Tilting at Windmills: Another Penny Drops

Fri, June 20th, 2014 at 4:58am PDT

Comic Books
Brian Hibbs, Staff Writer
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I kind of dislike the penny.

I think there's a really good case to be made for abolishing it altogether -- primarily because it costs more to manufacture a penny than it the penny itself is worth, but also because my perception is that the overwhelming majority of customers don't seem to want to use them (or, let's be honest, cash itself -- nearly 80% of the transaction we make are using credit and debit cards).

There are a few mainstream attempts to get rid of the penny entirely, but, honestly, I'm a little tired of waiting for them to happen, so, at Comix Experience, we're unilaterally getting rid of the penny ourselves. We'll still accept pennies as long as people give them to us, and when we have those kinds of pennies about, we'll keep giving them out as change, and when a person pays with a card, we'll charge them "to the penny," but I'm done with buying rolls of pennies from the bank any more.

From now on we're just rounding pennies in the cash customer's favor. If it is $1.96, and you give me $2, I'm going to give you a nickel in change. Same thing if it's $1.99.

We managed three days in a row with no pennies in the main store before a little girl came in and bought her "My Little Pony" comic all in pennies. Well, dang. But we'll burn through those 300-ish in another week or three, and we'll try again.

So far, customer response has been pretty positive -- when people even noticed (which was few) -- and, more importantly, our count-out at the end of each day has been within negligible amounts of what it was supposed to be, so there's no meaningful negative economic impact on the store.

I wish we could also get rid of the nickel (those cost almost a dime to make!), and just have a cultural and societal understanding that we round (up or down) to the nearest dime -- but I think we're farther from that. But still, "Change (heh) begins at home" and all that, and I am proud to do my part to try to remove the penny from the world.


Here's a very curious thing about having a second store that I never would have anticipated whatsoever -- it is actually causing me to be a bit less of a tightwad.

As a single store, I found that my natural behavior for a quarter of a century was to try and get my orders as tight as humanly possible. Every week, when you take the unsold comics off of the racks you cringe a little as you realize how much money they represent to your bottom line -- each unsold comic is somewhere between (about) $1.40 and $2.45 in wasted money, so that shortbox is like $300 or so that could have bought your kid a few new sets of clothes, or food, or whatever.

But the problem with that kind of thinking is that you, by and large, keep yourself small by doing so -- it is more difficult to take chances on new works with that kind of thinking, or to properly catch all of the demand when something suddenly hits, because you're trying to minimize losses, rather than maximize growth.

With two stores, I was certain that I was going to get even more conservative and miserly in ordering because you don't want an extra copy of "Really Terrible Comic" #4 at both stores, right?

But what actually appears to be happening is that each store is so different in its sales and ordering patterns, that each store has entirely different "biffage" of comics. Moreover, when we sell out of a book, I can go to the second store first to try and restock, rather than having to go to Diamond. Not only does this get restock in place dramatically faster (24 hours, as opposed to the roughly two-week turn around based upon what I am willing to pay Diamond and UPS for freight and expediency), which ends up selling more product, but it takes the edge off biffage because there starts to be less of it.

The biffage still occurs, natch (how can it not? Ordering comics is art, not science), but the overall percentage, as part of the two-store ordering budget, appears to be shrinking.

Now, it may well be that I've just hit a particular "sweet spot" in ordering, and it may well turn out over the course of a year or more I'll find that I am ordering too many copies, company-wide, of the top-selling titles; but looking just at the bottom it looks like stock transfers are collapsing down the "death by a thousand paper cuts" which is normal for single periodical-driven stores.

I wouldn't have guessed that.

I still have a lot to figure out and/or learn about the best ways to move stock around, of how to identify books in week 3 or 4 of the cycle (I've got a fairly good system for week 1, where most of the action is), of exactly the right way to process and merchandise that biffage (the two stores are still handling it mostly individually, and I think that we'll be better off combining operations in some fashion, at some point) -- and it may well be that a year from now I come back to you laughing at my own foolishness in thinking that I got more efficient...

...but for today, I really do think that having multiple stores is making more ordering more effective and more reflective of what people actually want to buy.


The other thing I am finding nearly unbelievable is just how well back issues are doing at the new store.

I find it surprising for a few reasons.

First and foremost, the main store essentially "gave up" on back issues two decades or so ago. We still stock a small number of recent back issues -- primarily because what else can you do with the biffage coming off the rack after its "new" sales period ends? -- but it is really a token selection, done in a fairly desultory fashion.

And it doesn't do very well! I mean, if I sold more than a dozen pieces a week, then maybe I'd think, "Well, I'm missing out on something here," but we're not even getting the requests at the mothership, y'know?

I've been considering for years now, "Well, maybe I should just dump that entirely, and put in another rack for graphic novels." Because I suspect the GNs would generate more dollars overall. But I resist and resist because, damn it, a comic book store has to have some back issues, doesn't it? (I'm old.)

Second, in San Francisco at least, the stores that did specialize in back issues all collapsed and have gone out of business -- Amazing Adventures, Al's, even the experiment that was Neon Monster all went away. Now, none of those businesses had particularly strong frontlist comics and GN businesses to support and reinforce their back issue business, but they were specialists, and they all had what appeared to be very reasonable rents, and none of them are still here any longer.

Third, what you're constantly hearing from the "new" breed of comic book stores is that they're entirely eschewing back issues as a category. The few that are dealing in back issues appear to be trying to handle the "high end" portion of the market -- Silver and Gold and "Key" books -- rather than the "common stock" portion of the market.

The end result is I just don't have a lot of native faith that back issues are a viable "thing."

But, part of the assets I purchased when I bought Comics Outpost was 75-100K-ish of back issues which I have since slimmed down to about 20K pieces to keep), so I figure I might as well make an honest effort in selling the things.

We got rid of the 3/4 or so of the stock that we just didn't want, and kept mostly the "safe" material -- "Batman" & "Detective" but not "Shadow of the Bat" or "Gotham Knights," if you see what I mean? -- as well as shed a ton of Bronze and a very decent amount of "reader copy"-level Silver and Gold books. It's a pretty decent collection of stuff that we've been working through.

It took nearly three months just to cut the wheat from the chaff, about two months to stage what was left, and we've been spending the last two months unbagging and rebagging the initial on-the-floor selection of stock (like the mothership, we're only keeping a single copy of any given book out on the floor at once because there isn't space otherwise), and doing the pricing. This morning I just started pricing on "Superman" (and I'm doing it in Alphabetical, so it's therefore mostly T-Z left), and we've been putting out stuff as it got processed.

Because we only keep a single copy of any given book out on the floor we keep what we call the Death List at the counter, where we log down every back issue we sell (Why is it called "The Death List"? Honestly, like the term "Biffage," I don't recall the origin, it's just what we've always called it) -- at the Mothership, it generally takes about two full months to fill up a single page.

At Outpost? The books aren't even all out, I've not promoted the existence of the back issues at all, and it is very very much a work in progress, and we just started our eighth page of Death List! If this is what it is like while we're still parked in the garage with two of the wheels up on blocks, I wonder what it will be like when we begin actually street racing.

Plus, dang, that store really likes its "bargain books!" At the main store we have had both "quarter" comics and "dollar" comics (though I just eliminated the 25-cent ones a week or two back) -- but we only were selling maybe a short box a week of quarters, and maybe half that of dollars. Outpost? Closer to two long boxes a week of dollar books. Whoa!

Again, I'm trying to remain cautious about how I proceed here, because it's entirely possible this is just the result of a couple of years of pent-up demand finally flowing again, But I have to say that the velocity that has been shown so far is at least twice as high as I would have ever dared dream in all of my filthiest dreams of avarice.

I mean, to the point where I'm actually thinking that we might have to start buying comics again if this kind of velocity holds up, because there is no way we'll be able to fill that kind of weight even of "bargain books" from our biffage -- we'd be completely out by, um, maybe November, max? (I try to run a reasonably tight ship.)

What I'm really trying to figure out is how much of this is blip and how much of it is a new paradigm. I mean, I can conceive of a reality where, because essentially no one is doing back issues as part of their business model any longer in San Francisco, that staking out that segment of the market might actually be reasonably lucrative? (though not enough to solely operate a business based upon)

Or, is there something that specific to the customers on the South side of town and their collecting interests? When we went from 90% of my floor space to 5% being back issues at the Mothership, it wasn't because I didn't want back issues -- it was because they weren't selling well enough to justify the space. But when I made that decision, we were drowning for space for graphic novels at the time, and I could clearly see the growth potential in a category that was, for all intents and purposes, new at that time. Back in those days, too, we tried to stock every graphic novel that came out, something that would literally bankrupt me if we were to try that today (because, even for a book specialist, the dirty secret is most TPs and GNs sell very poorly).

So, at Outpost, we have a very mature market understanding of the TP and its potential and how it might fit into that space. Outpost is a smaller store, with very little walk-by (compared to Divisadero St., at least), so we're really pursuing a book strategy of only stocking material with the widest possible audience, or that turns really well. Unlike Divis, Outpost doesn't have the traffic to stock slow-turning obscure books "just to say we have them" or for the "prestige" of doing so. Carrying a tenth or less of the TP stock that Divis has at Outpost makes a ton of sense, because Divis has it. We can do the stock transfers in a day in most cases, and no more than two days at the worst case on the "obscure" stuff.

(I was also absolutely assured by the previous owner that "trade paperbacks just don't sell here," but I've proven for myself in the last seven months that the issue he was having was of understanding what the selection should be -- books are about a third of Outpost's business now.)

But, yeah, ultimately there is a lot of neat experimenting and reversing of long-held (and hard won) beliefs that's possible now with the second store. I'm still deeply suspicious that I might need to have a massive clearance sales on back issues in a year or two as it turns out that no one actually wants those copies of "Detective" at all, but right now the early results are that when you're in a market with a weak back issue market, that there appears to be at least some somewhat substantial business that can be made by servicing that market.

I wasn't sure if I actually believed that. But I'm excited to try and find out.


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.

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