Maybe you heard, I‘ve bought a second store?
Yup, over the holidays, I bought all of the assets of Comic Outpost (2381 Ocean here in San Francisco), in a very sudden bid -- at or around the 18th of November, I saw the former owner posting on Facebook that he was closing at the end of the month. I thought, "Wait... what?" and got myself on the bus over there to see what was going on.
The former owner was burned out on comics, and he had hired several people to run the store for him, none of which, to my eyes, had any good handle on how or what to order for a modern comics store. The fundamentals of the business appeared to be solid enough -- the store was long-running (nineteen years between various owners), had no debt that I would be assuming, serviced the south side of town in a pretty substantial way, and had a large subscription base. But because of the over-ordering and the general poor state the former employees had left the store in, the former owner was looking at needing to invest a whole lot of time and money to right the ship, and he was too burned out on comics to make that step.
He was literally going to just close up the shop suddenly over a two week period.
Within 20 minutes, we had an agreement in principle -- we came up with a sum that he was happy with, and, in exchange, he'd keep the store running a few weeks longer than he wanted, while I secured the financing to make it happen. And in less than a month, on December 16th, I took over ownership and had a second store. It only took me twenty-four years!
What I bought had some problems -- first and foremost, the prior owner was running a 70% off sale for his last weeks in the place, so much of the best inventory in the place was gone. And very little of the lousy inventory moved as a result.
(This is your tip if you're trying to have a clearance sale -- never start with a 70% discount -- start in the 30% range, and slowly increase the discount from there. You want your cherriest stuff to fetch you the most money, and save those big big discounts for the less salable stuff. ‘nuff said?)
There's a lot of lousy inventory -- there is a loft that was essentially filled with unsorted longboxes of overstock from the last 18 or so months, and inventory in what I personally judge to be preposterous quantities -- I found five sealed cases of "Infinity" #1, for example, in a store whose back issue volume demand for that particular book is unlikely to be more than 20-30 copies over the next half-decade. There are between scores and hundreds of too many copies of scores of recent titles -- it appears to my eyes that whoever was doing the ordering was chasing variants, without taking into account the base cost of the underlying product needed to qualify.
That is to say: when trying to get, say, a 1:200 variant for Infinity #1, you need to take into account that it costs somewhere between $4-500, depending on your volume, to get that variant in the first place. That makes it hard to break-even if you're buying copies just to store in a box. Certainly, if you can sell those extra copies, or have some other manner of cost-recovery possible, it might make sense. But not just to throw them in your loft to rot.
The thing is, I've also found boxes filled with the variant covers, sitting unsold, even after the 70% liquidation sale, which suggests to me that either 1) someone was foolish and hid the variants for one reason or another, or 2) these books are not nearly as liquid as the buyer thought.
I have between 30 and 45 boxes of recent overstock that I personally consider sludge, and that's probably not worth spending an employee's time to process (especially since San Francisco has one of the highest minimum wages in America) -- I'm working now on plans to try to recover at least something in the range of wholesale on this recent overstock before I resort to the dire nickel-apiece liquidation schemes.
At the same time there is a basement literally packed floor-to-ceiling with older back issues, with rabbit-run paths of maybe 24 inches between them making it horrible and cramped and deeply claustrophobic down there. There could be great stuff there, but it will take months to find out, as they appear to be in wholly random order, with literally no rhyme or reason whatsoever behind it.
These are solvable problems, to be sure, and they're not even, inherently, bad problems, as the price I paid was, in my mind, largely divorced from the cost of inventory -- what I bought, from my way of thinking, was a nineteen year-old store with an established customer base whom I felt like I could do a excellent, detail-oriented job in selling them the comics and graphic novels that they wanted -- but it does represent an enormous time sink when that time can be used in several other more important tasks to get this store humming again.
But even those subs are a little problematic -- for a number of weeks the shop received either no, or only partial, new comics shipments, so there are a lot of (justifiably!) frustrated customers who need a lot of special attention and reassurances that their orders will be filled accurately from here out.
And, to add to that, the former owners had several policies in place that made it so that new comics weren't actually especially profitable -- high cash discounts, free bags & boards, no deposits on subs, and the like. They even chose to ignore local laws like the bag-fees that San Francisco implemented, so there's a certain amount of Wild West going on in the subs. Because of this, and my need to establish policies that make the selling of comics, y'know, profitable, I am expecting to lose 20-30% of the existing subs.
Now, as I've said many a time, my "main" store functions more like a bookstore -- 60% of our sales are books and graphic novels, and about a third are from periodical comics. Outpost, on the other hand, is a straight-up old-school comic book store -- from what I could tell from the fragments of the records I was able to access, well less than 20% of their sales came from books. And there was essentially no book stock on hand when I took over -- at least not salable stock. I pulled some 10 Diamond double boxes of graphic novels from the shelf that I'm going to end up liquidating at the main store. I found less than twenty pieces on the racks that I judged as having sales potential.
I don't want to change the essential character of this store -- I want it to continue to focus on comics (especially back issues, since I now have tens of thousands of them, and my main store does a desultory sale of back issues, at best) -- but I will be at least trying to bring in what I would consider to be the fundamental essential of backlist. Outpost is between two colleges, across the street from an elementary school, two blocks from a middle school, and within a mile of two different high schools. I think I can sell a few book-format comics in the space, don't you?
(In fact, I brought in my first of let's say eight waves of backlist stock, and we started selling books within minutes of putting them up on the rack, which suggests to me that there's really a wide possible untapped market here. But we'll see, I'm taking it fairly slow)
I'm pretty strongly of the opinion that to open a new comic store entirely from scratch -- to do so the right way -- probably takes a stock investment of something close to $100k. All of the $7 here and $15 there on backlist really adds up, especially when you consider just how many hundreds of books it takes to make a minimum stock position -- and it's thousands when you start trying to step past "just the basics." It is really the thing that has stopped me from considering a second store over the years -- the capital outlay while you hope that customers will find you and sign up for new periodical releases and so on. That's the nice thing about this situation -- there's a mature customer base well in place, so it's just a matter of getting the store organized, cleaned and stocked.
And, cleaned, oh yeah! Man, my running joke right now is that I don't see how people could have worked in the store for six months and not developed asthma -- other than the general level of dust around, the store had most of the windows covered up, so there was little-to-no natural sunlight, and they ran with the doors closed all of the time, so there was very little fresh air in the place. I changed that right off the bat -- we pulled out the curtains that had pictures of Spider-Man's Black Cat on them (yes, that's how to attract women and children, have Leather Tit Woman facing the street!), and flung the doors wide open. It's stunning just how many people are now stopping and looking with wonder that there's a comic book store there.
The place has some great decorations, though -- there's life-sized Superman and Batman figures, and an amazing movie version of Iron Man who lights up, and two different life-sized Spider-Men (not counting the cloth one hanging upside down from the ceiling, or the skeleton in the Spidey costume on the wall.) There are great vinyl movie posters all around, and all kinds of fun and decorative eye-candy everywhere. I really dig it, especially because my original store is very minimally decorated, much more like a traditional book store.
I have a few serious challenges -- what I took to be carpeting actually turns out to be felt squares that were glued down onto (cracked and sagging) linoleum... and only glued up to the point where the racks sat. When we move those racks, we find bare linoleum underneath of them, which is kind of a bummer. And I'm still not entirely sure how all of the electronics in the place work together (it has a kick-ass sound system, and multiple televisions, but I had to unwire most of it in order to prevent a couple of major fire hazards, and I still haven't figured out how the pieces all go back together seamlessly) -- but I'll learn. Yes, I will.
The other major challenge is the speed in which this came together gave me no real advance planning. When I opened the original store, I had at least 9 months to plan and consider and think it through. Here I had less than a month! Now, this isn't as bad as it sounds because, duh, I have an existing store, and I understand how to build comics-specific systems that work well over the long-run. I'm not having to reinvent a lot. But I am having to create ways for the two stores to work together. For example, one clearly doesn't want to reorder periodicals for one store if the other store has a giant stack sitting there, but there are a lot of steps to accomplish to move those books: you have to identify what's where, you have to communicate the requests, and generate invoicing to process those books. You have to decrement the stock in the sending store, and you have to actually move the books over. Sometimes, things that seem really simple and trivial turn out to have a nearly unreasonable number of moving parts to make them happen.
Systems that previously worked have to be examined and re-examined to make sure that they still make sense on a scale other than "owner-operated" -- learning the best way to communicate, and the best ways to make sure those communications are processed and internalized is a pretty huge challenge. I have an excellent staff, but each of us is learning new things every day, and there's a steep learning curve in front of us.
Honestly, we're probably six months or more until I will be even remotely happy with how the new store works, and in that time I also have to make sure that the old store doesn't fall apart from me not being there all of the time (it won't, but I am, let's face it, a bit of a control freak about some stuff).
It is harder than it looks at first blush.
Right now, I'm working seven days a week, for sure -- though a few of those "days" are actually "nights", from home, on the computer, remoted in -- which I know will get very annoying, very fast. The trick, for me personally, will be learning what stuff I can delegate, and what I can't.
As with anything, what's important is having a plan, of having systems that are clear, and of being able to directly and specifically communicate what your expectations are -- and being aware enough to know when your plans, systems, and expectations are wrong! What's funny to me is that maybe even five years ago, I was probably still too young and callow to make this work, but I probably now have the proper seasoning to know when to let go and how.
One thing that I'd like discuss in conjunction with this is the programs that Diamond and many of the major publishers (Marvel, DC, Dark Horse, Image, IDW, BOOM! and Dynamite) have for new stores. While I am, perhaps, not a "new" store, I'm considered an expanding store in this calculation. There's a pretty aggressive program of increased discounts, and/or full returnabilty for the first two order forms that is pretty helpful for new entrepreneurs.
As I said, I believe that to do a new store properly, is probably something like a $100k investment, if you're doing it right, so anything that can bring down those costs, or the risks underlying them, is a pretty good thing for the market. Even just looking at a slow roll in of backlist, I have a $12K invoice coming due soon... and that's after the increased discounts and deferred billing programs.
So I truly want to thank the participating publishers for having the wisdom to support these programs -- they should make it substantially easier for new stores to start.
Further, I want to especially thank those publishers for being willing to work with my specific circumstances. See, these programs are tied to your first two order forms. However, because of the holidays and specific deadlines and when order forms are in, and because I was dealing with an already open store (which I remind you, had no, or partial, shipments for the prior six weeks) I had about six weeks of orders that had to be in before I placed my first order form. That's a conundrum, to be sure. Thankfully every publisher that I contacted was not only willing, but enthusiastic to extend those opening terms for me.
Now, clearly, as an established account for 24 years (and one that is scrupulous about payment and keeping promises and so on), this isn't exactly a reach, and I think one could argue the bigger surprise would be if they didn't do so, but I'm still extremely pleased that the involved publishers and Diamond are so willing to work with my individual circumstances.
I'll make a few gentle observations, however: if there's any kind of "starting stock" package -- even a list of "here are the 50-500 best-selling graphic novels from each of the participating publishers", it was never offered to me. Clearly, I am able to kludge some sort of working base from my current store, but I also spent several long nights trolling through in-stock lists and found many books that I consider salable that the main store had at some point marked as Out Of Print, and never received any distributor-level notification that the work had gone back to print. I'm still fairly certain that there are chunks of work that I'm overlooking for Outpost (and maybe the main store as well) because there isn't any kind of systematic reporting of "what you probably want to stock."
Further, in talking to publishers, it doesn't sound like they're at all aware of any follow through from the program. Not one seemed to have the slightest understanding of how many stores have been served by this program, the success or failure rate of those stores, what the program is costing them, or what books are being sold. One would imagine that these are metrics that would be helpful. Similarly, I've really heard nothing from Diamond since the launch of the program -- and while we might understand this since, y'know, veteran retailer here and everything, I've talked to several other newer retailers who tell me that they also have not had any particular follow-up conversations from Diamond, or the publishers. It strikes me that this is exactly the kind of program which aggressive metrics should be developed for, and publicly shared, so that the entire industry knows how it is working.
These are solvable problems, but I think they're valuable ones for the market to grapple with -- having enough stores -- and especially well-capitalized, well-stocked stores at that -- is absolutely essential for the market to continue to thrive and grow. We need to find more and better programs that do even more to reduce the investment of starting new stores.
As you might guess, I'm bullish on the Direct Market, I'm bullish on physical print sales, and I want us to do almost anything that we can to find ways for new stores to open and serve a market that really is hungry for comics and graphic novels. I'm in this for at least another twenty years, and whatever we can do to make it easier for the next entrepreneur to come in and have their own 40+ year career in comics is something that we should probably encourage.
I opened my first store for $10k and a comic book collection, but those days are decades gone. It took me 24 years to get to store #2 because the barriers to open have gotten so high. We should keep lowering them, while encouraging a high standard of professionalism and stock.
Brian Hibbs has owned and operated Comix Experience in San Francisco since 1989, was a founding member of the Board of Directors of ComicsPRO, has sat on the Board of the Comic Book Legal Defense Fund, and has been an Eisner Award judge. Feel free to e-mail him with any comments. You can purchase two collections of the first Tilting at Windmills (originally serialized in Comics Retailer magazine) published by IDW Publishing, as well as find an archive of pre-CBR installments right here. Brian is also available to consult for your publishing or retailing program.