Tilting at Windmills

Fri, October 17th, 2008 at 12:28am PDT | Updated: October 17th, 2008 at 7:40am

Comic Books
Brian Hibbs, Staff Writer

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POTPOURRI FOR $500 PLEASE, WINK

I don’t really have an over-arcing topic this month, just a number of small thoughts that have been bouncing through my head for the last few weeks. Let’s see how it reads. Follow the bouncing ball!

As I’ve mentioned before, we’re at just over a year now on having Point of Sale at Comix Experience (we use Moby, a system I can thoroughly recommend to any comic store), and it is really starting to pay strong dividends for us.

Third quarter in America hasn’t been very kind to either our economy in general — the Dow Jones is having historic losses, we’re in a recession, people are scared — or in the comics market in specific, where comics sales are generally down. At Comix Experience, however, our sales are strongly up. In fact, we’re up more than 15% for the quarter. It’s exceedingly rare to be able to get double digit growth in a store that is nearly 20 years old — I’m generally ecstatic when we we’re able to grow in the 3-5% range, and I attribute the largest portion of that growth to the POS helping me order better.

The POS is somewhat a minor aid in ordering the periodical comics — I kept pen and paper cycle sheets, and the differences in accuracy between those and the POS is not so very large, really. Nor is POS really needed for the best-selling books and graphic novels — I knew how to stock “Watchmen” (movie trailer aside), or “Civil War” or “Ghost World,” because those are all fairly obvious.

No, POS is most helpful (for me, at least) in two specific areas: 1) the tracking and processing of Special Orders, and 2) growing backlist that I hadn’t particularly conceived as having sales potential.

I used to really hate Special Orders — the amount of time they took to organize and process, and my somewhat fuzzy organizational skills made them a real bear. I’d write myself notes on post-its, then misplace them. Books wouldn’t necessarily be available the first week you tried to get them, and I’d forget to keep trying to order them week after week and so on. Now, however, Moby simply tracks it all for me. Put a customer and their requests into the computer once, and you barely have to think about it again. Moby tracks them, will reorder them week after week after week until they finally come in, and tells me exactly what goes where and to whom as part of the normal check-in procedures, with no special effort or memory on my part. This has allowed us to get a lot more aggressive about Special Orders, and really grow that side of the business.

I’m still figuring out some of the “best practices” for Special Orders — how long should we be holding stuff for customers, what do we do when they don’t come for their order, do we need to have a larger deposit system, and so on — but it has allowed us to do a better job servicing a wider range of customers in a significantly more effective manner.

In terms of backlist, as I said, we’ve never really had many problems sorting through the successes, because those are generally pretty obvious. I would have moved “Watchmen” from a shelf-level of 3 copies to the current 20 copies with or without a POS system, but POS has allowed me to move the needle fairly significantly on material that is a bit more on the margins. Especially material that Diamond does a poor job of stocking, and that I’m ordering via secondary and tertiary sources. Whether that’s an entire category like t-shirts (which are effectively “unavailable” through Diamond, outside of 3-5 styles in a tight range of sizes), or whether it is a graphic novel that I just didn’t have any personal affinity and/or understanding of (I’d have never have caught on as fast to something like, say, the “Artemis Fowl” graphic novel), POS just makes it trivial to get closer to the optimum number of copies in inventory at any one time.

Using Pen & Paper to track backlist, I used to keep my own list of material that we reordered. It was in 8-point type, in multiple columns on a page, and just before I brought the POS in, it ran nearly twelve pages long. Each week I’d walk the store with a clipboard in hand, trying to find the books we were out of, so I could fax it over to my long-suffering Diamond rep (I love Kyle Kramer, he’s the only thing that kept me from stalking Timonium with a high-powered sniper rifle for the last decade), and he could try to read my chicken scratch from a fuzzy fax and convert it into an order. (And that doesn’t even get to the parallel stock lists I’d keep for other distributors that beat Diamond on price or availability). It was a grueling process every week, and one just oozing with potential for mistakes.

I had to comb through invoices and Diamond lists each week looking for things to both add and drop from my custom stock lists, and I’d miss stuff that way. As I walked the racks each week with my 8-point type list, I’d skip over lines accidentally, leaving me not ordering stuff I should have. Then Kyle’d have to convert that into an actual order, and he’d make the occasional mistake as well. Brrrr, it was an awful, imperfect system!

All of that’s pretty much gone now as Moby keeps track of all the automatic parts of the job — I tell it I want to have twenty copies of “Watchmen” on the shelf, and every time I dip below that number, it automatically gathers the right quantity for me to order when I place my reorders. I still have to be smart enough to know to tell Moby that such-and-such a book should have so-and-so quantity in stock as a matter of course (as well as the converse — “stop reordering that one!”), but the freed time from doing the scut work portions of the task, paired with the tools that POS has to sort and track your inventory, has made it significantly easier to spend sufficient time to minimize my human-error mistakes.

I, honestly, can’t explain just how beneficial this has all been.

As I said, it has allowed me to catch things that would have been at the margin of my own awareness and tastes. “Artemis Fowl” is not a series of prose books that I was familiar with, so the GN never would have been something I would have really considered twice. Brought a copy in, sold it in a reasonable amount of time, I probably wouldn’t have thought to reorder any more after that — especially because it was an “H” discount book via Diamond, thus wickedly less profitable from the no-brainer source — and, even if I had, odds are solid that Diamond wouldn’t have had the copies to sell me, anyway, in the crucial initial Getting-To-Know-You phase of ordering. POS changed that, and how I reacted to the sales information.

I knew that POS was going to increase my efficiencies, and make me, at least, better in control of my inventory levels, but I wouldn’t have guessed that it would help me spike my sales up by 15% in a dire and downwards global economy.

I sometimes think that, in the Direct Market, success (or failure) is really more at the margins than it is in the big hump in the middle. If you have any acumen whatsoever, figuring out how many copies of “Watchmen” to keep on the shelves, how many copies of the periodical “X-Men” comic to order each month, those are relatively pretty easy tasks. I mean, no they aren’t really, because you’re talking about predictive ordering, and several rapidly changing variables, but, by and large, the base is large and diverse enough to absorb a lot of the real risk in ordering.

It is when you get into the B- and C- list material where things get trickier, because your initial numbers are so low that risk is radically magnified.

To try and write that in English, if you’re projecting selling 100 copies of something, and you actually sell one copy less than that, well, no real harm, right? However, if you’re projecting selling three copies, and you sell one less, there goes all of your profit.

The same works in reverse, of course. If you think you can sell three and you can sell four, that’s a huge gain on your instincts. Even better if you can sell five, or ten, or twenty.

POS mitigates a certain amount of this by giving you better tools to find and identify those margins. Thing is: you have to be open to being wrong about your stocking choices in order to make the changes needed. POS is just a tool, and like any tool, it can be used well, or poorly. It won’t make the magic all by itself.

But stores seldom go out of business (or even “just” fail to live up to their potential) because they over-ordered the “Watchmen” TP or “X-Men” periodicals. No, it’s usually the “Death of a Million Papercuts” from lower tier material, or the failure to diversify all the way to match most of your customer’s needs/wants. Far too often owner/managers think that what they want is what their customers want. Usually, they’re substantially right — that’s why they opened the comic shop, after all — but it is too easy to wrap your personal blinders in such a way as to not see all of the potential.

Success is in the margins.

Now that I have a year of computerized data in my hands, I can see that one of the biggest brakes on my growth is actually in the distribution bottleneck. I wasn’t paying a ton of attention to my fill rates, really. But now I’m seeing really clearly how mediocre they really often are.

This week was a typical week, really. Between Diamond and Baker & Taylor there was about $3500 that I was trying to reorder. About $2800 was actually in stock at the distribution level, however.

This scale of gulf (20%-ish) is reasonably normal, and proportionally, neither the DM source (Diamond), nor the “Bookstore” source (B&T), are particularly better than the other. B&T gets a minor nod because their ordering system allows you to see what their demand is versus what they have in stock as well as on order, but, overall, both systems yield a lot of “not in stock” results.

I may be overstating the problem a smidge because, of course, things that are Out of Stock tend to be that way for weeks or months at a time, inflating the percentages — but I suspect I could get another 5-8% growth just from having 100% fill-rates on desired orders.

It isn’t just a DM/Diamond problem (though Diamond is an extremely conservative company in terms of stocking their buy/sell vendors) — because my B&T percentages are very comparable. And, too, it might not even be a distribution problem, per se, because (through B&T’s ordering tools) I can see that there’s a lot more outages at the publisher level than I would have imagined. Finally, I’m pretty aware that distribution is an unforgiving business — they’re trading on razor-thin margins.

But if my results are anything like typical (and I don’t know that they are), increased distribution efficiencies and stocking levels would yield a great deal of growth in the market, in and of itself.

I really wonder how often DM retailers try to order a product, see it is out of stock, and give up at that point. I have a feeling it is significant. I tend to think that one of the reasons that the lowest hanging fruit gets the greatest retail sales is as much a function of distribution stocking as it is of retailer choice.

As noted, the publishers have a lot of culpability here as well, and I’m not at all convinced that the majority of them really have a good handle on how to manage backlist.

The King of Fail here is probably Marvel who seems congenitally incapable of keeping the right amount of inventory in stock. While Marvel no longer has a strict “print to order” policy as they once did (except for the MAX line), they’re still keeping a hard brake on their sales potential by not having enough overprints available. This is clearly demonstrated by the number of second printings that flow from them each week — it is a rare week where we don’t get at least two different second printings on periodical comics, and we had at least one week recently where it was five or more. That’s crazy.

It isn’t nuts just because it costs more to go back to press on 10k copies than to simply print 10k more copies on your original print run, but it’s also fugbuck crazy because you’re losing the most important tool of the periodical: momentum. Missing three or more weeks of sales velocity at the point that the interest in a work is at the highest is just wrong on every level, and it sharply limits the long-term sales potential of a work.

The weirdest thing is that this is something that the sales department at Marvel knows — in fact, they’re often offering incentives (extra discount, variant covers, and so on) to get retailers to front-load their orders. So to not have copies of editorially strong material on hand when the demand is there drives me bonkers.

The sales charts show Marvel running ahead of DC by about 50% (48% to 32% in August 2008), and I largely believe they could widen that by half again if only their products were available for reorder.

But it isn’t just the periodical — their backlist is a shambles in this retailer’s mind. There’s just an astonishingly wide swath of critical Marvel backlist that isn’t available at any given time. Whether it’s something like the first hardcover of “Runaways” (arguably the largest early-21st century original superhero success) being out of print for months at a time (limiting sales on the later volumes), or the unavailability of a complete set of inexpensive reprints of Frank Miller’s “Daredevil” in something like the last five years (!), or something crazy like “Wolverine: Origin” being unavailable for most of this year… to me, it’s not unlike the grocery store not having any milk or eggs in stock.

Marvel’s not the only one with this problem (it shocks me how often, say, Pantheon books seem to go out of print, too — but at least they seem to get them back within a quarter), they’ve just got the worst excesses of it.

One thing we changed internally at Comix Experience when the POS came in was how we handled subscription preorders. Under our old system we used to have customers sign up for each book they wanted individually — “Batman” #650, followed by #651, then the month after #652, and so on. I wrote them in a notebook each month, probably a 4-5 hour task, but one I could easily do while watching TV or something similar, so it didn’t feel like “wasted time,” if you see what I mean? (as opposed to walking the store with a clipboard each week to do reorders, that really felt like wasted time!)

We tried adapting that to the POS, and, in fact, even had the guys at Moby write me an interface tool that made it specifically possible, but since all of that work has to be done at the register/terminal it ended up eating a lot of time when my staff could probably be better used making sales or straightening up the store.

So I switched to the bog-standard industry practice of the Standing Order — you want “Batman?” You get every issue of “Batman” until you tell us to stop. It really is much easier to maintain on our end, and it has reduced a lot of the volatility of sub numbers because people aren’t, generally, regularly adding and dropping things. Rack copy volatility is the same, however, which leads me to conclude that a Standing Order system encourages customers to keep buying comics that they may or may not be enjoying.

In the long run, I’m not sure that that is going to be a good idea for my store, but the customers seem to like the new process (at least, no one is complaining about it, and everyone is buying the comics in their box)

Hm, I’m at nearly 3000 words now, and I have at least two more things I could talk about… well, I guess that leaves me ahead for next month, then!

Brian Hibbs has owned and operated Comix Experience in San Francisco since 1989, and is a founding member of the Board of Directors of ComicsPRO, the Comics Professional Retailer Organization. Feel free to e-mail him with any comments. You can purchase a collection of the first one hundred Tilting at Windmills (originally serialized in Comics Retailer magazine) from IDW Publishing. An Index of v2 of Tilting at Windmills may be found here. (but you have to insert "classic." before all of the resulting links) You may discuss this column here.

TAGS:  comics retailing, moby, point of sale

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