Comic Book Stores – Could Marvel Comics End Up Being Closed Down by Disney? – Part 4 of a Series

While I had planned a more orderly presentation of the different aspects of comic books stores and the comic book industry in general; there was a recent article mentioning the possibility that Marvel may end up no longer publishing comics.

While the comic book industry has been in the middle of a multiyear decline, in spite of the success of many comic book characters in a number of movies, comic books themselves have been in the middle of a gradual decline spanning multiple years. Some things are not in the control of anyone related to the industry, but there are parts of the decline that are within the control of the various stakeholders.

In general, over the decades, comics have always had boom/bust cycles, especially after the whole distribution model changed from drugstores, supermarkets and book stores around the late 1970s/early 1980 to dedicated comic book stores, as they are today.

While Diamond Comics Distributors Inc (hereafter referred to as Diamond) does not usually publish the number of comic book stores it has as customers, as far as I can tell, at the highest level, probably in the middle of the 1990s comics book boom, there were about 22,000 comic book stores. In recent years the last Diamond ‘official’ number of accounts with Diamond was put out at around 4,200 with 2,200 being comic book stores. (The non comic book store accounts are ‘entities’ that are buying comics through an account with Diamond but they do not have retail store.)

Over the many years I have been discussing the comic industry with people, is that it was generally believed that no matter what happened, the publishers and Diamond would always stay in business as long as they right sized their organization for the level of business they had. Since most comic book sales are the result of orders in advance by customers through stores, it should be very possible for publishers and Diamond (the one and only distributor of comics) to properly size their businesses and keep operating. Individual comic book stores have a problem in that customers may order comics and then not pick them up, leaving the store stuck paying for comics that end up sitting in inventory forever and costing the store money.

Over the years I have been part of a number of discussions about if there was some ‘lower limit’ on comic book sales that could or would cause something to happen that would bring an end to comic books in the United States.

One speculation, especially during the financial crisis of 2008/2009 was the possibility of Diamond failing. Diamond is the only comic book distributor left in the United States so its failure could be the end of the comic book industry, or at least a big financial hit to publishers and comic book stores. Without Diamond there would be no way for comic book stores to get their new comics, and publishers would have no way to sell to the vast majority comics to their customers. In such a scenario, it would be easy to see how a lot of comics book store and publishers could all go out of business. It was rumored for a number of years that DC was so worried about the effect of a failure of Diamond on the industry that it had some kind of agreement of understanding with Diamond that if it ever was in danger of failing, and being unable top operate, that DC would have the first right to take over Diamond and continue to keep the distribution operation going.

A recent article at comicbook.news (DISNEY SHUTTING DOWN MARVEL COMICS? : https://cosmicbook.news/disney-shutting-down-marvel-comics , March 1, 2019 ) talks about recent rumors that Disney may close the Marvel (Marvel is a division of Disney, trading under the stock symbol DIS) comics division because of a continuing drop off in volumes and revenue. While it is not clear from the financial reports of Disney just exactly what the revenue is for the comics or if Marvel comics makes a profit or not, because comics are grouped in with other Marvel revenue in the quarterly reports. It does sound like more and more people are under the impression and belief that Marvel comics is losing money, has been losing money for a while, revenue continues to fall, and there is serious speculation about Marvel not publishing comics anymore.  

Within the same time period, IDW Media, the third largest comic book publisher, appears to be having its own set of problems. IDW Media is a publically traded company under the stock symbol IDWM. Its stock closed today at $25.75, down around 50% from its 25 week high of $53.99. Last summer there was an unusual capital raising done that looked like, to me, done to raise cash and keep the company operating. To me this lends credibility to this belief that the comic industry is having serious problems, in general. In addition, BleedingCool.com reported on March 5, 2019 that investors sent an open letter to IDW Media calling for the company to be sold.

(IDW Media Holdings Investors Call for Sale of Company in Open Letter

https://www.bleedingcool.com/2019/03/05/idw-media-holdings-investors-call-for-sale-of-company-in-open-letter/ March 5, 2019)

Here are some of the comments, posted with the first artilce, that I found alarming from the first article, Disney Shutting Down Marvel Comics?, were are follows, along with my comments on those comments:

1: ” Too bad Marvel’s deplorable business practices are killing the comic shops that kept them going all these years.

I’m done with the Big Two. It’s indies and creator-owned for me as has been for over a year now. If Marvel wasn’t putting out such miserable crap, and insulting and attacking its own customer base, maybe it would be in a better spot, but most of the creators they employ these days are worthless hacks, so…”

This commentator clearly thinks that Marvel is partly responsible for the sales declines, which also have been hurting (killing?) comic book shops.

2: If Quesada actually thinks the mouse is going to subsidize Marvel’s garbage tier work while it runs an endless deficit, because it somehow ‘inspires’ the MCU… he’s delusional. The last time Marvel made comics that were coherent, much less entertaining enough to feed into the movies, was almost ten years ago now.”

3: “It’s time for the comics industry– and Marvel in particular– to clean house. FIRE these obnoxious scolds who spend all their time antagonizing the company’s long time customer base with their endless identity politics. Stop all the scams on comic book retailers. Get some legitimate editors. Cater to the actual customers again.”

This commentator believes that identity politics has ruined the product. The ‘scams’ this commentator refers to I believe are promotional items like variant covers, or requiring stores to have certain minimal orders in order to get special limited items. The problem is the minimums are so high that usually it is impossible to sell enough to at least recover the stores cost, leaving the store with unsold inventory and losing money on the promotion.

4: ” Marvel floods the market with new #1s and a million variant covers to get that sweet #1 spot with Diamond every month so they can show their masters at Disney that “We’re still number 1. See?” It’s a bluff. It’s always been a bluff. These #1s sit on shelves collecting dust while a “Second Printing” is announced because they “sold out” at Diamond.

There has been some considerable speculation over the past few years that at times Marvel has been printing and sending out for distribution comics that no one ordered. The theory under this idea is that Marvel prints and sends out product that no one wants because it is able to report to the higher ups at Disney what their print runs are, and look better by doing such antics. Part of the reason some people think this is that there are multiple reports of stores getting in quantities of comics that they did not order or way too many ‘extra’ comics. According to the reports, this keeps happening and the speculation is that Marvel is deliberately overprinting comics so they can report better numbers. If this is what is going on, someone at Disney should be able to tell by looking at the gross margin percentage over a period of several years. If what I just describe is happening, what one would see is that the gross margin percentage would have declined over time and be much lower than it should be, for no discernable reason.

5: Gee,

You must live in a different world than many people who don’t even have a comic shop closer than 45 minutes away!

There can’t be much of a comic book industry if there’s no place SELLING comics!

There are fewer than 1900 comic shops in North America. They lost around 300 shops in the last 3 years alone! There are many people evaluating whether to keep their stores because Marvel and DC are NOT making moves to improve the situation. They essentially told them at the last major meet-up between the companies and retailers that they’re not going to change how they run the business because it would cost too much to change their business models!

It’s completely insane to do business like they have been for about 40 years and most people are aware of that except guys like you who are ignoring the reality.

The business model HAS to change if the industry wants to survive BUT they’re not going to make the changes and it’s a bit late for some of things like selling anthology reprint books at Wal Mart especially when the retailer is indifferent to that idea and doesn’t care to promote comics.

What B&N and most places sell are packaged reprints, not original stories for the most part.
B&N has DRASTICALLY scaled back the size of the American comic section (which looks disorderly) while the manga sections have at least doubled in size. This doesn’t paint a nice picture for American comics on top of the reports about massive shipments of trades and hardcovers to discount places like Ollie’s unless you care to dispute that, too? I’ve been to a local Ollie’s and seen TONS of books from the last 5 years that just haven’t sold!

Yes, the industry CAN collapse.

They HAVE tried to make a go of it on digital but digital does NOT pay the bills and many web artists are finding it impossible to make a living off of web comics!

Do you think it’ll be much better for “comics pros” who are better at insulting the people who buy comics than selling themselves and their product?!?

I think the most alarming part of this comment is the mention and estimate, if true, of about 300 shops closing within the last few years.

6: I am gonna gonna tell you what has slowly killed comic books. Comic shops. I am 49 and when I was a kid you bought comics at grocery stores and convenience stores. Comic still depend of that 9-12 year old first time buyers to get hooked for 5+ years. 
The publishers only want to sell the 100% guarantee to shop. Selling other places that return unsold issues just isnt acceptable anymore.”

This commentator cites to the change in the business model. Pre comic book shops, publishers had a big incentive to put out a quality product that people would buy, since the grocery stores and convenience stores could return unsold comics for full credit. Once the business model change to direct to comic book stores, who had to pay for the comics in full when they were delivered, the incentive and driver was just to make a comic ‘look’ go enough in Previews (monthly catalog of new comics available for ordering with Diamond) to get customers to order them through the store.

Hopefully, Marvel is still doing at least ‘ok’ and sales will rebound, but I find it alarming for an article like this to be published, and, with how things have been going with sales, for it to seem very possible that Marvel comics could get shut down by Disney.

Good Luck and Take Care,

Louis J. Desy Jr., March 8, 2019

LouisDesyjr@gmail.com

Comic Book Stores – Inventory Problems – Part 3 of a Series

One of the big problems all comic book and game stores have is inventory buildup over time. In all of the time I have been looking at comic book and game stores, I have almost never seen the problem being a lack of inventory in the store, the problem always seem to be a build up of inventory of items that were never picked up by the customers or that owners ordered but no one wanted so it sits in the store forever. In some cases the inventory build up over the course of decades is so bad that some businesses end up with a few hundred thousand comics sitting around and in a few cases, I have run across reports where the build up was as much as one or even two million issues of comics.

My estimate is that there are a number of small comic book stores in the country where they are ‘going along’ with around 50 to 100 subscribers and their typical weekly order shipment from Diamond Comic Distributors Inc (I will, and others, usually refer to Diamond Comic Distributors Inc just as Diamond, Diamond Comics or Diamond Distributing) is around four to six boxes, resulting in the items at retail of around $1,000. With a hoped for 50% gross margin it gives them $500 per week to  pay all business expenses providing that all the customers pick up their orders. Now, I know that many people are kind of shocked that I would pick such a low amount, since at that level of sales the gross margin in full is only $26,000 per year, which is lower than working a job at minimum wage full time in many parts of the country. I have seen the financial books for some stores over the years and they were operating at or below that level. While those stores did eventually close, I have reason to believe that many of the stores still in business today are running along at such levels, and even on average $1,000 in sales may be OVER estimating the sales for a number of existing stores. The reason a number of stores are able to stay open at such levels are usually because the owner is somehow able to get funds from another source or has something special going on (owns the building, has social security retirement income) that allows them to stay open for working, in effect, less than minimum wage.

The reason that many comic book store owners would be willing to work, for in effect, less than minimum wage is, in my view, a combination of two things: 1: The owners love being in the business and do not want to do anything else. As long as they are able to somehow stay in business, they will, and will keep going. 2: The owners really do not want to go work for someone else, mainly for the loss of freedom to do what they want every day at work plus if there is no really better prospect for work, except for something at or near minimum wage, there is not much incentive or urgency to change their work. In many cases it may be that the alternatives offers not much upside or improvement from working for themselves, so there is no rush or incentive to close the store and go work for someone else.

I think part of the reason many owners do not want to close their store, no matter how bad things are financially, is that they feel, and I think they are correct, is that it is something that will be ‘gone and lost forever’; i.e. the closing of the store will be the passing of an era and a tragedy to them and their customer, so they try to hold on for as long as possible. There was time and era where many comic book stores did very well and a dream job for many people. A person, who only really needed to have an interest and knowledge of comics, could go sign up with a distributor for a credit limit of $5,000 on net 7 day terms, lease a store space, and be profitable from almost the first day. A comic book store owner didn’t even need to be a high school graduate, would be able to make a very good middle class income, and was the master of their own fate. One of my friends during the mid 1990s boom, had sales of over $100,000 most years and a few years may have had sales as high as $180,000 per year, all out of a 600 sqft or so store, in a multiunit building  that they owned (three rental units and one commercial unit for the store). This was also around the same time that many comic book store owners bought their own store or building the store was in because they felt the comic book store was going to be around for a long time and wanted to own the building instead of leasing.

Today, there are still a number of stores in this situation and one of the big reasons that those store has been able to remain open is that the store has been shielded from rent increases, due to the escalation of real estate prices over the years, because the store owner owns the building. The problem in these situation is that many times the stores are only marginally profitable, even with the owner owning the building. In many cases in this situation the owner eventually sells the building as they retire but the store ends up closing since there is no way to keep the store as an going business due to the fact that the store is really not profitable enough to support a market level lease, so no one can buy the store as a going business.

Anyways, onto the inventory problem. The big problem is that for many stores there is a massive buildup in inventory which takes up most or all of the store profit, and eventually kills the store. Instead of having cash to pay bills, especially rent, utilities (electric, gas, phone) and the weekly invoice for new product shipment from Diamond, the store is unable to continue on. Over the years I have seen some stores so bad off that they had their electricity shut off or phone shut off. In one case of the phone being shut off the store could not process credit cards at the store and customers had to make arrangements to pay by check or cash, since the store was unable to process credit cards. In another case the store was so bad off that the mall locked the store out of their commercial space and seized all of the inventory in the store for non payment of rent. (Under state law this was legal and a right of remedy available to landlords for non payment of rent on commercial leases.)

The first cause of inventory build up is that customers do not pick up all of their orders and the store gets stuck paying for them and then not being able to ever sell them, in some cases at any price. The typical sales cycle is that customers tells the store what comics they want, the store places the orders every month with Diamond Distributing, and when the comics arrive each week the customer comes into the store and pays for them. This entire model break down when customers over estimate what they can afford to pay for or something changes with the customer and the customer can no longer afford to pay for the comics as they arrive. Some situations are beyond the customers control, like an unexpected loss of their job and they can no longer afford to get their comics. In these situations many customers will notify the store and cancel all of their subscriptions so at least the store will no longer order for that customer. The problem is that even if one stops ordering for a customer today, there are comics that will arrive for that customer for the next few months, which the store is stuck paying for. In some situation sometimes customers will move away and not notify the store to stop their subscriptions.

My friend Roger Anderson, of Musicquest in Worcester, MA, had an interesting problem years ago when he was going down his list of subscribers and calling them to get them to come in and pick up some of their stuff. One person he called was not in but someone else answered their phone. The person on the other end did not seem to really be clear of when or where the person Roger wanted to talk to was or when they would be back so Roger could phone them and talk to them. Roger kept pressing and finally the person who had answered asked why Roger needed to talk with the person so bad. Roger explained that the guy had a subscription for comics at his store but the guy had not been in to the store in 3 or 4 months. At this point the person, who Roger had on the phone, told him that the guy had moved away a few months ago and left no contact information. If Roger had not pressed the person he got on the phone for more details, Roger may have place more orders for comics for this subscriber, that Roger would have had to pay for, but was never going to get picked up and paid for ever.

The second cause of inventory build up is that many comic store owners will order things that ‘they like’ under the believe and hope that if they like it, their customers will like it. The problem in many cases is that the customers usually have different likes so the items arrive, get paid for by the store, and then sit in inventory until the end of time. As these items build up over time even a small store could have tens of thousands of dollars tied up in things are never going to sell!

The third cause of inventory build up is the large number of items publishers put out every month plus, in some cases, required minimums to purchase some items. I am still amazed at how Previews, the monthly catalog from Diamond of the items available for ordering each month, is typically anywhere from 400 to 600 pages. The problem with having so many things available every month, that it is hard to know what to order or what will sell. Every time a store orders ‘just a few of something new’ they run the risk that not even 50% of what was order will sell, meaning that it cost the store money to have it in stock and also now the remainder are taking up space in the store, usually forever. While a few things overstocked is not that bad, over the course of a few decades it can result in hundreds of thousand of unsellable comics or even mountains of comics that are unsellable in the range of one or two million issues and require storage or warehouse space. The problem with the tens of thousands of dollars tied up in such mountains of inventory is that they usually will never sell because most comics are usually only in demand for a few weeks after they are released. After that, most stores discount them, and then after that it is the one dollar or even 25 cent bin where they languish forever and take up space. All of this unsold comics take up valuable cash that stores need to pay bills and provide the owner a living.

Fro many stores, the inventory build up problem is so bad that even if they lost something like 50% to 80% of their inventory overnight, they would still be able to have a large pile of inventory available to stock the store with and the store shelves would still be jammed with items. The comic book industry is one of the few industries where I have seen inventory builds up on such a large scale and combined with the problem that even at very low prices it would still not be practical to sell off this inventory. Part of the problem, especially for a number of comic series rushed into production during one of the boom periods, is that the comics were bad (bad illustrations, bad story line, no plot, etc) and no one wants to read them, so no one wants to buy them, ever. Some of these comics are so bad that even if given away from free to people that fans would consider it a waster of their time to read them!

Hopefully, with the help of computer systems such as Comicbase or Diamonds retail Point of Sale System, Comic Suite, for comic book stores, many of the problems with store inventory can be mitigated so comic book stores can be successful and continue to operate for years to come.

One recommendation I would make is that companies like Diamond Distributing should do everything possible to make it affordable for all comic book stores to get an integrated Point of Sale System. The last time I look at that it does look like a good system but seems to be very expensive. While I can understand wanting to make it so the sales cover the cost, Diamond Distributing should remember that it is in the business of moving comics and the Point of Sale systems is a tool to help stores be successful so they can build their business, which would result in more comic book orders. If possible, I would recommend that Diamond Distributing sell the Point of Sale system for as little as possible in order to make it so all stores are automated and computerized to the full extent possible. Every moment such a system can save a comic store owner from having to deal with the mundane work of the mechanics of running a store is another minute that a comic book store owner can be doing something else to directly work on providing service to their customers and building the business, and everyone in the chain (publishers, Diamond Distributing, comic book store owners, customers) all benefit.

Good Luck and Take Care,

Louis J. Desy Jr.

Sunday, February 24, 2019

LouisDesyjr@gmail.com

Comic Book Stores – The ‘Joy’ of New Comic Book Day Every Week – Part 2 of a Series

Ah, the joy of new comic book day each week. All comic book stores have a weekly new comic book day. As far as I know and can remember, that day is Wednesday every week. That is the day that the shipment of new comics arrives from Diamond Distributing and people rush to their local comic book store in order to pick up the new comics. Several years ago Diamond started to offer the option of getting the shipment on Tuesdays so that stores would be able to check in the order and sort the comics into customer pull boxes and be all ready on Wednesday to sell to their joyous customers. Over the years I have heard some variations where stores will actually close for a few hours in order to check in the weekly order and sort it into customer boxes. Roger and my friend Bob have told me stories of customers so eager to get their new comics that the customers show up on Wednesday, and prior to the order being sorted, would open up the UPS boxes of the order and rummage through them looking for their comics in front of Roger or Bob, not wanting to wait the few hours it would take to sort through the whole order. As you can imagine, this would upset a number of store owners and resulted in them closing for a few hours to properly check in and sort the whole order or getting the order on Tuesdays so they could do the checking in and sorting after hours on Tuesday evening without customers rummaging through everything.

Under the business model I discussed in Part 1, the dream is that everyone, customers, would come into the store each week and pick up everything that was waiting for them. The best part, when this did happen, is that the store would collect the money for the weekly Diamond invoice prior to the payment being due since Diamond typically gives NET 7 day terms.

The problem is that at times, especially during recessions, many stores will not even have 50% of the order picked up prior to the following Wednesday, which is when the next shipment arrives from Diamond and the prior Wednesday order’s invoice was due. Since the margin, at best, now a days, is around 50%, when less than 50% of the order is picked up by customers, the store now has to get money from other sources in order to be able to pay the weekly invoice, or worse, simply can’t pay the weekly invoice.

As far as I can tell from over the years, Diamond will allow a store to go about three weeks behind on paying the weekly invoice before the store will get put on back debt for the old invoices and COD for any future shipments. Back Debt is the store has to sign a note with Diamond, at 18% interest, and pay off the old invoices over the course of a number of months, like around 6 to 9 months. The COD is that any future shipments have to have a COD (Cash on Delivery tag) with UPS so the store has to give the UPS driver a money order or cashiers check for the shipment before they can get the order.

As a side note, some stores get so bad off that when they get put on COD they don’t have the cash to get a money order or cashiers check. What some stores discovered over time is that if they are on good terms with their UPS driver is that since only one box of the order has a COD tag, the UPS driver can drop off the other boxes to the store. This allows the store to get all of the boxes for the new week’s shipment except for the one with the COD tag. The hope for the store is that the store will sell enough from the new shipment that they then will be able to get enough cash so they can pay for the COD tag and get that box off of the truck also, and be ok with Diamond. The problem when a store does this is that sometimes the store, even with most of the new shipment, can’t raise the cash before the end of the day on Friday. At that point if the box with the COD tag is still on the UPS truck, it gets returned to Diamond. Now, this is where the real problem starts. Since only the box with the COD tag got returned to Diamond, Diamond knows that the store got the other boxes and has not paid for anything. In this situation, Diamond will now break the weekly shipment down into the individual boxes and put a COD on each and every box for what is in that box. This causes all kinds of extra costs to the store since a COD tag use to be around $10 or so, so even a small store with only four boxes per week, that is having trouble paying for the new shipments, now has an additional $40 per week that it has to come up with. Over the course of half a year that would be another $1,000 that the store really can not afford and makes things worse for a store that is already doing not too well.

My estimates are that at any one time in recent years, about 25% to 33% of all of the comic book stores are on back debt and COD with Diamond. This is kind shocking since I am not aware of any other industry that this kind of problems with payment would be considered typical and on going and ‘just how the business is’ but it seems that on average it has been getting worse and worse for the typical comic book store over the decades.

Hopefully, these trends will stabilize over time and maybe even reverse a little so comic book store owners and their customers can continue to enjoy their comics for decades to come.

Good Luck and Take Care,

Louis J. Desy Jr.

Friday, February 22, 2019

LouisDesyjr@gmail.com

Comic Book Stores – The Business Model – Part 1 of a Series

Over a number of the past years I have followed the general business of what I would call the ‘comic book store business model’. Initially, around 2007 or 2008 or so, I started sending some of my friends reports about comic book and game store closings and openings. One of these friends owned a game store, another friend owned a comic book store and the third friend use to own a comic book store but closed it around 2000 and moved all of his inventory into a warehouse space and sold online only afterwards. My hope was that there was something that I could do or find to help all of them with sales in their businesses. I also talked over the years with a few other people that owned comic books stores;
a friend who owned a comic book store from 1985 to 2003, another friend owned a store until a few years ago and moved into a combination warehouse/retail space but is recently starting to liquidate in February 2019.

The, what I would call, the comic book business model is very interesting and worked well for a number of years. The typical comic book store would get customers who would want to sign up for subscriptions on what they wanted every month for comics. In return for ordering subscriptions almost every store would offer and give these customers a 10% discount off the retail price. As the comics arrived every Wednesday at the comic book store, New Comic Book Day, customers would come into the store and pick up everything they had ordered. These comics where usually held in a pull box/slot for them. Some stores would call these held comic for customers a subscribers list or subscribers, other stores would call these held comics for customers a pull box. In any case, the idea was that customers would come into the store every week and pick up all of their comics that had arrived, plus, hopefully, buy a few more things that the store stocked while they were there in the store.

According to what I have been told by my friends over the years, if all went well, the gross margin to the store from Diamond Distributing for the comics was usually in the range of 50% or so. Diamond would give stores net 7 day terms on the weekly invoice, so the store could sell enough of the weekly shipment and pay the weekly invoice before the end of the seven days. My friend Roger Anderson, who use to run the Musicquest comic book store in Worcester, MA; reported that in the good times for a comic book store that typically the store would have enough money to pay the weekly invoice from Diamond before the end of the day on Friday each week. After that all of the sales over the weekend was profit to the store for the week. When one think about this, that is very good, especially since most customers probably work during the week and only would be available if they made an extra effort to get to the store during the week so normally one could expect most comic book sales to be over the weekend, especially Saturday.

This business model of customers signing up for subscriptions in exchange for a 10% discount and then going to the store to pick up their orders every week should be a ‘dream’ business model. The store knows exactly what the customers want since they ordered what they wanted from looking through Previews. (Previews is a catalog put out by Diamond Distributing every month that lists all of the products available for ordering. So what a comic book store does is order at least one copy of Previews every month and when customers come into the store they can look through it while there and tell the store what they want to order.) The business model should be very good since the store would get the comics in on Wednesday and have seven days to pay the weekly invoice. This gives the store an opportunity to collect the money from the customers without having to put out any of its own money. The whole business model is cash flow positive, the store should collect its revenue days before it has to pay for the inventory.

The problem with this business model is that many customers over estimate what they really want or can afford to pay for, plus some comic book store owners over order under the belief or hope that if they like something that their customers will also like it and buy it. The problem with customers over ordering is that now the store gets stuck with inventory that it has to pay for but that is not going to get sold. I have also noticed the problem every economic downturn that a number of customers who lose their jobs and they are unable to keep up with their subscriptions and end up having to cancel all of their subscriptions. This leaves the comic book store stuck with the orders that continue to stream into the store over a number of months. (If one is ever in this situation and you need to cancel your subscriptions, please do so as soon as possible, otherwise it hurts the store more when you can’t pick up the comics which they have to pay for.) The other problem I noticed over time is that sometimes customers move away and never tell the store where they have a subscription to cancel the subscription, leaving the store stuck with comics that they now can’t sell and will continue to get for a number of months because they had no idea the customer moved away.

Other problems with this business model is that over time the gross margin from Diamond Distributing to the comic book stores has declined over time. Back in the good times, the margins were typically around 50% and in some large stores could get as high as 55%; i.e. $1,000 worth of comics at retail would cost the store $500 from Diamond at a 50% margin or even as low as $450 at a 55% margin. Today, the gross margin for many stores is down to 45% to 40% margins. On some items the margin may be as low as 35%. While that may sound like a good amount, it is usually very hard to make any money, especially if the store gives a 10% discount for customers that order comics through subscriptions plus the fact that for most stores overall revenue has declined over the years. A combination of declining revenue along with declining gross margin percentages make it hard to make any money, resulting in the string of comic book stores that have closed over the years.

Another problem with the gross margins over time is that years ago the gross margin was based on the total retail amount of the shipment for that week to the store but in recent years Diamond changed this to a rolling 12 month average. The problem with this change is that if a store had a low or soft month during the year, it would effect margins for months to come until the average improved. Sometimes these soft months in the year might not be the fault whatsoever of the store because of delays or changes in production schedules. While in theory most comics are published on a set schedule and have set release dates, it is not unheard of for schedules to slip at times or new series delayed for a number of weeks or even months for whatever reason. That will leave the store with less sales since the items will not be in the stores when they were expected and responsible customers who only order what they are sure they can afford will have allocated some of their hard earned money on something that will never arrive. Once in a while some products simply get canceled with no word or explanation as to why they were cancelled, leaving customers with unfilled demand for the product.

While it is not as easy to make money in the comic book business as it use to be, if one can get a store to the point that it is at least breaking even it can be a very enjoyable industry to be in and allows one to form a community of fans interested in comics. Many people will still miss their old favorite comic book store if it was one of the many unlucky ones over the past several years that ended up closing, but hopefully the stores that remain will be able to stay in business for years to come.

Good Luck and Take Care,

Louis J. Desy Jr.

Thursday, February 21, 2019

LouisDesyjr@gmail.com

W.B. – A Good Friend – 21st anniversary of the passing away of Robert Shearer on February 15, 1998

Today, Friday, 15, 2019 is the 21st anniversary of Robert Shearer, otherwise known as W.B., which was short for ‘Weird Bob’, passing away on February 15, 1998.

I only met or saw WB a few times, mainly at the Total Confusion convention held in the Worcester, MA area during the 1980s/1990s. The times I did see him he was already wheel chair bound all the time due to his health problems but he still was able to attend and everyone was glad he was there. I distinctly remember for years after WB passed away that members of his group continued to have him be part of the RPG games they played by having WB appear as a NPC in the module for the players to meet. I thought this was great since it showed that even though WB was gone, he had not been forgotten.

In later years, once I was friends with Roger Anderson, I found out that Roger had made and taken care of the funeral arrangements for WB. Apparently, for whatever reason, WB had no family or relatives left to do those thing for him so Roger took care of these things for WB. Fortunately, Roger was around and took care of all of that for WB.

I do not have the background story on how Roger and WB meet, and will ask around to find out if anyone knows, but I expect it was through Roger’s comic book store, Musicquest, and Roger’s RPG groups that Roger and WB became friends.

Every year Roger would go out to visit his family cemetery plots at the Worcester County Memorial Park in Paxton, MA on Memorial Day. Roger would go out in the late afternoon on Memorial Day, after he had closed up for the day for selling flowers and comics. On a number of those trips in the 2000s I went with Roger and his family to the cemetery. Along with visiting his family plots, Roger always went to WB’s cemetery plot, which was just a few hundred feet from the rest of the family plots. Roger’s father-in-law was a few hundred feet towards the other side of the cemetery. Since Roger passed away November 2012 I have continued to go out with his family on Memorial Day weekend and always make sure to visit WB’s plot and leave some flowers each year, just like Roger use to do.

Today, Roger, WB, Roger’s family and Roger’s father-in-law, are all now out at the Worcester County Memorial Park and within a three or four hundred feet of each other. Roger’s father in law is up on a small rise towards the east side. Roger’s family is sort of in the middle a few hundred feet from his father in law, then Roger is about one hundred feet to the west, and WB is near the west edge about 100 feet from where Roger has been laid to rest. Even though it has been a little more than 8 years from Roger passing away, I still find it somewhat of a shock that it now falls to me to be the one to make sure that flowers are left for WB each Memorial Day.

Since Roger was the only one to take of the arrangements for WB back in 1998, and it looked like Roger was the only one to bring flowers each year to WB’s plot, I expect that except for me there would be no one else visiting WB’s plot if I did not go each year and make sure things were done. hopefully, maybe a few of WB’s old RPG group can be found and a few other people can be assembled for visits each year.

I sometimes go out to the plots a few times per year but consider those ‘extra’ and not mandatory visits, where as the Memorial Day weekend I consider a mandatory visit that must be done each year, no matter what is going on.

I am glad to be able to do such important work and show that people have not forgotten about WB even though he has been gone now for 21 years and would have been 70 years old today. While WB is gone, he has not been forgotten and will be remembered.

Good Luck and Take Care,

Louis J. Desy Jr.

LouisDesyJr@gmail.com

Deal To End The Partial Government Shutdown Reached

            President Trump, in a live announcement broadcast from the White House around 2:20pm today, announced an end to the partial government shutdown that has gone on for the past 35 days. The deal is that a bill will be signed to open all of the government for the next three weeks, and pay all back pay, while more negotiations take place on the budget and ‘border security’. The expectation is that some part of the final deal will involved a border barrier in some areas as part of funding for the department of Homeland Security border package.

            President Trump claimed that he never asked for or wanted a total barrier from the Pacific to Atlantic oceans, but some supporters may have thought that was what “Build the Wall” campaign slogan meant and expected. It is possible that Trump’s political base may insist on such a barrier going forward and make it harder to complete any deal in the future that does not result in such a full sea to sea border barrier.

            While not much in the way of specific details were provided in the announcement, at least some kind of deal has been made to keep negotiating , open all parts of the government, and pay all government workers while a final deal is negotiated.

            President Trump did say that if nothing was done about a border barrier then there could be another shutdown when the current partial funding ran out in three weeks on February 15.

            Hopefully, there will not be another one of these government shutdowns and all parties can work together to keep the government operating as it should be.

Good Luck and Take Care,

Louis J. Desy Jr.

Friday, January 25, 2019

LouisDesyJr@gmail.com