Retailer vs. Customer Needs

It’s important to remember that, while your comic shop retailer may be a great guy or gal, their financial interests are fundamentally not yours.

I used to think that I could understand the direct market comic retailer mindset. I was considering being one, even. When I decided against that (it was too much work for too little profit, hamstrung by uncontrollable restrictions like a monopoly distributor), I thought learning more about their needs and wants would at least make me a better customer. The problem is, what the retailer wants isn’t necessarily what’s good for the customer.

Let’s look at some examples.

You want good comics for the lowest price. They want to maximize their profits (and stay in business), which means higher cover prices. You want to try (browse) before you buy. Many of them want guaranteed pre-orders, or you won’t find anything on shelves but the usual DC or Marvel.

There’s the case of Fell, Warren Ellis’ $1.99 comic. It attracted attention and sales because of its price point, but some retailers argued that it should have been priced higher to maintain their profit margins. Any readers out there want to pay more for a smaller format?

Do you know why the Marvel Dark Tower comics were $3.99 an issue? Because when Marvel started promoting the idea to retailers, loud voices responded, “these are guaranteed sales to Stephen King fans, you should charge more than the standard $2.99, and we’ll all make more money.”

(These kinds of discussions may be why some retailers have stopped participating in online retailer industry groups, for fear that they could be charged with price fixing:

In general, it is an agreement intended to ultimately push the price of a product as high as possible… The principal feature is any agreement on price, whether express or implied. For the buyer, meanwhile, the practice results in a phenomenon similar to price gouging.)

The rise of weekly comic series are applauded by retailers because they force customers into the store more often, where they have more opportunity to spend. DC’s weekly series have moved from $2.50 an issue to $2.99 because they feel they have a captive audience, a group of customers that “have” to buy the issues to keep up with their universe. That publisher also announced that they’d be delaying the release of any collected paperbacks in order to drive more purchases, a message aimed at pleasing their retailer customers.

I’ve previously talked about how leading retailers argue for longer time periods between issue releases and their eventual collected editions, in order to “encourage the customer base to actually support the serialization”. Translation: make them buy issues instead of letting them wait for the trade, even though the collection is a better product and greater value.

In that same link, another retailer wants to eliminate online discounters; they think minimum price floors should be set and no one allowed to sell at a price under that. Big comic customers often go to online providers with large discounts because they (as good consumers) are trying to maximize what they can buy with the amount they’ve budgeted for their hobby.

Let’s talk about preordering. In return for committing to buy a comic blindly two or more months ahead of time, the customer gets… what? I only preorder if I get an excellent discount, because I’m making things easier for the retailer by giving them a guaranteed sale (and demographic information about what books are of interest to their customers). The risk is that I sometimes have to buy something I no longer want, or something that doesn’t live up to the advertising.

Some retailers want to position subscription services as a convenience. “You’re sure to get what you want” and “your books are held for you”, so they shouldn’t have to give a discount as well. That doesn’t make sense to me, when I can get a third or more off the cover price by preordering online. In many cases, I’m going to have to preorder anyway, or I’ll never see the book, since it’s becoming riskier for stores to stock shelf copies in any kind of depth. If I want to browse indies or manga, I’m going to wind up at a bookstore or a convention, venues that do allow browsing of the books I’m interested in these days.

The more customers know, the better deal they can get. If shops don’t give discounts, and the customer service isn’t excellent, and there aren’t shelf copies of unusual titles to browse, then stores become less appealing (unless they’re one of the top ten percent, which are mostly found in high-population urban areas). In an interview, Robert Scott sums up the disconnect like this:

[T]here are a lot of retailers that don’t understand that if they stopped their 20 percent discounts, they could lose half of their customers and still earn the same dollar profit, yet the first thing every customer will say if you ask them what their shop could do to improve is, “give me a (bigger) discount.”

What the customer wants — better deals — isn’t in keeping with the retailer’s profit needs, and vice versa. It’s a very tough job to be a comic store retailer, and it’s getting tougher all the time. It’s no wonder that they feel pressured, what with increasing bookstore competition and losing customers to online alternatives and ever-increasing amounts of products that have to be carefully evaluated to determine what will sell. I have a lot of sympathy for them… but I still need to watch out for my own customer interests.


26 Responses to “Retailer vs. Customer Needs”

  1. ADD Says:

    Well said, Johanna. Retailers seem to forget that consumers have a right to make up their own minds how they choose to spend their money, and unfortunately I think some readers sometimes forget that too.

  2. Dan Vado Says:

    I think what bugs me the most about the needs of the direct market retailers as you outlined above is that it all seems to be dependent on maintaining a status quo that has over time proven not to be effective in terms of expanding the market for comics in general and comic stores in particular.

    Very rarely do I see retailers asking what the larger publishers are goign to do to bring new blood into their stores, it almost seems that they are saying that it isn’t possible to expand their businesses and client base instead want to find new ways of wringing more out of the existing customer base, even at the expense of actually growing.

    I realize I am painting with a pretty broad brush here and that there are retailers out there who ARE trying to get a wider and more diverse customer base, but the majority of retailers seem content to simply put a Spider-Man poster in the window and make a living off that one segment of the industry.

  3. thekamisama Says:

    No wonder I am not a comic book retailer anymore! I was working on the wrong mentality. I should have been more “Money Money!” and less “Hey Kids, Comics!”.

    Of course if price point and profit margin are such big concerns to todays retailers, they shouldn’t have dropped the ball so badly and let the big box bookstores steal manga and high end graphic novel right out from under them.

  4. Lyle Says:

    For me while a discount is nice the number one thing a store can do to improve for me is get a good, browsable selection. I like to discover things, I like to look around, I like to buy on a whim — maybe today’s the day I’ll go back to reading Hikaru No Go — instead of needing to go in with a list of which titles I’m supposed to find in my sub box that day with the expectation that if I forget something (since overprints aren’t done so much anymore and most stores don’t order much more than what’s needed for pull lists) I won’t get another chance to buy it.

    I realize a comic shop can’t increase its selection just to get my business but that’s what the comic shops I return to were like. Unfortunately, in a lot of cases it’s now easier to find a good selection at Borders (but not B&N) than at a comic shop. Since moving, I haven’t really gotten around to finding a new shop.

  5. Journalista - the news weblog of The Comics Journal » Blog Archive » Mar. 12, 2008: The kind men like Says:

    [...] Johanna Draper Carlson looks at several examples of how retailer and customer needs [...]

  6. Johanna Says:

    thekamisama, traditionally, there’s been a problem with people getting into comic retailing without considering it as a business, so I don’t object to those trying to make a profit — I thought readers should know what kinds of aims motivate those retailers considered successful.

    And you make a good point about retailers missing out on the most profitable elements, which ties in with Dan’s comment about the status quo.

  7. odessa steps magazine Says:

    A store I used to frequent made the decision years ago to drop the new comics discount (which I think was 10% at the time) and increase things like Back Issue discount.

    They gave their customer “more for their money” but moved from where it came.

    IIRC, most people accepted it and very few complained and/or had to be grandfathered into the old system.

  8. Bradley W. Schenck Says:

    Dan Vado Said:

    “…it almost seems that they are saying that it isn’t possible to expand their businesses and client base instead want to find new ways of wringing more out of the existing customer base, even at the expense of actually growing.”

    ==========================================

    Isn’t this practically a definition of what the industry’s withdrawal into a Direct Market does on every level?

    In retreating from the newsstand the industry made it next to impossible for new readers to even *find* comics, while creating a non-returnable market to maximize their profit on the core readership that was left.

    I missed out on this transition myself but from my outsider’s vantage it seems like this is a continuing collapse, with profits coming from finding more and more ways to monetize a single aging, shrinking market.

  9. badMike Says:

    “Many of them want guaranteed pre-orders, or you won’t find anything on shelves but the usual DC or Marvel.”

    This drives me nuts. Why do some/many/a lot comic stores have this concept that they’ll only carry what customers ask for? Do big bookstores operate that way? I feel in a lot of ways that I’ve been driven from comic book stores because I can never find what I want. For example, and this has happened to me more times than not, I’ll start buying a mini-series, then by issue #3 I can’t find it anymore. I won’t buy a regular series ever again because of this and I’m about to stop with mini-series. They don’t want us to “wait for the trade,” but I can never buy a full series anymore ever.

  10. Jamie Coville Says:

    Big Bookstores can return some of their books if they don’t sell. Comic book stores can’t. As a result they need to be very careful in ordering what they strongly believe will sell.

    Otherwise they end up going out of business.

    It’s a catch-22, the “quiet demand” for some books. Retailers don’t know for what books it’s for and customers end up getting those books elsewhere instead of asking for it.

  11. dan shahin Says:

    There are a few flaws in your reasoning that I’d like to point out. First of all, The higher the price, the more (taxable) inventory we need to carry.

    We buy this stuff non-returnable months in advance. The higher the cover price, the more we have to lay out for comics that may or may not sell. Those that don’t sell, we eat.

    That brings me to your next two conflicting points: pre-orders and discounts. On one hand you totally dismiss the labor that goes into soliciting, collecting and filling orders from hundreds of customers. That takes time which equals money.

    You also bemoan the lack of discounts at many shops while also saying you want them to be more well stocked. In these days of high rents, employee and energy costs it’s pretty hard to offer discounts and stock the shelves, so many retailers feel the need to choose.

    At Hijinx we opt for a little of both. We don’t discount new comics, but we have the best selection (in breadth and depth) of any store in the area. We also offer a book club for graphic novels that lets regular customers earn store credit on every graphic novel they buy.

    As for pre-orders being guaranteed money, that’s only the case if the person comes in and buys the books, and I can assure you that many don’t. We also have a no-hassle sub policy meaning you can put back books from your box as long as you come in regularly and take them off your list when you return them.

    We’re also committed to giving the highest levels of customer service in any retail industry (not just comic shops) and we’ve got several thousand happy book club members to prove that we’re doing it.

    Too many shops go out of business by falling into the trap of heavily discounting pre-orders to secure steady but low-margin customers. We opt for service and selection and do our best to reach out to our community and beyond to spread the gospel of comics.

    There are a lot of stores like mine and to paint the whole lot of comic retailers as money grubbing lazybones is pretty insulting.

    Also, I’m not sure about your recollection of that thread on the CBIA, but I do know you’re not supposed to blog about stuff you read there without permission. And since you’re throwing around allegations of federal offenses like price-fixing you’re exposing many comic shops to potential life and business-crippling investigations (whether they are guilt or not) and even possible jail time.

    The CBIA has also since instated specific anti-pricing discussion rules to alleviate price-fixing concerns. I’m not sure if you are aware of that or not.

    Had you attempted to be a comics retailer you might be more aware of the huge pressures on all small retailers, but particularly for those in this industry.

    dan shahin
    Hijinx Comics
    http://www.hijinxcomics.com

  12. Johanna Says:

    Those aren’t reasoning flaws you’re pointing out, they’re just different perspectives. As a retailer, you have different priorities than I do — that was the point of my post. I wanted to talk about this because I figure lots of people think about running a store, but few get far enough into it to write a business plan (which was the point where I decided it wasn’t a smart decision).

    I know how much labor can go into filling sub boxes, since I did it at a local shop for months. I also know that a lot of shops out there don’t pay for that labor, instead offering credit or other deals. I’m sure you pay all of your employees in full compliance with labor law, but I’m willing to bet that the majority of comic shops out there aren’t in such full compliance.

    Again, that’s an example of the small percentage of excellent shops against the large number of those that… aren’t. I’m not saying “all stores are bad”, I’m saying that it’s hard, given geography, for many people to get to shop at the excellent stores. Unfortunately, the cruddy stores ignore discussions and feedback like this, so the great stores wind up feeling unfairly maligned because they’re the only ones paying attention. It’s probably similar to how I feel when stores start talking about how those who pre-order don’t pay for their pulls. I’ve always paid for everything I’ve ordered, but apparently I’m exceptional.

    As for discounts vs. selection, I can get both by shopping online. I know that physical locations may have to choose between one or the other… that’s another unfortunate hurdle that retailers are up against. As I said, my sympathy is with you. It’s an uphill battle you’re fighting. And demanding customers like me only make it worse.

  13. Brian Hibbs Says:

    Johanna:

    I just want to say that I think you’re misrepresenting the trade/periodical issue to a certain degree. For me, at least, the issue isn’t “make people buy something they don’t want”, it is “don’t undercut your periodical by implicitly telling the customer that they’re ‘better'”

    Maybe that’s a little “six of one”, but I think there’s a difference between the two in the psychology of how and why people buy.

    Again, for myself, I think that the periodical is a valuable for both the consumer and the creator because it allows the inexpensive transmission of ideas into the marketplace — I strongly believe that if we go “trade only”, we are going to lose a lot of ability to transmit ideas into the marketplace. That I as a retailer, also benefit, is the least of my taking this position.

    -B

  14. James Schee Says:

    On the periodical vs. trade thing, I just wonder two things.

    On whether trades undercut the periodical, I’m sure it does to some extent. Yet does an extensive delay in a trade hurt the long term sales on it?

    I rarely ever buy a pamphlet/periodical these days. Yet I do know that there have been stories that sounded pretty interesting, but a collection was so long in coming that by that time I forgot why I was interested.

    I also wonder if a trade/graphic novel would eliminate new ideas, or cut down on so much of the chaff? I see a lot of independant creators going to graphic novel only formats, and surely if they could than the big guys could probably make that work too?

    Of course I don’t know why sometimes it has to be either or. For those customers who do want to read pamhlet comics every week then let them do so. I just hope there is room for those who want to pick up a certain story or character only about once every few months can too.

    (IE this month I want to read a certain Superman or Batman storyline so pick up those trades, next month I might be looking for Captain America, Scott Pilgrim, etc. and pick up those)

  15. Johanna Says:

    Brian — it’s very possible. I sat on this piece for a while because I kept tying myself in knots while trying to distinguish which of my attitudes were unusual and which I thought were representative of a larger part of the market. I’m willing to say you probably have a bigger view than I do, and your concern about a (relatively) cheap’n’easy way to get ideas out may be valid. (I’m also jaded about just how few “ideas” DC and Marvel are presenting or engaging with right now, but there are many others.)

    Last time I went minicomic shopping at a show with lots, I noticed that they were $2-3 apiece — how does that format fit into your thinking on the subject of idea transmission?

    James, I think you’re hitting on a failure of marketing/promotion. Some companies don’t bother doing much advertising of the collection, relying on the issues to do it for them.

  16. Brian Hibbs Says:

    Johanna:

    Maybe I should have said “national”? Minis seldom reach past regional levels, and are of middling worth in “name recognition” in the broader market, IMO.

    A good portion of my thinking is aimed at, um, “living wage for all participants”, I guess? There are very few creators able to make a living from minis, just as there are few who could do so from GNs-only, I think.

    (that’s not to say there are NONE… just that I think it substantially lowers the odds)

    Its not that I think that people doing periodicals are fat & happy, either — but there’s a tremendous amount of people doing regular work in this industry that I don’t think would be working as much if it wasn’t for the steady publication of the periodical.

    (in much the same way, that was my argument about FELL — it could have sold for $2.50, and it would have sold virtually as well, becoming a more lucrative project for Warren & Ben)

    -B

  17. dan shahin Says:

    >>They want to maximize their profits (and stay in business), which means higher cover prices.

    This is what I meant by flawed reasoning. This is simply not correct by any stretch of the imagination. Rising prices is not a magical way to maximize profits, as you lose more customers as the product becomes harder to afford and they either give it up or buy strictly online for the superior discounts they deserve. This only further fuels the problem of understocked shelves and lack of diversity in some stores.

    Online stores may offer (some) selection and high discounts, but you can’t truly browse the material you want to buy, and my idea of great customer service means much more than getting an emailed invoice.

    There is a tremendous value to the neighborhood comic shop, beyond being the cheapest place to get comics. An actual physical place to buy and talk about comics still has meaning even in this modern age of bloggery.

    Also, your anecdotal assumption about how most comic shops pay their employees is totally groundless, since there’s no way you could know that. I think you’re simply promoting an outdated and negative stereotype of comic shops based on your limited perspective.

    dan shahin

  18. dan shahin Says:

    above “deserve” should be “feel they deserve”

    dan shahin

  19. Brian Hibbs Says:

    >>>Again, that’s an example of the small percentage of excellent shops against the large number of those that… aren’t. <<<

    I don’t think it is all that of a small percentage, actually, though maybe I’m a complete insane Pollyanna on this, being in the Bay Area and surrounded by literally dozens of good stores.

    But, to me, starting from a judgment of all stores against the worst examples there are is sort of like assuming no artist can draw feet because of Rob Liefeld, or that all customers are Fat Smelly Guy because some are.

    Whether or not you or I or anyone else likes a particular business model, economic darwinism says that stores that aren’t serving the majority of their customer’s needs are going to go away with 5-ish years. You did a business plan yourself, you said — now run those same numbers assuming that you’re an idiot that isn’t matching the majority of your customer’s demand… you’re out of business very rapidly, right?

    -B

  20. Johanna Says:

    Dan, online stores have infinite selection, and I’m more likely to find an on-screen preview of something I’m curious about than finding it on the shelves of a local shop. I would love to have the kind of neighborhood comic shop you describe your store as being — but for many many locations, there’s just no option like that.

    You’re also ignoring that for some people (often, for example, adult women), the comic store is not a welcoming place but an uncomfortable one. A grumpy store owner or overly familiar customers can make a visit something to avoid, not something to look forward to.

    As for whether higher cover prices raise profits, that depends on how elastic you think the demand is. DC apparently thought that raising the price of their weekly series from $2.50 to $2.99 wouldn’t drive away too many people. The question of how many customers left visiting comic shop can be considered superhero “addicts” is an interesting one. In the bigger picture, you’re right, but I don’t believe that too many publishers are looking long-term any more these days.

    Brian, I’m going by the general assumption that only about 10% of comic stores carry a wide range of material, which I would consider necessary to be a great store. And yeah, I do think you have an advantage, being in one of the big urban areas where there are multiple excellent outlets. Much of the country isn’t like that. And it’s not about the few great stores vs. the few tremendous pits — it’s about the mediocre middle, the stores that aren’t horrendous but that also don’t inspire loyalty. They’re just there, selling the usual comics. Not providing great service, not doing events, not stocking diverse titles in depth, not making a visit a fun time to look forward to… just existing. It’s easy to walk away from a store like that when given greater selection or better prices, because there aren’t any strong ties to keep you there. When shelf copies decrease or pull list items don’t appear, there’s no positive compensation other than habit.

  21. odessa steps magazine Says:

    it seems that in addition to the “urban areas produce good stores” argument, I’d say the other area that applies is college towns.

    having lived in a number of them, there was usually at least one “good” store to be found there.

  22. odessa steps magazine Says:

    having said that….

    oddly enough, the one college place where I lived where the stores were substandard was the place where both Johanna and I lived for a time. Fortunately, there was a big city (with some good stores) a short distance away. :>

  23. Blog@Newsarama » The Lightning Round Says:

    [...] discusses the differences between retailer and customer needs. Interesting discussion [...]

  24. dan shahin Says:

    >>>Dan, online stores have infinite selection, and I’m more likely to find an on-screen preview of something I’m curious about than finding it on the shelves of a local shop.

    I wish I could find a bookstore (even an online one) with infinite selection, but I’ve yet to discover it. Even Amazon didn’t carry books like Jason Shiga’s Bookhunter except the ones I sold there for full cover price plus shipping.

    My own online graphic novel store, comicbookshelf.com certainly doesn’t have an infinite selection and we don’t even discount except for totally free shipping. Instead we choose to donate 10% of every sale to the Comic Book Legal Defense Fund and the Hero Initiative. Maybe we don’t get business from those looking for strictly the lowest prices, but we do get customers who love comics.

    You love comics, don’t you? :)

    dan shahin
    http://www.comicbookshelf.com
    http://www.hijinxcomics.com

  25. Johanna Says:

    Logic error! “All our customers love comics” doesn’t mean all people who love comics are your customers.

    And I like you saying someone couldn’t get that book through Amazon except for the copies they could buy there. :)

  26. Ellis and Templesmith’s Fell on Digital Sale » Comics Worth Reading Says:

    [...] interesting. Fell created a cheaper format that was quite successful while it was running (although some retailers hated it, reminding me of the current debate over digital pricing). Each issue was only $2, so putting [...]




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