Approaching a Limit as X Goes to Infinity

By far the most important element of selling anything is getting someone to take the time to notice and learn about whatever it is that you're selling. Our biggest roadblock at MacGuffin is getting people to know about and come through the door. Selling them a comic is cake compared to that. If someone never takes notice of the product, they can't ever become a consumer of that product.

I've talked about the benefits of selling a graphic novel to fans of a movie adapted from it as opposed to selling a monthly series. DC seems to agree with that principle since they've two consignment programs to take advantage of the visibility of the last two films based on their comics. First was V for Vendetta, which any direct market store was able to get as many copies as they were willing to pay shipping for to display and sell at no charge for three months (assuming they met some very basic requirements, namely keeping the product on display in some format or another during that time period). The brilliance of this should be obvious to just about anyone who's paying attention since it allowed retailers to create nice big displays to grab customers' attention, at which point three quarters of the work is done. As I said, we did very well with this program and did not miss a sale during that period because we were never without a copy of it (something I can't say for the Serenity trade, which was out of print for about 2 months earlier this year -- otherwise it would likely have challenged V for Vendetta at the top of our best seller list).

DC is following up the success of that program with one targeted at Superman Returns. They've made four different Superman titles available on consignment with the same terms as V for Vendetta and I know that we're taking advantage of it at MacGuffin to set up a Superman display to coincide with the movie (it will be replacing our much smaller X-Men display in the next couple of weeks). I don't know if it was the result of a marketing push by DC or simply smart merchandising by a category manager, but our local Borders had an endcap of their graphic novel section devoted to V for Vendetta (as well as Watchmen and League of Extraordinary Gentlemen) and Barnes & Noble featured V for Vendetta on their front table for several weeks around the movie's opening. I expect to see similar displays for Superman Returns.

Strangely, no such display exists for X-Men at either store (though that was before the huge opening this weekend). Our own X-Men display is built around The Dark Phoenix Saga and Astonishing X-Men but is much smaller than we'd like it to be simply because we can't afford to sink money into inventory that may or may not move. Despite the fact that there is almost no direct tie between Superman Returns and any of the trades we're offering, our Superman display will be much larger based solely on our ability to stock it without tying up capital. With V for Vendetta DC assumed the risk by allowing full returns on whatever retailers ordered, likely because they were dealing with a title that has been and will continue to be in print for years to come. They really didn't risk much of anything. We had two consignment copies left over at the end of the return window but chose not to return them because it wasn't worth the shipping cost (one of them has since sold anyway). As much as both companies try to cling to their role as periodical publishers, DC seems much more willing (likely due to the success of their Vertigo books in bookstores) to utilize graphic novel sales when appropriate.

There's one big, flashing reason to buy product on a returnable basis and that is to find the sales ceiling for that product. In general, it's not too difficult to guess how often we will sell a copy of Y: The Last Man or Squee. It's usually not even difficult to guess how many copies of the latest Captain America hardcover we'll sell in the first couple of weeks. What's much more difficult, though, is to predict the sort of value that increased exposure will have on a comic or graphic novel. While I expected V for Vendetta to sell well, we would have lost a sale or two had DC not offered their consignment program from simply not having enough copies available (and possibly more had the display been less visible with fewer copies). I had no idea how many non-comics readers were going to come in for Civil War and we sold out on Free Comic Book Day, something that frustrates me to this day (despite ordering more than I thought we could sell). I'm simply not smart enough to predict the exact impact of a movie on related graphic novels so it's much easier to under order and lose a sale or two than to over order and be stuck with money tied up in slow turning inventory.

The idea of returnable merchandise may be something of a lightning rod in the comics industry, but more and more companies are seeing a potential benefit to allowing at least limited returns as a means of ameliorating risk to retailers and increasing the odds of getting product in front of customers.

Moving the Sales Needle

I don't do much in the way of reviews at this blog since its set up as more of a nuts and bolts comic retailing site, but I reviewed X-Men: The Last Stand earlier for two reasons. The first was to get my own conflicted thoughts about the movie down on paper (so to speak). The second reason leads directly into this post: how do film adaptations benefit comic sales?

As with anything in this industry, there is almost no way to quantify an answer to those questions beyond extrapolating from anecdotal evidence. Even so, there are a few conclusions that can be drawn from the general response we've seen to comic book movies. I've heard many people point out that comic companies need to find a way to translate the huge numbers of people who go to see comic movies into comic readers. What most often gets pointed to, though, is that comic movies barely move the needle on monthly comic sales. The scapegoat is generally the idea that what viewers see on the screen is not what they get when they pick up the comic. Which I completely agree with, except that I'm not talking about the fact that Spider-man is married and pushing middle age instead of fresh out of high school. There is little in any single issue of a monthly comic that is interesting enough to appeal to someone who saw and enjoyed Spider-man 2. Movies clearly help sell prose books, regardless of how faithful the adaptation turns out to be, because they provide an alternative version of the same experience. Monthly comics rarely do any such thing. Instead, they provide a small piece of a story which, unless it happens to be part one, is generally more trouble to get into than its worth. Movies will probably never sell more monthly comics because of the format.

What movies can do is help sell graphic novels and trade paperbacks. V for Vendetta is the best recent example of this, but last year showed how much the Sin City movie helped spur sales of those books. While both are relatively faithful adaptations, what they really are is full stories that anyone interested in the movie can pick up and read without preamble. They are particularly effective, though, because they are direct adaptations of material. Generally, adapting a comic series like X-Men doesn't lead directly into selling specific graphic novels. Which is why you end up with something like X-Men: The Last Stand wherein we get the beginnings of a smart adaptation of the Cure storyline mixed with a poor adaptation of the Dark Phoenix saga. Except that, because it draws so heavily on two specific storylines, a smart retailer can point someone who enjoyed the movie directly to those two trades and the reader will find something familiar. The Dark Phoenix Saga jumped roughly 5,000 spots on Amazon in the last few days and there's always entry level books like Ultimate X-Men to utilize.

The problem then becomes having enough inventory available to meet potential demand -- there are an incredibly small number of titles that we stock in enough depth to be certain that we've never lost a sale from lack of availability. Thankfully, DC uses a consignment program to promote films adapted from their books which allowed us to sell V for Vendetta like crazy when the movie first hit (it's by far our best selling graphic novel since we opened). Yet, Marvel has no such program, putting the onus on stores to stock and sell their product in conjunction with the film, rather than taking on less than minimal risk themselves as DC did (and is doing for Superman Returns). I get the feeling that, based on the reaction to the previous two films, no one at Marvel has much faith that the movie will move the needle in terms of comic sales. Too bad they're looking at the wrong gauge.

NEXT: How to exploit movies for fun and profit (plus our old friend returnability drops by)

Review: X-3

As a lifelong X-Men fan, I was of two minds while watching X-Men: The Last Stand. One part enjoyed seeing these actors once again embody these characters. If there's one thing that this trilogy has gotten right, it is casting. The other half of my brain, as a knowledgeable film fan, couldn't understand why the filmmakers were unwilling to rely on that strength. The movie sets itself on a collision course early and races through even token attempts to explore these characters in an effort to get to the big fights. The actors are then left to make the most of incredibly limited dialogue and often screen time.

All the same, there are some great smile inducing moments, from simply Kelsey Grammar's presence as Beast (and his line upon seeing the chaos Magneto has wrought) to seeing Kitty Pride's knack for outsmarting her adversaries. The action is entertaining and occasionally ingenious (as when we see how Pyro's talents complement Magneto's).

Still, I'm a bit disappointed in what I see as wasted potential. So much effort seems to have gone into working out the logistics of moving so many characters around the screen and stuffing so much plot into an hour and a half that the connective tissue was left out, to the point that actors are often barely able to get their lines out before the film cuts to another scene. It would have been nice to see not only more character but also a full consideration of the ramifications of the plot, both as an allegory and as it directly affected the world of these films.

Instead we get a massive, entertaining battle scene that ends the story by distracting the audience and hoping we don't remember to ask questions (although Whedon did much the same thing in the original Cure storyline). It's not exactly a satisfying end to this film, let alone the entire trilogy. Still, as the film ends it seems as though the filmmakers follow the example of the comics and press the reset button, allowing a follow-up movie to include just about every character that survived the film (and couple that didn't). Except of course, for my favorite character in comics since the age of 10.

Ultimately this film mirrors a period in the comics that I like to refer to as the interregnum -- that period toward the end of Claremont's run until Morrison took over wherein certain bright spots did appear, but the majority of X-Men comics were on cruise control. It's a shame, though, that two of the best X-stories ever were stuffed in the trunk.

But when the line in the movie that gets the best reaction is a reference to an internet video, you realize something's missing.

Quick Hits: BEA

A few more random thoughts about BookExpo America:

*I love the D&Q catalog, one big fold out poster featuring artwork from and descriptions of their 2006 graphic novel releases. While the format is a bit unorthodox, catalogs like this are pretty much invaluable when it comes to companies like D&Q, Fantagraphics and First Second since we don't order those through Diamond. They also give a much better idea of what to expect from the books than Previews. On top of that, they really show off the level of planning that they put into developing their lines.

*It was interesting to see a bit of role reversal for the "mainstream" comics publishers at BEA. Neither Marvel nor DC had advance copies of anything (or at least neither had any available on Sunday) and Marvel in particular seemed to be seriously outclassed by D&Q, Fantagraphics, TokyoPop, Viz, First Second and even Dark Horse. Marvel's booth was barely a presence, unmanned and relatively bare (though I've heard reports that there was much more to it on Friday and Saturday). Meanwhile DC did better, clearly shelling out some serious money for their booth and giving away a wide assortment of product, not to mention a product catalog. I don't know, I guess as a Direct Market retailer I should be upset that DC is putting so much effort into expanding their bookstore sales, but it really doesn't bother me in the slightest. It seems to me that I'm not really competing with a general bookstore because we're talking about such a niche market. Our customers know that 99% of the titles they can find at Barnes & Noble are going to be on our shelves and while the reverse is far from true. Even so, were I a general bookstore owner, I would have come away from BEA with the feeling that Marvel and to a lesser extent DC did not have much of a publishing plan.

*Most interesting freebie was a DVD promoting Alison Bechdel's Fun Home. Houghton Mifflin had galleys available as well (long gone by Sunday), but the DVD featured three video clips explaining the concept and background of the book, and a particularly interesting "how to" clip wherein Bechdel explained how she acted out each scene and used reference photos when drawing the book. This is a book with the potential to be huge and Houghton-Mifflin is pushing it as the next Persepolis.

BookExpo America

The first thing I noticed at this year's BookExpo America were the name badges. Or, more specifically what was keeping those badges around people's necks. I attended BEA in D.C. on Sunday (unfortunately missing out on most of the best events on Saturday & Sunday) and on the block and half walk from the parking lot to the convention center, passed about 75 people who all had Abadazad lanyards around their necks, which complemented the huge Abadazad banners and the Abadazad stairs nicely. Clearly Hyperion (owned by Disney) put some significant money into promoting the book to booksellers and librarians, and while it's no longer strictly a graphic novel, seeing this title featured so prominently certainly made me smile.

ICV2 provided an overview of the BEA and the role of graphic novels there, including pictures of the Abadazad and Viz banners. Their assertion, and I can't argue, is that graphic novels have been assimilated into the mainstream publishers' booths so well that, according to someone from Reed Expo, next year will feature the elimination of the graphic novel pavilion as a specially marketed section of the floor. I like this move, particularly since this year's Graphic Novel pavilion consisted of basically a huge, impressive looking DC booth and a Diamond booth featuring mini-booths inside for publishers like IDW, Gemstone and Image and capped by Dark Horse and Marvel booths. The DC booth was nice to look at (in fact it was probably topped by only the Random House and Penguin booths) but didn't strike me as particularly effective. The focus of the booth were two widescreen TV's showing the Superman Returns trailer and a commercial showcasing their manga titles. While they had a nice array of display copies of different titles to look at, I was surprised there wasn't more (or at least equal) focus on their Vertigo books. It seemed that the majority of titles were superhero or manga, although DC was giving away copies of the first Fables & Ex Machina trades, likely to piggyback on the Willingham and Vaughan's signings on Saturday. They were signing Fables: 1001 Nights of Snowfall and Pride of Baghdad respectively, two titles that also had double page spreads in DC's Fall/Winter catalog (and two titles that I wish I could have been there on Saturday to get copies of). The most puzzling thing, though, was that about half the booth was devoted to seating. To have a table and chairs was common at most booths, since sales are being made and a certain level of privacy is expected for that but DC's booth seemed to devote an inordinate amount of space to this -- either a brilliant design decision since there are so few places for attendees to sit and rest or a poor one since it restricted the space available to promote individual books. Since I wasn't there for the signings, it may be that the layout was to accommodate the logistics of those, though most publishers simply formed lines in their booths for authors.

While the graphic novel pavilion was a bit of a let down, I was impressed by both the TokyoPop and Viz booths. Viz's, while smaller than TokyoPop's, was crammed full of display copies of just about every title they offer plus free copies of Shojo Beat, Shonen Jump and the Viz sampler from FCBD (giving away FCBD titles was a common theme at the comics publishers' booths). Surprisingly (to me at least) the focus of the TokyoPop booth was their new prose fiction line. While there were plenty of manga titles on display, it was clear that they were trying to push the prose books both in layout and in sample giveaways.

The highlights, though, came at Drawn & Quarterly (as part of the FSG booth) and Fantagraphics (at the Norton booth). Fantagraphics had much more space to work with, showing off the breadth of their catalog while focusing on Complete Peanuts. They seemed particularly excited about the potential for Castle Waiting to be a breakout hit (apparently they underestimated demand and ran out of copies at the Linda Medley signing on Saturday). And, it being Sunday, Eric Reynolds was nice enough to let me take a proof copy of a book I had been dying to get a look at, Jason's The Left Bank Gang. Meanwhile D&Q made the most of their spot to show off Kevin Huizenga's Curses and Shenzhen, Guy Delisle's follow up to Pyongyang.

The best part, though, was that in wandering the floor I constantly caught snippets of conversation about graphic novels, from someone who was amazed at how many publishers had incorporated graphic novels into their offerings to a couple making plans to meet up for Grady Klein's signing of The Lost Colony at the Roaring Brook (and therefore First Second) booth. I have many more thoughts on the Expo that I'll be getting into over the next week, but overall I was impressed that graphic novels were such an integral part of the show.

Quick Hits 5/20

*Who needs Diamond, Baker & Taylor or even the publishers themselves when we have Amazon? Amazon pulled this the following day, but not before it came within a hair of passing the latest book featured on Oprah and The Da Vinci Code on the day the film opened. They then followed that up by offering Absolute Sandman (retail $99.99) for $14.99. Through Diamond Absolute Sandman would cost $65 wholesale (with the best possible discount). Clearly these orders will be cancelled or else Amazon will be taking a bath on these two books, but retailers certainly weren't going to chance being left out. Many stores, MacGuffin included, ordered multiple copies of both of these on the off chance that the price holds up (some ordered upwards of 50 copies). Most, I think, are hoping that it doesn't because it could wreak havoc with the market for these books. Absolute New Frontier would seem to be particularly susceptible to a flooding of the market, especially since it was the first and more publicized of the offers. More damaging still would be a situation like this upsetting the market for Absolute Sandman, which should be a perennial seller. My guess, though, is that all that will come of it is someone at Amazon getting reminded to double check their data entry.

UPDATE: As of Saturday evening, Amazon has cancelled all orders for these books, making the above no more than a theoretical exercise. I'm curious if anyone will decide to make a fuss about this and what sort of lengths Amazon would go to appease them.

*James Sime's latest Comic Pimp column is up at CBR and he spins of from last weeks interview into the arena of store display, specifically regarding genre racking. I've gone on about why we genre rack at MacGuffin, but the best advice he offers is this:

Because in my experience re-merchandising your store might very well be hard work, but it's awesome for sales. Even if you decide to just change things back the way they were after a few months. Shuffling your product about keeps it fresh, and keeps people seeing new things they might have missed. And if people hate it, guess what? You can always put it back the way it was and your customers will be twice as happy as they were before you changed things.

The key is to maintain a certain sense of order and familiarity while constantly changing the specific items that the customer sees. Every month or two we switch the order in which faced series are stacked. In other words, Y: The Last Man is faced out on the bookshelf. One month the top book will be volume one, and the next month we'll switch it so that whatever latest volume we have is stock is on top. Couple that with incorporating books into their categories when they come off of the New Release bookcase and each bookcase rarely looks the same from month to month (and when they do we try to alternate those titles that are faced versus those that are spined). Let's face it, our industry trains consumers to frequent the same places at regular intervals and its easy to become so familiar with a store's layout and inventory that it blends into the background. This is another reason that we are considering eliminating our new release wall altogether and racking those titles in with previous week's releases once we have the space to do so.

More Wholesale Concerns

Diamond calls it the F discount and when placing our "weekly" (sometimes twice a week) orders, it is the bane of my existence. F means 45% off of cover price and applies to all sorts of publishers that are popular at MacGuffin (Fantagraphics, AIT/PlanetLar, AdHouse, Top Shelf, and Scholastic's Graphix imprint to name a few). While I'm not a big fan of only a 45% discount for non-returnable product, we can work with it. The problem is that reorder fee. When the discount is only 45% to begin with, losing 3% more to a reorder fee makes it difficult to justify ordering the product non-returnable when it's available from Baker & Taylor for 40% returnable. While returnability isn't worth a significant amount of margin (how much depends entirely on sell-through levels) with sell through in the 90% range it translated into about 3% (although that's more of a back end failsafe than an up front discount). If you do the math, it doesn't make sense to reorder an F discount book from Diamond when it's available elsewhere.

The simplest solution for many of these publishers is Cold Cut. They stock most of these publishers titles, and offer many of them at up to 50% off non-returnable. The problem with Cold Cut is that their discount schedule is entirely dependent on single order totals. Because of MacGuffin's size and our just in time inventory philosophy, we rarely reorder enough from Cold Cut in a single order to clear their $1000 benchmark for a 50% base discount. On top of that, certain titles' discounts are then reduced by 5 or 10% from there (presumably based on the price that Cold Cut has to pay for them).

No matter which of these suppliers we buy from, though, we're going to have Couriers, My Own Little Empire, Blankets, Bone, and Why Are You Doing This? on our shelves regardless. Therefore, the math becomes about finding the best discount possible. Therefore, we order 95% of our stock of Fantagraphics' books from W.W. Norton & Co. (as well as Norton's own releases, like Kings in Disguise and The Plot), Fantagraphics' bookstore distributor. We currently order 45% returnable free freight (better than Diamond on reorders) and will likely be switching to 50% non-returnable in the near future. We're currently setting up an account with Von Holtzbrinck Publisher Services, whose imprint Farrar, Straus & Giroux distributes Drawn & Quarterly's titles to the bookstore market and which has terms similar to W.W. Norton & Co (thanks to the Daves at Secret Headquarters for point us in that direction). In many cases, it's simply beneficial to buy straight from the publishers themselves (or their distribution agents) when dealing with graphic novels.

Last week I said that one of the possible conclusions to draw from the results of that poll (the one that showed that we were in the extreme minority by purchasing nearly a third of our product from book wholesalers and distributors) is that we carry the wrong product. It may be that by not focusing on Marvel, DC, Dark Horse and Image we are making a mistake. It may be that by focusing on graphic novels rather than singles, and comics rather than product lines like cards, games, t-shirts and toys that we are making a mistake. But MacGuffin is a graphic novel shop and as such, it's important that we offer a wide variety of graphic novels.

A better conclusion may be that we're carrying a broader mix of product than those stores that buy 90% of their graphic novels from Diamond, and rather than settling for the terms at which Diamond is offering that product, we're trying to diversify our suppliers in much the same way that we diversify product. I like to think that in our approach, we're simply adjusting to the future before the changing landscape of comics forces us to.

Consigning Casanova

I have to give Image credit, they certainly try to get their books into readers hands. When we first opened (and when any store first opens for that matter) we received free shelf copies of several Image trade paperbacks, presumably on the theory that once we sold one, we would then reorder that title to sell more and Image would more than make up their cost. As it happens, we were already carrying the titles they offered as part of their intro package, but it certainly helps to have additional shelf copies and its a practice that would certainly seem to be a long range benefit to Image.

Now they're offering a special overship program to increase the number of copies of their new "Image Slimline" title Casanova. Essentially retailers can double their initial order without any immediate cost, with all of the overship copies being sold on consignment (i.e. fully returnable to Image and without charge to retailers until after the expiration date for returns passes). This is clearly in direct response to the success of Fell which has sold so well that its first issue has gone back to press 3 times. Image must be expecting a similar result with Casanova and is therefore trying to maximize profits by getting as many copies to retailers up front and as part of the initial print run. It's the same tactic that DC is employing with 52, though without the threat of no reprints and no immediate trade paperback collections. It's programs like this (assuming retailers take advantage of them) that allow retailers to set aside fears of being stuck with unsold overstock and create the potential for both retailers and publishers to grow sales. DC did a similar promotion when V for Vendetta was released and are continuing it with certain titles as a tie in to Superman Returns.

More progressive programs in which publishers assume a small percentage of additional risk with the potential for significant returns can only help the industry's overall help and possibly convince retailers to take a few chances of their own with the additional revenue.

Meanwhile, Jog chimed in with an early review of Casanova that seems to support Image's faith in the title.

Lost Amid the Shelves

Myopic retailers drive me nuts. I mentioned the other day the fact that many retailers have reacted poorly to Top Shelf's decision to sell Lost Girls signed by Moore and Gebbie direct to consumers via their website, viewing it as a supplier and theoretical partner turning into a competitor and "stealing" sales from the direct market stores that support that publisher the most. Nevermind the fact that just about every comic publisher outside of Diamond's four brokered publishers sell direct to consumers via their website. Dave Sim did it for years with Cerebus (and continues to do so) because he, like Top Shelf, understands that their product is only carried by a select number of retailers. They can reach a much larger number of potential customers selling direct via the web or mail order, something that Top Shelf clearly understands since they offer nearly their entire catalog for sale via the web already. This isn't an example of Top Shelf making a product available exclusively through a single retail outlet that theoretically operates in direct competition with direct market stores (i.e. a chain bookstores). There was never any inherent right for direct market stores to carry this product and no single retailer is being given an advantage over others.

The only reason that a comic retailer even believes they should be entitled to sell this book in the first place is because to a large degree we're still stuck in a collector's mentality where selling a signed edition of a book is not an unusual practice. How many signed copies of The Da Vinci Code have you seen at Borders? There may be independent bookstores that specialize in that sort of collectible, but they rarely purchase such a product directly from a publisher, and is that even the model that we want to base our industry's growth on?

Could some retailers benefit from selling this book? Absolutely, we're talking about a product which would make a store roughly $67 per copy sold. Yet, Top Shelf loses more than half of their profit by utilizing that method of delivery. I would wager that the only reason Top Shelf doesn't sell every title they publish exclusively via their website is that they realize that by doing both they can reach an even larger number of customers than either method of exclusively offering the product would allow. Since, in general, any publisher's goal is to sell as many copies of every book they publish as possible, it makes the most sense to offer as many means of access to that product as possible. In the case of a limited edition, though, it's a matter of determining how many copies will sell via whatever channels are available and determining the most profitable print run and manner of fulfilling demand. Top Shelf, rightly or wrongly, determined that there was demand for 500 copies of the signed edition if sold via the web.

Because of the enormous risk involved in this project, Top Shelf apparently did not feel that there was enough demand in the direct market to support enough copies so that the more limited profit they would see via that channel would be worthwhile. It's entirely possible that they worried that direct market stores would "steal" some of their internet sales and cut into the profitability of the limited edition (which they state up front made financing the regular edition possible). Certainly there may have been other alternatives, but I doubt that Top Shelf felt they were as advantageous. While I'm sure they understood that many retailers would be upset by this decision, I think they also anticipate that those retailers are smart enough not to stop carrying books that sell (seriously, is any semi-intelligent store owner who can sell From Hell or the next League of Extraordinary Gentlemen going to cut orders on those books in retaliation?).

There is something of an ancillary argument that is brought up in conjunction, namely that small publishers like Top Shelf cut into stores' sales when they sell direct to readers at conventions and that this likely will happen at San Diego Comic-Con. Seriously? I'm sorry, I'm just not worried that someone is buying at a convention instead of at my store. Now, if I'm running a shop in San Diego, sure there may be a legitimate concern there. But for a company to turn away people who are waving money in there faces and tell them to drive 15 minutes down the road to buy their books, well that's just not smart business. Rather than kicking and screaming, it would seem to benefit a store much more to partner with these publishers to promote the local shop as a place to find other books by that publisher.

For retailers to scream that we're being screwed over assumes that we're owed something here. Apparently, just because we support Top Shelf's titles, we deserve a cut of Top Shelf's profits from this limited edition. While I understand that Top Shelf has asked for help from retailers to avoid bankruptcy in the past, that's really not much more than another sales gimmick, albeit one that plays on personal preferences and sympathy rather than economics. Since we fell for it, apparently we're now owed some charity in return.


Sorry for the tangent, more on Wholesale Concerns is coming.

Wholesale Concern

The results of an incredibly informal poll recently indicated to me that MacGuffin is either on the right track in our approach to the industry or we've shot completely off the rails. This poll showed that we are in the extreme minority in our use of book wholesalers like Baker & Taylor and Ingram as a significant inventory resource.

It's not that using book wholesalers is particularly uncommon among comic shops (though fewer than half probably have anything other than a Diamond account). What I was somewhat astounded to see is that a large majority of comic shops (at least as represented in this poll) use book wholesalers for less than 10% of their graphic novel and trade inventory. Not total inventory, just for their graphic novel and trade inventory. That means that they're buying non-returnable from Diamond and presumably Cold Cut for over 90% of their trades and graphic novels. As a comparison, just under 20% of our TOTAL inventory and almost a third of our graphic novels are purchased from book wholesalers and distributors. Clearly we're way out of proportion with much of the industry.

The half empty reason for this is that we're carrying too much of the wrong product and forfeiting too much margin for returnability. To address the issue of whether we're stocking the wrong product first requires a look at product mix, availability and margin.

I've talked before about the importance of variety at MacGuffin. I've seen the argument (in fact, Marvel makes it all the time when explaining why so many X-Men and Spider-man titles and why those get the biggest marketing push) that focusing product mix on what you know sells rather than taking chances is the smartest way to maximize profits. Which is, of course, completely stupid. Imagine if DC and Karen Berger hadn't taken a chance on publishing a decidedly non-superhero book by Neil Gaiman. I'd be out one of my best sellers that's for sure. That's not to say that stores should ignore what sells, but it is important not just to the philosophy of the store but also to our financial health and growth to carry a wide product mix. In the last week we have sold the following trades/graphic novels: Alias, Age of Apocalypse, Archie Americana, Forgotten Realms, Hellboy, an entire set of Naruto, Books of Magic, North Country, The Plot, Watchmen, Losers, Boondocks, Cry Yourself to Sleep, an entire set of Alan Moore's Swamp Thing, ALIEEEN, and Sandman: Endless Nights among many, many others. Just typing that list brought a smile to my face. But how I'm supposed to use a list like that to winnow out those books that don't sell I don't know. Now, if I've ordered a book and it sits on the shelf for a year without moving, that's another story altogether. Even so, when it is finally purchased, that doesn't mean that it's automatically not reordered. Our sales growth indicates that it helps that we don't carry just what other people/stores/companies tell us will sell. Instead, it helps that we take chances to find new product that will fit well within our market. Our product mix becomes particularly important when the issues of availability and margin are considered.

I've talked before (here and here) about how Diamond simply does not stock Understanding Comics. Completely ridiculous, but there you have it. If we want to stock it, we have no choice but to go to another distribution channel. There are occasions when it is available from Cold Cut, but not often and even then the best terms possible are 45% non-returnable with 90% free shipping. Meanwhile both Baker & Taylor and Ingram have it in stock at 40% returnable and free shipping. This is a bestselling title that we feel is important to have available as many days of the year as possible. For example, an employee at another area comic shop (roughly 25 minutes away) had heard about us and decided to stop in. After looking around the store for a few minutes he about exploded when he discovered Understanding Comics in our recommended section. He'd been looking for it for quite awhile but could never find a shop that had it and couldn't believe we had it in stock. After another ten minutes or so he left with two other graphic novels, one of which was also unavailable from Diamond. Anything that we believe will sell but that we can't get from Diamond (which often includes material from their brokered publishers that Diamond is simply out of stock on, i.e. Planetary: The Fourth Man up until about 2 weeks ago) will still find it's way onto our shelves. As I've said on may occasions regarding suppliers: availability trumps all.

Then again, Understanding Comics probably wouldn't sell particularly well for Diamond if they did carry it, since they'd almost certainly be offering it at a 40% discount non-returnable. Why is this you ask? I'm not privy to the specific mechanics of the system, but traditional book publishers like Hyperion, Pantheon and Ballantine as well as comic/graphic novel publishers that are distributed primarily via the book trade (i.e. Drawn & Quarterly and First Second) are limited to 40% in their Diamond discount. This is one reason that Flight's shift from Image to Ballantine will likely mean that it does fewer unit sales (if not necessarily fewer dollar sales) via the Direct Market than the first two volumes. Then again, the title will also likely find more exposure in bookstores than it had when published by Image.

Then there is the issue of reorder fees. For every publisher distributed by Diamond through the Direct Market with the exception of the four brokered publishers, Diamond charges a 3% reorder fee as some form of penalty for not taking a deeper initial inventory position on that publisher's titles (in reality Diamond charge this fee for every reorder, but the four brokered publishers pick up that fee themselves because they understand how much it helps their orders). So, were we to order Maus from Diamond, we would pay 60% of retail ($8.40) if ordered through our monthly Previews order (which is nearly impossible since it is offered only roughly once a year through Previews) or 63% of retail ($8.82) if ordered as a reorder. Both of those prices are plus shipping, which generally works out to about 2% of retail. Meanwhile, if I order Maus from Baker & Taylor it costs 60% of retail ($8.40) with free shipping. Toss in returnability (which plays just about zero factor in the case of Maus because it's both important for us to carry and sells well enough to be worth the shelf space) and there is less than zero reason to order Maus from Diamond unless everywhere else is sold out. This is true of essentially every book published or distributed by a traditional book publisher, whether it's Persepolis, Black Hole or the new volume of Flight.

Where this gets a bit trickier is the nebulous 45% Diamond discount where such publishers as Fantagraphics, AIT/PlanterLar and Scholastic's Graphix imprint (i.e. Bone and Babysitter's Club) reside.

MORE TO FOLLOW

Wizards Magically Appearing on Invoices

Tomorrow MacGuffin will receive the Wizard Magazine 2006 Mega Movie Collector's Edition, a title we did not order because it was not announced until two weeks ago. Generally in this situation, the product is included in the Diamond Dateline, a weekly newsletter that all retailers receive from Diamond updating product information. This is how we learned how to order the Superman/Batman FCBD book since it was added to the promotion after the event. The problem with Diamond Dateline is that there is so much extraneous information and outright advertising (no, not in a Diamond product, never) that it's easy to miss the details and several stores failed to order any copies of the Superman/Batman FCBD book as a result. Wizard (and presumably Diamond) felt that rather than risk the same thing happening with their extra special movie issue, they would simply send retailers however many copies we had ordered of the last issue of Wizard. They did that same thing with last year's movie issue and were absolutely blasted by retailers, so this year they will allow the issue to be returnable and will not charge retailers for any copies until after the returnability window is over. Johanna Draper Carlson broke down the details shortly after the issue was announced to retailers and pointed out the major flaw with this practice, namely the principle behind it.

This is another example of publishers and Diamond not treating retailers as partners or even customers but rather as sales agents. My job is not to promote any single company except MacGuffin (ignore for a moment all of my First Second posts please). When Bob Wayne indirectly blames retailers for the limited growth of the OYL titles, he's essentially saying, "sorry about that, our sales reps weren't paying attention, but don't worry we'll make sure we print up enough to take care of those of you they forgot about." By sending retailers these issues without any prior agreement on our part, Wizard is essentially saying, "we understand the market better than you and believe that you can sell as many copies of this movie issue as you can of a regular issue of Wizard." In both instances retailers are treated more like employees of those publishers than customers.

Yet, retailers would have gone nuts had Wizard chosen to distribute this issue solely to their newsstand market (where it's likely to have more traction anyway). How do I know this? Because the outcry has already begun about Top Shelf's decision to sell the limited edition autographed copies of Lost Girls directly to consumers via their website (and likely directly to consumers at the San Diego Comic-Con as well). Nevermind the fact that this particular book is particularly risky for Top Shelf and such a practice will likely allow them to at recoup enough costs to avoid going under entirely. If the books sell like mad, then sure it was an unnecessary decision to cut out an important part of the sales chain. But at the same time, there are many, many direct market stores that will not carry this particular product signed or not. Now imagine if Wizard had distributed a much more "mainstream" product directly to consumers and via other channels while excluding the direct market entirely. There would be calls for a boycott of Wizard altogether (not that I'm saying that's a bad thing).

What this boils down to is that we, as retailers, like to complain whenever a sales situation is set up that doesn't conform to our preferred methods. At the same time, we as retailers have the smallest individual voices in the industry and are therefore often in the weakest financial position.

Quick Hits FCBD Edition

Now that Free Comic Book Day has passed and I've been able to get some sleep, time for a few thoughts on the event as a whole:

*By far the best promotion for the event was our school contest -- the schools that sent in the most students receive $150 in graphic novels for their library. At least half of our visitors signed in as part of the contest, nearly all of whom were unfamiliar.

*The total number of visitors was about what I had anticipated (maybe a few less) but I ordered enough books for between two and three times as many visitors as I had expected so we have extras to use as promotional tools for quite awhile (first up is to send a few copies of several titles to each school library that had students participating in the event at MacGuffin).

*The most disappointing result was the way that traffic completely died after about 5:00. We had only a dozen or so more visitors after that point. To make matter worse, inker Marc Deering had offered to spend a few hours at the store that evening after finishing up an appearance at another store. He was a great sport about it, but I was disappointed that more people didn't get a chance to meet him and see his work.

*Something of a corollary to the above, I was surprised how few regulars came out for the event. We did have a few Reserve members and a few others who come in on at least a bi-weekly basis, but I was expecting to see quite a few faces who didn't make it in. Still, the purpose of the event was to expose new people to comics and promote the store to them, and it was effective at doing that.

Finally, I'd like to mention the issue of limits on free comics for this event. From the largely informal research I've done, it appears that a majority of comic shops set a limit on how many free comics each visitor can get. That limit varies widely with some shops only allowing visitors to choose a single free comic (pointing out that the day is Free Comic Book Day, rather than Free Comic Books Day). More common is a limit of 3 to 5 books per person, which is fairly reasonable, and seems even more so in a shop that is only offering the 10 Gold Sponsor Books. Several forward thinking shops, though, create gift bags with all of the Gold Sponsor books that every person gets and then allow the visitor to choose 2 or 3 additional books from among the Silver Sponsor titles, as an example (for those curious, the Gold Sponsor books are almost universally less expensive than the Silver Sponsor books).

At MacGuffin, the only restriction we enforced was a single copy of each title per person. We had all 29 free comics available (the most popular was Superman/Batman) and allowed each person to take up to 29 with them. This is of course the reason that I ordered almost three times what I anticipated demand for, because had we been swamped, there may have been a shortage. The only way that we would have considered limiting the number of comics each person could have is if we began to run out, and the plan at that point was to use the stacks of overstock we have from the first few months we were open.

We had several customers tell us they felt guilty taking so many books, but as I reminded them, that's the point of the day and really of MacGuffin. Our goal is to expose as many people as possible to as much variety as possible and to limit the availability of such inexpensive promotional materials would be incredibly counterproductive in achieving that goal. Therefore, if you visited another shop on Free Comic Book Day and weren't able to get one of the titles you were interested in, stop into MacGuffin and we'd be happy to let you have a copy of whatever title you missed out on. And for those of you who came by on Saturday, thank you for making the day such a success.

FCBD Free For All (Seriously, They're Free)

In case you hadn't heard, Saturday is Free Comic Book Day, a first for us here at MacGuffin. You may recall that I spent quite a bit of time breaking down how we had ordered books for FCBD (part 1, part 2). Well, those books are ready to be picked up on Saturday starting at 11:00 in the a.m. and running until roughly 9:00 that evening. As a refresher, we'll have the following available (while supplies last of course -- which should be for the next several months):

Archie Comics 65th Anniversary Bash
Free Comic Book Day Bongo Comics Free- For -All!
Star Wars/Conan Flip-Book
Justice League Unlimited # 1
GI Joe Sigma 6 #1
Disney Comics Presents: Donald Duck
The Transformers/Beast Wars Special
Image Future Shock
X-Men/Runaways
Tokyopop Sneak
The Preposterous Voyages of Ironhide Tom!
Arcana Studio Presents # 3
Worlds of Aspen # 1
Jack the Latern 1942
Soulsearchers & Company / Deadbeats Flip Book
Comic Genesis: Generations 2006
Mr. Jean
Funny Book # 2
Impact University Volume 2
Liberty Girl # 0
Keenspot Spotlight 2006
Bluff & Tales from a Forgotten Planet
Free Scott Pilgrim
Owly: Breakin’ the Ice
Amelia Rules!
Buzzboy: Sidekicks Rule # 1
Viper Comics Presents: Dead @ 17 & More
Wizard Presents: The Top 100 Trade Paperbacks of All Time

Having looked through them, I was particularly impressed by Mr. Jean, The Preposterous Voyages of Ironhide Tom!, Free Scott Pilgrim and Owly: Breakin’ the Ice. Good books for showing the diversity of comics (though not necessarily all ages appropriate). Most of the books are fairly successful as sales tools for new readers. What they're not quite as effective at is turning regular readers onto something new (though I do think the four I listed above will be fairly successful for that). Marvel's X-Men/Runaways is nice sales tool but suprisingly, the main story is probably the weakest element.

Quick Hits 5/3

*Johanna Draper Carlson had some thoughts on Bob Wayne's interview with Newsarama and puts them in the context of the great format debate. As I've said, in general I believe that form should follow content except in special circumstances, but Marvel and particularly DC seem to have decided that they're going to make a push back to the periodical nature of comics. Which of course leads back into "collecting" comics and coupled with the overwhelming number of variants that we're seeing its a slippery slope back into speculator country. As an example, I had a customer come in today who wanted to buy every copy we had on the shelf of both Infinite Crisis #7 and Civil War #1 (not to mention a couple of people who wanted both covers of Infinite Crisis).

*It's difficult for small press publishers to make an impact on the direct market. They're usually either one or two person operations that can't afford to put much money or even time into promoting themselves and end up taking a build it and they will come strategy. Which often leads to missing Diamond's minimum benchmark and getting cancelled. The other strategy is often to launch big and make enough of a splash to convince consumers that they should give these guys a try (Alias and Speakeasy anyone). Which often leads to segmenting their potential sales, late shipping books and a messy implosion. So it was unusual to see Superverse Comics get orders at over 20,000 copies for the first issue of Zoom Suit (for the month of March that would have ranked just outside the Top 100 and in the same ballpark as Ex Machina, and Thing). What they did was develop an enormous promotional push including an animated short, preview copies and the ever popular variant covers. The smartest thing they did, though, was offer the first issue to retailers at 75% off of retail price. That's enough to get any retailer that's paying attention to take some sort of chance on the book. The question now becomes, how will it sell through? The reviews are mixed (Graeme at the Savage Critic(s) was not much of a fan, Silver Bullet gave it a thumbs up) but at MacGuffin, we have yet to sell a copy (Mike at Progressive Ruin has seen a similar response). It's only been a week, but Mouse Guard sold five copies its first week.

*Since I tend to give Diamond a hard time (and they tend to deserve it) I should mention that they corrected a mistake in time to avoid it causing me any damage. Our order of the Star Wars/Conan FCBD book was somehow replaced by several hundred Previews Consumer Order forms for the month of May. I notified them and they had those copies air mailed to us two days later at their cost. Considering how time sensitive an issue it was I appreciate the effort they made to make sure I would have these available on Saturday. On the flip side, though, an incredibly indy friendly store in a major metropolitan area was shorted its entire order of D&Q's Mr. Jean FCBD book (which would likely be one of the books that most appealed to their clientele). Diamond was unfortunately unable top replace that stores copies because they had no more on hand (we were actually shorted about 10 copies of it, but not enough to make a huge dent). It must be difficult when dealing with the type of volume Diamond deals with when filling FCBD orders, but it's unfortunate that a store that would benefit so much from a Silver Sponsor book may not have any for FCBD.

Introducing First Second

In honor of their launch tomorrow, our supersized all things First Second Post:

The Books:
A.L.I.E.E.E.N.
Deogratias: A Tale of Rwanda
The Fate of the Artist
The Lost Colony
Sardine in Outer Space
Vampire Loves

The Previews:
First Second @ The Beat
First Second @ Comics.212.net
First Second @ Feeding Change
First Second @ ICV2
First Second @ MacGuffin
First Second @ Panels & Pixels Part 1
First Second @ Panels & Pixels Part 2
First Second @ Sequart

The Reviews:
First Second Catalog @ The Great Curve
First Second Catalog @ MacGuffin
A.L.I.E.E.E.N. and Sardine @ Chris's Invincible Super-Blog
A.L.I.E.E.E.N. @ achukareviews
A.L.I.E.E.E.N. @ The Trades
A.L.I.E.E.E.N. @ Booklist, Kirkus Reviews & Publisher's Weekly
Deogratias: A Tale of Rwanda @ Four Realities
Deogratias: A Tale of Rwanda @ MacGuffin
Deogratias: A Tale of Rwanda @ Precocious Curmudgeon
Deogratias: A Tale of Rwanda @ Booklist, Kirkus Reviews & Publisher's Weekly
Fate of the Artist @ achukareviews
Fate of the Artist @ Jog the Blog
Fate of the Artist @ MacGuffin
Fate of the Artist @ Booklist & Publisher's Weekly
The Lost Colony @ Focused Totality
The Lost Colony @ MacGuffin
The Lost Colony @ Booklist
Sardine in Outer Space @ Armchair Interviews
Sardine in Outer Space @ Beaucoup Kevin
Sardine in Outer Space@ The Trades
Sardine in Outer Space & Vampire Loves @ MacGuffin
Sardine in Outer Space @ Booklist & Kirkus Reviews
Vampire Loves @ Armchair Interviews
Vampire Loves@ The Trades
Vampire Loves@ Booklist & Publisher's Weekly

The Interviews:
Booklist with Mark Siegel
The Comics Reporter with Mark Siegel
Publishers Weekly with Mark Siegel
Flipped with Alexis Siegel
The Pulse with Eddie Campbell

If I've missed anything, please let me know. If not, come in tomorrow and take a look at this great collection of books.