Cutting in the Middle Man
Cold Cut Distribution has revamped their discount structure so that all orders now fall under a flat discount rate ranging from 40% to 50% off based on publisher. For those who were unfamiliar with Cold Cut's previous discount structure, here's a brief summary:
Discount was based on the amount of product ordered. Up to $500 retail was 40% off, up to $1000 was 45% off, up to $2000 was 50% off and anything over $2000 was 50% plus a 90% shipping rebate.
Within these discounts, however, each title also had a discount structure. All titles were labeled A, B, C, E, F, G or N discount. The 3 primary discounts were A, B and C which corresponded to Base Discount, Base Discount - 5% and Base Discount - 10%. Which meant that, on an order of $400 retail, a C discount book was only 30% off (base discount of 40% - 10%). The theory was obviously to entice shops to order more to reach that next discount plateau, but the overall effect was to limit the number of customers Cold Cut was drawing on. It's simple math to determine that increasing orders for the sole purpose of reaching a new discount plateau is almost never worth it.
The old system was incredibly confusing and difficult to manage for smaller stores and seemed as though Cold Cut was trying to compete with Diamond for orders. In reality, that's no competition because of the convenience offered by Diamond. With this new discount structure, Cold Cut becomes an alternative resource for retailers employing just in time inventory strategies to replenish their stock by offering plenty that of product that Diamond can't but also offering it at as good or better prices.
Business wise, this seems to be an incredibly smart move from the outside looking in. First, it likely has almost no effect on the biggest accounts because the majority of those were on rolling terms wherein they received 50% as a base discount and worked from there. The A, B and C level discounts corresponded almost across the board to the same titles that are now 50%, 45%, 40% discounts respectively. Therefore, unless I'm misunderstanding their new terms, the only thing that Cold Cut is really doing is leveling the playing field in an attempt to get more orders from smaller stores that were reluctant to start with a base discount of 40-45% and work down from there.
Hopefully there will be a concerted effort by Cold Cut to advertise this beyond a news release on one or two comic news websites. The new discounts should appeal to quite a few smaller shops that were unwilling to buy some product non-returnable at a 35% discount yet were unable to get the product anywhere else. Or (as in the case of MacGuffin) if a store orders direct from the publishers Cold Cut can offer similar terms, making it possible for the retailer to combine several orders from different publishers into one order and save on shipping if nothing else.
This move can help smaller stores diversify, hopefully strengthening themselves, Cold Cut and the direct market in the process.
Discount was based on the amount of product ordered. Up to $500 retail was 40% off, up to $1000 was 45% off, up to $2000 was 50% off and anything over $2000 was 50% plus a 90% shipping rebate.
Within these discounts, however, each title also had a discount structure. All titles were labeled A, B, C, E, F, G or N discount. The 3 primary discounts were A, B and C which corresponded to Base Discount, Base Discount - 5% and Base Discount - 10%. Which meant that, on an order of $400 retail, a C discount book was only 30% off (base discount of 40% - 10%). The theory was obviously to entice shops to order more to reach that next discount plateau, but the overall effect was to limit the number of customers Cold Cut was drawing on. It's simple math to determine that increasing orders for the sole purpose of reaching a new discount plateau is almost never worth it.
The old system was incredibly confusing and difficult to manage for smaller stores and seemed as though Cold Cut was trying to compete with Diamond for orders. In reality, that's no competition because of the convenience offered by Diamond. With this new discount structure, Cold Cut becomes an alternative resource for retailers employing just in time inventory strategies to replenish their stock by offering plenty that of product that Diamond can't but also offering it at as good or better prices.
Business wise, this seems to be an incredibly smart move from the outside looking in. First, it likely has almost no effect on the biggest accounts because the majority of those were on rolling terms wherein they received 50% as a base discount and worked from there. The A, B and C level discounts corresponded almost across the board to the same titles that are now 50%, 45%, 40% discounts respectively. Therefore, unless I'm misunderstanding their new terms, the only thing that Cold Cut is really doing is leveling the playing field in an attempt to get more orders from smaller stores that were reluctant to start with a base discount of 40-45% and work down from there.
Hopefully there will be a concerted effort by Cold Cut to advertise this beyond a news release on one or two comic news websites. The new discounts should appeal to quite a few smaller shops that were unwilling to buy some product non-returnable at a 35% discount yet were unable to get the product anywhere else. Or (as in the case of MacGuffin) if a store orders direct from the publishers Cold Cut can offer similar terms, making it possible for the retailer to combine several orders from different publishers into one order and save on shipping if nothing else.
This move can help smaller stores diversify, hopefully strengthening themselves, Cold Cut and the direct market in the process.
posted by Sam Hobart at 3:54 PM
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