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.


Post a Comment

<< Home