An insiders guide to comic/game shop retail, part two

So having spent far longer setting the scene and outlining my background than I had intended let’s get down to the nitty gritty.

Comic shop stock ordering is a strange beast.

Other retail markets work by generating interest - through shows, advertising, sales representatives, promotional tie-ins, etc. They then manufacture product based on projected interest and the cheapest trade off between production run and projected sales. Then they take and fulfill orders on said products. If demand is high they do further production runs as deemed appropriate.

From natural yoghurt to natural pine furniture this is pretty much true. Some industries however, prefer to work solely on pre-orders. Special edition sports cars for example.

Comics now work in a similar way. A process called the Direct Market. More on that shortly. First, where did this system come from?

Prior to the Eighties, comics were primarily bought in the US from newstands, drugstores, local supermarkets, toy stores, etc. Comics were printed based on previous issues’ circulations. Unsold copies could be ‘stripped’ (the front cover removed as proof of the item’s unsold status, the rest of the comic would then be binned) and returned to the publisher for credit. This still goes on for books and magazines in places such as WHSmith or your local newsagent.

This was all handled by local newspaper/magazine distribution companies. It was a good system in many ways - comics were accessible all over the place in the US and the retailers could do so with little risk, but the profit margin was slim, perhaps only 20%.

In the Eighties, Phil Seuling (organizer of the annual New York Comic Art Conventions) approached the big comic publishers and proposed to purchase comic books directly. These books would be sold at a lower unit cost, but would be on non-returnable, ‘firm-sale’ terms.

Seuling’s method expanded and more specialist shops began to follow this route. Soon the publishers were producing material just for the Direct Market - more obscure characters would get their own miniseries for example. By soliciting a book in advance of publishing, the big companies could take pre-orders and then print only what was ordered rather than the risk of printing based on previous circulation figures.

In time, the newstand market declined and the Direct Market grew giving rise to several dedicated Direct Market distributors. I will gloss over the business that went on behind the scenes but ultimately Marvel tried to snag a bigger piece of the pie by signing an exclusive distribution deal with Heroes World, one of the major Direct Market distributors. Heroes World would only carry Marvel books and Marvel Direct Market books could only be purchased through Heroes World.

In response, DC, Dark Horse, Image and many of the smaller comic companies signed similar exclusive deals to Diamond Comic Distributors. Suddenly Direct Market comic shops had to open accounts with two or more different distributors to stock the full range and almost all the smaller Direct Market distributors went bust or were bought out by Diamond including their main rivals at Capitol City Distribution.

Marvel ultimately decided that self distribution through Heroes World (now incorporated into Marvel) wasn’t working and they too signed with Diamond. This effective monopoly remains in place today and was investigated as an antitrust from 1997 to 2000. It was closed with no further action because it was decided that whilst Diamond enjoyed a monopoly on North American Direct Market comic distribution, they did not have a monopoly on book distribution.

Translation, comics are too niche for the U.S. Department of Justice to bother with. Sigh.

In the UK we are also in a Diamond stranglehold. In the Eighties, we had Titan Comic Distribution and Neptune Distribution. Titan grew out of Comic Media Distributors and was part of the same company that opened Forbidden Planet in London in 1978.

Neptune grew too fast and expanded into publishing as Trident Comics. Ultimately the whole company was sold to Diamond.

Soon after, Titan decided to refocus on book publishing and expanding Forbidden Planet into a nationwide chain, so they sold the distribution arm of Titan to Diamond.

And what does this mean for you, the comic shop customer?

Well, because Diamond enjoy a massively dominant market share, they have no need to give great customer service. So deliveries are often late, short, damaged or otherwise rubbish. Retailers can complain but only to a point, knowing that they have no other way to get stock and so have to keep Diamond sweet.

This system is almost worse in the UK, where the shared feeling amongst smaller comic retailers is that because many of the higher up employees at Diamond UK are former employees of Titan, Forbidden Planet gets preferential treatment. Whether this is actually true, or if it is simply a reflection of the fact that the two Forbidden Planet chains probably have the largest accounts with Diamond UK is a matter for debate.

Ultimately it is frustrating. Comic shop owners/managers will receive Previews catalogues in the last week of the current month. They have until about the third week of the following month to draw up orders and place them with Diamond.

For the bigger publishers, these figures are then relayed to them some six weeks before the comics will hit the shelves (known as the FOC or Final Order Cutoff) and print runs are produced accordingly - often with some extra copies to cover restocks, but not always. Retailers can add further guaranteed copies to the order up until a title’s FOC, then after that it’s pot luck based on restocks. Other, smaller companies get their figures almost straight away, allowing the retailers no time to increase their orders.

This means that when you see issue #1 of a comic on the shelves - orders have already been placed for issue #2! And the figures for #3 are about to be sent in, if they haven’t been already. So retailers must place orders for up to the first three issues of a comic without knowing how well issue #1 sells! Many cope with this by ordering say 10 of #1, then cutting it to 5 for #2 and 3 or less for #3, hoping that they can get increases in before the FOC. Remember, a Direct Market retailer who has stock left on the shelves is stuck with them - they usually cannot get a refund.

If every comic enthusiast bought a copy of Previews each month and placed orders based on what they like in that month’s catalogue, retailers would have things a lot easier. But most people seem to forgo Previews these days. Instead they place orders for #1 maybe the week before or pick up #1 then add the rest to their reservation, not realising they may not get issue #2 if luck is against them.

Reservation customers are a blessing though. A customer who wants the same title every month gives a retailer almost guaranteed income and makes it much easier to gauge how popular a title is. If the creative team on a comic changes, retailers can see a massive drop or in turn a large increase in copies required. Difficult when orders were locked between three months or six weeks before the comic’s release date.

It is also disheartening to a retailer when a customer cancels his or her order. The shop has between 2 or 3 months worth of comics on order for that customer that may well be impossible to cancel. Suddenly the shop has instant negative equity moving forward unless someone new picks up those books.

All in all, the Direct Market is a mixed bag. It does give higher profit margins on comics than the magazine distribution model, but it comes at the price of a higher risk and a need to be a little bit cliarvoyant when it comes to placing orders.

I’ve been placing Previews orders myself for almost 3 years consecutively now and whilst I have a better insight into what can happen, you can never get it perfect.

Perhaps if people understand the inner workings of the process, it will be easier to understand why sometimes you have to wait whilst I source your missing issue of Captain Britain #2 from somewhere else!