Tilting at Windmills #41
By Brian Hibbs
(Originally Ran in Comics Retailer #42)
Seeing that I'm tired of writing about (and you, chances are, are tired of reading about...) about the "big issues" that effect us (distribution, etc.), this month's column gleefully abandons all that to talk about another kind of issue -- back issues to be precise.
I'm starting to hate them.
Well, actually, maybe that's not the best place to begin. Let's try a minor historical lesson, instead.
Now, look, I've been a comics retailer as long as I can remember (started at 16, and I'm <gasp> 28 now), but I certainly wasn't there at the beginning, but as close as I can determine, comic book stores exist because of the back issue market: stores started popping up that dealt primarily in older comics, and, after a period of time, the direct market started to form around this nucleus (Hey! I said this was a minor historical lesson!) -- these earliest stores were buying new material from the newsstand distributors, and existed primarily from sales of "vintage" material. When I started in this business, a decade ago, the store I worked for did roughly a third of its volume in back issues. When I opened Comix Experience, 6 short years ago, the percentage was hovering around 20%, but today, in 1995, that percentage rarely cracks 7%.
(Sure, I only have the one store, so I don't exactly have a statistically viable base to determine if this is usual for the rest of you, but in casual conversation, it certainly appears to be the case.)
The scary bit about back issues occupying a shrinking portion of our sales is that they are continuously growing in quantity ever week. Six to eight hundred new comics a month yields 150 to 200 new "back issues" thirty days after these titles are released. Just one copy held back of every title the direct market receives gives two to three new long boxes a month for our back issue bins -- that's maybe 32 long whites a year!! Yoikes! Go back ten issues to the November '94 issue, and read my article on sell-through. To refresh your memory, because industry averages are something like only 80% overall sell-through, we're looking at somewhere between $24 and $96 million dollars a year in unsold merchandise sitting in our back issue boxes!
Managing a back issue inventory has become one of the most critical tasks a comics retailer has to face. And that is because the nature of back issue consumers has diametrically changed in the last few years. It used to be that we'd get 5 or 6 people in a day with little lists of all the titles they were looking for -- these guys were readers, for the most part, mind you -- now if I get 5 a month I consider myself lucky. It used to be that most regular customers would, once hooked into a title, jump all over the back issues, trying to get "caught up" -- this, too, has become a rarity.
I believe there are three key reasons why the "back issue customer" has started to become an endangered species of sorts:
1: The proliferation of new material. Ah, the "good old days" -- when 100 different new comics was considered a flood -- You're looking for something to read, so you buy 4 or 5 new comics, as well as a back issue, or two, just so you get your RDA of reading material. But today – today 100 new titles is puny -- there are more choices than the customer could really ever want, let alone be able to read in a given week.
1.5: (this is really a subset of #1, so we can't count it as it's own point -- Event-driven marketing, and cross-pollination of titles has created a more focused consumer. In a world of "Family Groups", we've lost a fair amount of sampling. If you like, say, X-Men and Batman, there's something not unlike 5 or 6 comics a week right there, in those two groups!)
2: Increasing cover prices. Though this works in tandem with #1, this point can not be understated -- $10, five years ago, could (if you shopped wisely) 13, maybe 14 comics. A couple of those are bound to be back issues. Today, you won't get half of that -- probably less than a third. This leaves little extra discretionary income to buy back issues.
3: Speculators turning back issues from entertainment to commodity. I've watched as heavy back issues buyers get depressed because the market caters to buying for value -- driving up prices on titles they wanted. Some of them tried to play the game as well, but most of those got burned, and dropped out, too. By association all back issue collecting got smeared with the speculative paint brush.
In early winter of 1993 I suddenly woke up and realized that the amount of floor space my back issues were taking up was way out of line with the money they generated. Back issue sales were declining, while stock was mounting faster than we could sell it. So, we did a massive declining discount sale: we started at 30%, and each week dropped the discount another 10%, ending up at 90% the week of Christmas. I want to note that, at the time, we probably had the widest array of back issues, within San Francisco -- some 24,000 different titles. We excluded about 20% of the stock from the sale -- stuff we thought didn't need to be discounted to move. We sold $40,000 "worth" of back issues for about $8000, and counted ourselves lucky. And, even after all that, we still had about a third of our original stock left.
After that I started color-coding stock. Anything that went into the boxes got a blue tag, instead of the white ones we used the first 4 years. About three months later, I switched to green, then yellow, orange, and today I use red, tying to switch every three months or so. When we switched to yellow, we started discounting the remaining white tags 25%. When we went to orange, the whites went to 60%, and the blues switched to 25% off. When we went to red, white tags got dumped in the quarter box, blue went to 60%, and yellow became 25% off. I'm sure you can figure out what happens when I go off red. Basically, when this means is we give a book a year at "full-price", and another 6 months a various discount levels, then we yank it.
Based on the full cycles we've done so far, it becomes clear that back issues are dead. Bereft of life, it rests in peace. It's rung down the curtain, and joined the choir invisible. This is an ex-market.
O.K., O.K., all stealing from Monty Python aside, there are, of course, some exceptions -- maybe, possibly, 10% of the stock sells steadily (At CE, that would be Spawn, X-Men, some Vertigo titles, Daredevil, maybe half-a-dozen other books. And, of course, whatever 20 or so comics Wizard is currently focusing on as "hot"); while another 20-25% sells sporadically (it at least appears to be tied to the presence of out-of-town visitors, here) -- maybe we'll sell a copy or two a year. But that other two-thirds just sits and sits and sits.
This is recent-ish comics we're talking about, by the way -- say last 20 years. You certainly can build a business in Silver and Gold which is relatively bullet-proof, but that takes a fairly large capital investment, and requires a lot of scrounging around to get going in any significant manner.
As far as I'm aware, we're still the only store in town that buys from consumers every hour we're open. We also never cherry pick collections -- we'll buy every comic in your collection. But we only pay salvage rates -- 2 to 10 cents a piece, depending on the "quality" of the stuff (JLA and FF might get you 7 cents, but Arak and Arion are 2 cents). We switched to this policy 6 months ago after I saw the early results of our color-coding. I understand some retailers use a by-the-pound method to similar effect. The reason for this is really simple: we don't especially need any more back issues. We're down to 6000 different titles -- but that's still probably 5000 too many, based on how often they turn over, and the floor space they consume.
The funny thing is, our purchasing of back issues hasn't decreased in any substantial way. What we've found is that the vast majority of back issue sellers will take what they can get -- very few people sell back issues because they want to -- but they have to. They're moving, or they need room, or they need a couple of bucks for rent money, or something. They want to get rid of them fast and easy.
Now, I can hear some of you saying, "Wait-a-minute, are you advocating ripping people off because they're in a rush, Hibbs?" No, no, no. The other important bit is to "read people their rights" -- we make a point of telling people to shop around; we attempt to point out specific items that other stores might pay more for; we explain that why these policies are in place; we suggest donating the material to a charitable organization, and getting a tax write-off (or just a good feeling) etc., etc. And 95% of the sellers listen to all that, and say, "Fine, we'll take it, anyway."
Right now I've learned enough about the state of sales, in this store at least, to start seriously thinking about eliminating back issues altogether (or, at least, all but 3 long boxes up on the counter) -- that floor space can be more profitably given over to merchandise that has a faster turn-rate, and a higher price point. It's a hard step to make though, because there is certainly an element of customer service in carrying a wide array of back issues. I certainly don't want to alienate any customer, but we're talking about less than 2% of my base -- it's hard call, but I'm thinking about it.
Honestly, the thing that's really holding me back is the sticky question of what to with the left-over "new comics" once they ain't new no mo'. I mean, eventually, they're gonna land in the dollar box, or quarter box, but I can't put them there straight from the rack -- that's just gonna devalue the cover price of the comics (not that comics aren't, for the most part, over-priced) -- I feel you need at least a six month gap between the two. Our sell-through is getting tight enough so that this is less than a short box a week, but it's still somewhat of a potential cash-flow concern.
One way that we have found to quickly turn over back issues is packaging them in cheap sets -- 10 issues of New Mutants for $5 (an aside: I have come to the conclusion that every collection I've seen from a 10 year or more collector, selling over a long box, comes with a complete, or almost so, run of New Mutants! Number one to somewhere in the 80s, usually. It's a pretty ridiculous phenomenon); or JLA #1-10 for $9 -- basically any contiguous run packaged for a cheap, cheap price will sell better than the individual issues, even at that same cheap price!
My eyes were pried open when we went to color-coding. Things that I believed sold well actually barely trickled -- there's, say, 365+ issues of Avengers, after all – you could be selling an Avengers a day, but still only be moving any individual issue once a year! This is, of course, an extreme example, but it should convey the chasm between belief in salability, and actual results. Whatever you do with the information, I strongly urge you to start color-coding, just so you have the essential data!
Brian also has this second note (which he just knows is going to be edited out from the final copy) -- Boy Editor JJ Miller gets 10 points for his clever Introduction to Columnists in CR #41, and another 10 points for almost always coming up with a clever heading and sub-heading for your humble commentator. However...he gets minus 5 points for changing all my Capitals in column #41 (it's "your Right to Free Expression", *not "your right to free expression"!!), and minus 2.5 million points for editing out the word "masturbating" -- c'mon Chief ("don't call me Chief!"), we've all done it, at least once...at least I didn't try to tell my "Marvel & the Word ‘Fuck’" story here...