- Posted by Johanna on March 8, 2010 at 1:28 pm
- Category: Graphic Novel News
On Sunday, March 7, U.S. customers woke up to discover that a huge number of normally expensive hardcover comics were available from Amazon.com for $14.99 apiece. Later in the day, some were discounted even further, to $8.24. Since these books included the Marvel Omnibus line, which normally is cover-priced at $100, lots of people jumped on the bandwagon and ordered wildly. Other affected publishers were IDW, Dark Horse, and Image, both preorders and current releases. As Bully points out, all of the publishers whose works were included were distributed by Diamond Book Distributors, which suggests a massive automated data glitch of some kind.
Another oddity about this event was the lack of cover price information. Instead of listing the book’s cover price at whatever it should be, and then showing the Amazon price as a discount (as you can see in the image below), the cover price was listed as a flat $14.99, with no discount. This unannounced “sale” pushed many of the comics into the Amazon top 100 sellers. At the time of this writing, with prices returned to normal, they’re still there, as shown by this screenshot. Note also that the books are no longer in stock (likely sold through the inventory), with delays of a week or two before they can ship.
The rest of the top 10 includes The Incredible Hulk Omnibus Vol. 1; Iron Man Omnibus Vol. 1; and The Death of Captain America Omnibus, and the trend continues through the top 20.
Plenty of people who took advantage of this error are feeling entitled, with some threatening class action suits if they don’t get their discount books. How selfish. You knew the pricing was wrong, and yet you ordered anyway. If you get any books at all out of the deal, you got lucky. Saying you should get them all is pig-headed. Trying to take advantage of someone else’s error isn’t good karma (although I ordered a few books myself). Trying to profit from it, by ordering multiple copies for later resale, for instance, is just greedy.
Similarly stupid is the idea that this shows that “Comics are too expensive. You make them cheaper, much cheaper, and people will buy them.” Well, sure, if you sell product for 85% off, plenty of people will jump. But you aren’t making any money if you’re selling books for less than it costs to print them.
So what will Amazon do? And who pays for this mistake? We don’t know yet. Plenty of people have gotten confirmation of shipped orders at the $15 price. Others, who ordered multiple copies of the same books, have been told that they’re only getting one of any given title. Preorders and orders on out-of-stock books are still pending as I write this. My guess is that those are likely to be cancelled with apology letters.
BleedingCool.com, which was pushing readers to order hard, with eight different articles about the event, has revealed that 14,071 items were ordered just through their links. At that level, they get a kickback of 8.5% on each shipped sale. Assuming a price of $14.99 (might have been less), if all those orders shipped (they won’t) Rich Johnston and crew made a shade under $18,000 off of their readers. No wonder they were encouraging multiple purchases!
But let’s examine the cost. (These are round numbers, of course, and note that I’m just discussing one source. There were likely many more orders that didn’t go through that set of links.) 14,000 books at a cover price of $100 would, let’s say, normally sell for an average of $70 on Amazon (somewhere between $60 and $80). They sold for $15 instead, for a loss of $770,000. Not in real money, of course, since nothing says the same number of books would have sold at the higher price, but in potential revenue.
What about Diamond? If Diamond normally gets $50 a book (half cover), or $700,000, and now they’re getting $7.50, or $105,000, they’re out almost six hundred thousand dollars. If the publishers expect to be paid at their standard rate, and Diamond has to eat the loss (if it was their data entry error), that could be rather significant, even potentially harmful to their business. Coincidentally, today’s news was that Diamond fired three people from their book arm, with their tasks being covered by employees on the Diamond Comic Distributors side.
Update: (3/9/10) I realize I was amiss in not taking the math example far enough. Let’s continue. If Diamond takes 5% off the top as their fee, then they owe the publishers 45% of cover price, which means $630,000. (Note that I don’t pay as much attention to the details of the direct market as I used to, and so I don’t know how accurate the 5% fee is. Those with more information are asked to update me, please.)
Given all the assumptions we’ve made, then instead of earning $70,000 for handling 14,000 $100 books, Diamond is in the hole to the tune of $525,000. I don’t think they can afford to lose that much right now. However, note again that this example is hypothetical. The 14,000 number comes from one site’s orders. More were ordered elsewhere, and regardless of source, not all of those books will ship. Plus, Diamond may not be held to blame for this, or the cost might be shared among participants (publishers, distributor, and Amazon), or lawyers might have to get involved to figure it all out.
One additional ramification, as Caroline pointed out, is that this little snafu has made the books involved rather scarce, even if you want to pay a more reasonable price. Those who ordered for speculative purposes may be able to turn the books quickly, until more make it into the pipeline.