for Marvel may be profitable, like Richard has said, but floppies for DC may not be like TJ and Dan have said.  Both could be right, but that's not predictable, and that uncertainty is usually not good for any business. 

Edited June 9, 2020 by MYNAMEISLEGION

[Prince Namor]

13 hours ago, dupont2005 said:

If distributors didn’t deep discount to the consumer then how come DCBS can beat every shops price by a good 40%?

Smaller profit margins made up through volume - without the overhead of a B&M.

[Prince Namor]

19 hours ago, lighthouse said:

But local comic shops create new customers and grow the size of the market, which feeds new customers to internet retailers. 

I'm not saying they don't but... I wonder how much that it's necessary. 

I really do believe that one of the things that hurt comic book sales was the disbanding of the newsstand, where kids would first see comics while their mom was grocery shopping, but... the world has changed dramatically since then.

The Superhero movie is where kids first become aware of these heroes. And now, even little kids have smart phones. The internet/social media - THAT is where they first discover everything.

Losing video stores didn't get rid of movies. Losing music stores didn't get rid of music.

I'm not saying I LIKE it, I HATE the idea of it. And comics DO have a uniqueness in back issue collectibility, but... isn't even THAT becoming more of an online thing?