cynical_8I’ve been working in comic book stores for a long time, 15 years this year.

Not as long as many of the “lifers” I’ve met during that time—the men and occasional women who will retail comics and pop-culture ephemera until the day they die or quit in disgust—but long enough. Long enough to remember the Direct Market of comic book specialty stores the way it was before Marvel, Heroes World, and Diamond. The way it was more-or-less since it’s inception, before immense greed and short-sightedness closed 2/3s of comic stores in probably 3 or 4 years.

I wasn’t terribly invested in comics retail at the time, I was too interested in comics as a medium. The Invisibles! JLA! Sandman! Awesome. The bits and bobs of ordering, sell-through, inventory tracking, I learned all that on the job. I also learned to fear the collapse of comic book stores—and the loss of my job—there too. In the second year I’d worked in the comic book store, when Marvel bought Heroes World distribution and pulled their comics from every other distributor over the space of a few months, I have to admit that I just didn’t really grasp all of it… But I knew enough to know that if my store stayed open, things would be very different.

In a little over a year we were getting all of our comics from Diamond—who had until that point never distributed in Canada at all. All of the local distributors (previously the Kings of Comics) were reduced to selling comics supplies and diversifying into sports cards, magic, RPGs, and mountains of old comics stock. When they didn’t go out of business entirely (owing a lot of people a lot of money, I found out years later). The industry had been through a major shift, a number of stores closed up shop in the Toronto area. We stayed open (though there were quite a few lean weeks there), and I learned what it feels like to wonder if the comics will be coming out next week or not.

The thing about all of this is that during this time I spent a lot of time on the internet. A Lot. Listening to fans bitch, to retailers bitch, to publishers and creators bitch. The comics industry was a cacophony of bitchiness, and I jumped in guns blazing. Through it all, the one big narrative through in the discussion, was that it was somebody else’s fault. A fan buys 5 copies of X-Force #1, and then becomes disillusioned 12 months later when he realizes the books are shit and never going to be worth anything? The Retailer’s Fault. A retailer orders 100 cases of fucking Warriors of Plasm Trading Cards + Binders and can’t sell one? The Publisher’s Fault. Publisher sales drop through the floor across the board? The fans fault. DEATHMATE BLACK? God Has Forsaken Us. And the industry collapsed in on itself.

It’s about 15 years after all that nonsense today, and things seem “stable” but really, that’s just a convenient lie that we’ve all bought into. Things aren’t stable, behind the scenes (and sometimes spilling onto message boards and websites) people are very worried. Fans, Retailers, Publishers. Distributors. But the thing that to me is the most disconcerting and heralds the biggest change? Diamond Comics Distributors drastically raising their order minimums. They did this a few months back. This action has shaken a lot of publishers out of the industry, and it’s meant some pretty bad things for a lot of people. But really, and realistically, The Previews catalogue is not any better or of higher quality than it was a year ago. I am reminded of this the last Tuesday of every month, when I race through that thing at break-neck speed, It’s just as tough a slog with most of the same bright spots as before. Hell, 100 pages each of Marvel and DC is more than enough to depress you on its own. But what the increased order minimums have really done is make my job as a retailer much more difficult. Why? Because of the things have been taken out of the catalogue that I have to go hunting for. Let me give you the example that prompted me to post this in the first place:

Last month, a customer asked me for Cynical Orange Volume 8, a manwha title previously published by ICE/Kunion, and picked up by Yen Press a year or two back. I checked my computer, and saw that we’d never received Cynical Orange Volume 8, despite my customer’s insistence that it was out. According to the YEN website? It was in fact released. It just never got offered through Diamond. So we didn’t have it.

Now I want to point something out here, something that’s really, really important. This customer is asking for a title that isn’t a popular one for us. It’s called Cynical Orange, for heaven’s sake. It’s a Korean shoujo title, which from a sales point of view? Not the strongest seller. But this customer is not just a customer for Cynical Orange. This customer buys, on average, 10-20 different new manga from us in a month. She does this because our prices are good, because we get things in in a timely way, and because we carry everything. We’re competitive, timely, and comprehensive, and so she comes here and spends a few hundred bucks a month, every month. And now, we’d missed a volume of her favourite manga, that she saw on the shelves at one of our competitors. Not another comic shop of course, but of Borders, Barnes & Noble, Chapters, Indigo, our real competitors, big box retail chain stores. What happens to us when we’re not as competitive, or timely, or comprehensive? Any one of those? We lose the sale. And we MIGHT lose all of the sales.

Of course I assured her I’d have it next week, got on the phone to any number of other distributors who actually carry Yen’s full line, and ordered it there. Got it. She’s a happy reader.

Here’s the thing: This wasn’t something that had been offered and then cancelled. We get little reports from Diamond when something we ordered from Diamond isn’t coming out. We then use that information to track down the item through another source (if it’s still coming out) or to disappoint a customer (if it’s not). This is something Diamond simply never solicited, despite soliciting other books from that publisher. This was, and I mean this in “comics retailer terms” and not to be too hyperbolic, but this was chilling. What else had I missed from Yen? From other publishers? Was I serving my customers or had I dropped the ball?

Of course the next thing I did was go through the Diamond catalogues for May, June, July, and August, and tried to figure out WHAT ELSE I was missing by ordering Yen’s books through Diamond. It was a good handful of books. Despite Yen being an imprint of the single largest publisher of books in the world, Diamond wasn’t carrying them all.

So Then I cut all of my orders of Yen Press books from Diamond. I’ve started ordering Yen Press through alternate distribution arrangements. It turns out that now I get Yen’s full line, I get them on time, and for more-or-less the same price as Diamond. It means another hour of work gets piled on me every few months, and it’s certainly not as convenient as just ticking more boxes on the massive Previews order I have to do anyway. But it means that I can still serve my customers, and keep them in my store, where I want them to spend money. I can do my job as a Direct Market Comic Book Specialty Store by going outside of the Distributor of the Direct Market of Comic Book Stores. You gotta admit, that’s pretty fucked-up.

It means that Diamond is losing that money. It’s no great shakes, admittedly, a few hundred dollars a month retail, more when it’s something big like James Patterson’s Maximum Ride or Svetlana Chmakova’s Night School. But I’m not going to be comparing and contrasting orders between two or three sources because of those sources is dropping the ball—my time is too valuable for that nonsense. I’ve talked to other retailers who, forced with the same conundrum, simply stop ordering lines like this altogether, letting the sales go to other comic stores, or chain stores, or the internet. That’s money out of Diamond’s pocket too.

What happens when Direct Market retailers can’t trust Diamond to keep them stocked?

For us, it means going elsewhere with surprising frequency. It means that the Direct Market has started to fade, losing relevancy, immediacy, its massive buying power and its ability to be heard. Instead of comic book retailers asking Diamond to bargain with pubs on their behalf for the common good, it becomes up to those same retailers to bargain for themselves with the great big publishers of material. It gives rise to direct market retailer organizations like COMICSPRO, who are attempting to fill the gap left by Diamond but honestly, I’ve never really found we had much in common with the concerns they’ve expressed publically.

I feel like it was Diamond’s (thankless) job to stabilize the Direct Market following the Marvel/Heroes World clusterfuck. I feel like, once stabilized, Diamond decided it was their job to maintain the status quo of distributing Marvel and DC Comics—and their closest imitators—to stores and retailers who’ve never really been educated on how to stock or sell anything else. Has there been a self-publishing success story like Bone since Diamond assumed control of the Direct Market? Could their be? My feeling is, institutionally, no. I feel like Diamond closed that door, and now the radical innovation (and radical success) happens entirely online, in webcomics. Which as I’ve mentioned before, doesn’t generally help me as a direct market retailer.

I’ve said this before, but: The idea of the direct market really is great, a specialized comics distribution network that caters to thousands of stores with a specific interest in them? Sign me up! Unfortunately, the actuality of the DM stopped living up to the ideals of the DM a long time ago.

With the back of the catalogue shrinking every month, the front of the catalogue bloating more and more to maintain the illusion of stability or “growth”, and extrapolating my own ordering practices of pulling orders away from Diamond, I feel like we’re just about done with the notion of a “Direct Market”. I feel like in the very near future, Diamond will exist as a mechanism to on one side distribute graphic novels from their clients to bookstores (Diamond Books), and on the other to distribute superhero comics to comic book stores (Diamond Comics), and everything else will exist through other distribution channels, or working direct with the content producers themselves. I feel like we’re 75% of the way there now.

And I admit, I’m pretty cynical. But honestly? With Amazon best-seller lists, and New York Times Graphic Novels Bestseller lists, and the popularity of manga, and graphic novels, and the big movie tie-ins and the rapid-fire collection of superhero stories into graphic novels, and THE INTERNET in all its forms (pirates especially), one day we’re going to look around and realize that no one really cares about the notion of a “Direct Market.” Everyone else will have moved on to the idea of graphic novels as a mass-market medium, available in all kinds of formats, from all kinds of venues.

Except the lifers, like me.

- Christopher


38 Comments on “I Am Cynical (Orange): The DM won’t end with a bang, but a whimper.”

You can track this conversation through its atom feed.

  1. ADD says:

    I have a feeling this post has been coming for a long time, Chris. Thanks for taking the time to describe the reality of what is happening in such vivid, depressing detail. I sure do miss the days when virtually any comic book store you walked in to was a treasure trove of unheard of wonders, a beneficent byproduct of multiple distributors all vying to be the most relevant and the best at what they were doing. That’s the model that allowed Cerebus, Love and Rockets and (yep) Bone to find their audience despite the fact that initial orders on all of them were virtually non-existent. It’s heartbreaking to think the next Jaime or Gilbert could be out there right now making nascent miracles of comics in their bedrooms that we’ll never know about thanks to Diamond’s shortsightedness and eye-poppingly poor stewardship of their role in the current scheme of things.

  2. George Rohac says:

    @ADD

    Those people ARE making miracles, they’re just doing it online. Which, as Chris said, is a huge problem for direct market.

    And don’t get me wrong most folk you talk to that do webcomics want to “do a book” at some point. Collect their work or just do something original, but the system is so backwards and such a pain it drives people away. Why deal with waiting for advances or having to meet numbers when you can slap up a preorder button on your site and do a small print run of a book?

    Creative people are still going to do amazing work. We just may not have physical copies, which, for those of us who grew up with floppies, is sometimes hard to deal with.

  3. What if you published a manhwa and nobody knew? « MangaBlog says:

    [...] patron of The Beguiling requests vol. 8 of Cynical Orange, and manager Christopher Butcher realizes he never knew it existed because Diamond Comics Distributors never listed it. He find the book but [...]

  4. Simon Jones says:

    Just to share my own little anecdote… once an item gets solicited, but fails to meet sales requirements, it gets removed from Diamond’s system (at least, that is what happened to us.) As you know, the new minimum applies to re-solicited items as well. So what could potentially happen is that a backlist/reprint item *for which Diamond still places orders occasionally* could become no longer available, if a re-solicitation doesn’t meet the minimum. (Again, this has happened to us.)

    I’m sure Diamond has their own internal reasons for doing this, I just can’t quite fathom them myself. Anyway, this means publishers have to be far more strategic when considering to re-solicit a title.

  5. Mhigh says:

    There’s the same bitter cynic in me as well, and I saw the early stages of the same thing you are seeing now, except from the alt-distributor angle, some two-plus years ago. The direct market mechanism for distributing comic books served its purpose for many years, but the current broken version of the direct market we have now is well beyond its shelf life. All I can say is that I am very glad that I now earn my daily bread outside of the comic book industry, ’nuff said.

  6. Journalista – the news weblog of The Comics Journal » Blog Archive » Sept. 8, 2009: Who took Robin’s virginity? says:

    [...] Christopher Butcher asks, “What happens when Direct Market retailers can’t trust Diamond to keep them [...]

  7. Elin says:

    You nailed this, Chris. I am totally linking to this and planning to force people to read it all day.

  8. Jamie Coville says:

    I did some thinking about this.

    I think Diamond is trying to be 2 different companies, one which involves risk, and one that doesn’t and they don’t want to be company with risk.

    Allow me to belay some obvious points as I write this out. When retailers order books from Marvel/DC they aren’t buying them from Diamond, they are buying them from Marvel/DC and Diamond is just the agent. Diamond just gets paid to distribute the books.

    This makes them the in-and-out distributor they are used to being and probably still want to be as they made a lot of money that way.

    When a retailer buys a book from a publisher (ie the old system), they are buying it from Diamond. Trying to cut their risk as always, Diamond takes the pre-orders, cuts a purchase order for that amount + extra for damages and reorders. Diamond then owns the books, unless they’ve got some sort of ‘we return for refund/credit’ what doesn’t sell in their contracts with publishers.

    If by some chance there are very few damages and no immediate re-orders, then Diamond is stuck with those books until they sell out. Unless they have a return to publishers clause agreement with the publisher up above.

    This probably isn’t such an issue with comic books, but is with TPBs due to the amount of money and space involved. Plus everybody expects comics to be sold out eventually, TPBs people expect to remain in print and available for a long while.

    The way the industry is now I think most retailers want Diamond to be a distributor/warehouse for books they turn, hopefully at minimum, 3 times a year. For Marvel/DC that’s not a problem, they are an agent and I’m sure Diamond is paid extra to have those books available regardless of how they sell.

    Outside of the big publishers it gets a little more dicey. Lets assume a 1000 comic shops want to keep a smaller publishers TPB in stock, one that does turn say 3 times a year. That would be 3000 books sold over the course of a year, / by 12 months, 250 books a month.

    Assume the book has a $19.99 price tag. We’ll use $20 to keep math simple, the rest of my numbers below are for simplicity’s sake too.

    Assume Diamond buys it from publisher at 40% off, which means they get it for $8 per book. They sell it for 55% ($11) off to retailer means they make $3 dollars per book. Totaling $750 per book, per month.

    Does that $750 per month cover all their costs? Staff, square footage of warehouse space, maintenance, overhead, etc?

    I’m being generous with the 1000 comic shops thing and with some books the 3 turns a year thing too. Add in that Yen books cost much less than $19.99 too. My Night School Vol.1 is $10.99 US, $11.99 CND.

    There is a good chance Diamond is not making money on keeping those books in stock. So I see why Diamond is willing to cut them. Add to it that historically Diamond is used to being an very profitable in-and-out distributor with little to no left over stock there is probably some resistance to trying to make it work, even if they can.

    They are probably quite happy to be Marvel/DCs agent and unless the other stuff is going to make them good money they aren’t going to bother with it.

    A larger (bookstore) distributor can do it. They’ve got a much greater number of books in stock to spread their costs over, making the numbers workable. Plus the bookstore market is much bigger with the amount of stores and all, sales are likely much higher.

    It might just be that the DM is too small to make a TPB focused distributor work, except for the much better turning books. These days I don’t see any business willing to break even or lose money on certain books for any reason. As comic sales decline so does Diamond as the DM market is probably not big enough to do what we want/need it to do in terms of diversity of books.

    The real shame in this I don’t see a future BONE coming out of bookstore distribution either. I could be wrong, but my understanding is bookstore market is even less friendly to self publishers than the DM is.

  9. Robot 6 @ Comic Book Resources – Covering Comic Book News and Entertainment » Comics A.M. | The comics Internet in two minutes says:

    [...] Retailing | Retailer Christopher Butcher wonders, "What happens when Direct Market retailers can’t trust Diamond to keep them stocked?" [Comics212] [...]

  10. Grant Goggans says:

    Chris, you’re totally right. I’d like nothing better than to drive up to my “local” store in Athens (Bizarro Wuxtry) every week there’s a new 2000 AD book out. But Diamond decided against soliciting literally half of Rebellion’s line (Flesh, Button Man, ABC Warriors, etc), and over the last five months, turned around and cancelled orders on half of the titles that they did solicit (The VCs, The 86ers, etc). So not only is money that I would be spending at Bizarro Wuxtry going to an online seller in England, I’m not in the store eyeballing the new release rack and making impulse buys of things I read about after they were solicited. The only winner is my car, which will be making a trip to Athens maybe every five weeks instead of every three.

    Well, it turns out the Flesh book has a really stupid misprint, so I’m kind of glad I got to hear about it before I paid for it; now I can wait for a second edition before giving somebody in England who’s not in the direct market my money. I guess I win there, too. Hope it’s not one of them pyrrhic victories.

  11. Elin says:

    Jamie: Diamond buys from publishers at 55-65% off cover price. Retailers get anywhere from 40-50% off cover price, depending on what discount tier the publisher falls under. (They have letter codes, as I recall, A being the best, and F or G being the cruddiest. There are retailers who do not order anything in the D-G discount range…)

    When we did $2.95 comic pamphlets, that meant we got about $1 (or less) per book sold through Diamond, since as smaller publishers we had no choice but to have the 65% off cover discount tier with Diamond. Yet the discount to retailers on our product was one of the worse ones- I think we were E, F, or G, which meant the entity making the biggest profit on our small press books was Diamond.

  12. Will West says:

    @Jamie Coville: That has got to be one of the best explanations of the system that anyone, including those at Diamond, has ever provided for the system. I can’t find fault with any of it, and you certainly hit the nail on the head. In order to protect their risk, Diamond simply doesn’t over order on the non-premier books. There are consignment publishers outside of Marvel and DC, but that status isn’t just given to anyone.

    @Simon Jones: If a book is cancelled, the orders might disppear, but it should still be in the system, as an item code was created, which would be kept for historical purposes. Unless something has changed…

    As for the Cynical Orange situation, that *is* really unfortunate. I actually had some experience with the title in my time. I really don’t want this to come out as a case of “blame the publisher”, so I want to get that out of the way out of the gate. When I worked on Previews, with a lot of the manwha books, we always had an issue synching up schedules. At times, it would be hard to gauge the street month, as publication dates had to be factored into international shipping. A lot of times, we wouldn’t even have info on a book to really even solicit it. We’d get a schedule at the beginning of the year, which of course was subject to *many* changes. If you look at Previews, that’s what happened when you see a blurb for “Kissing Moonlight Vol. 9″ or whatever, and it’s just some generic description of the series, but not the volume. So, a lot of the time, due to poor communication on both sides regarding scheduling changes, we’d miss putting these in the catalog. That, in turn, might lead to us putting it in the next catalog, but due to the fact that Previews is published 2 months out, it would lead to book chains getting the book first. The best way to handle those sorts of catalog omissions is to put the announcement/item code in a Previews Plus newsletter, but I’ve heard that many retailers don’t even notice those. So, if the book does get out, it’s late, and the orders aren’t what they could’ve been. It’s resolicited when the next volume comes out, leading a lot of folks to wonder “When did that come out in the first place?” Again, it’s an unfortunate situation, but I think that might have played into what happened here.

  13. Simon Jones says:

    Mr. West–>

    Hey, how ya doing. =)

    Well, I don’t know for sure if it is policy, but I’m basing this on personal observation. After soliciting a new printing that failed to meet the minimum, the entry for the original disappeared from the inventory/on order report page. Even if the item code still exists somewhere, I’m assuming the item itself is no longer being offered.

    That has certainly made me less willing to chance a re-solicitation, or solicit a reprint. We end up pushing those sales primarily to other distributors and online stores.

  14. Josh Fitzpatrick says:

    Chris,

    Just to echo previous posters, thanks for the detailed article about how Diamonds minimums are slowly squeezing the air out of the industry. I am someone who does most of their comic shopping via Amazon, or direct from the publisher. It’s pretty painful, but when my local shop never even heaqrd of Kramers Ergot, I cringed, but I looked around at the sheer number of Marvel/DC spandex titles and magic cards and realized why I have to order from Fantagraphics, or D&Q directly, or shutter Amazon. Not that there aren’t good shops in my local area (Comicopia, and Million Year Picnic in Boston are both excellent shops.) but I don’t exactly get to the city that much, when I realized the chain I shopped at for years didn’t know what Kramers was, I knew Powr Masters would be completely lost on them.

    It’s a shame the industry is always crying for something new, but never embraces it. Diamond is putting there eggs all in one basket, which is going to backfire on them, as the aging fanboys eventually have to spend money on things other than comics, and there is no new blood to replace them. The downside of course being that good shops, that care about their customers, and not just todays hot event book stand to bear the brunt of Diamonds myopic business plan.

  15. THE BEAT » Blog Archive » The coming end of the Direct Market says:

    [...] Chris Butcher has this Tuesday’s must-read post on how Diamond’s new 2009 policies have left the DM less flexible and less relevant… [...]

  16. Your Comic Book Store is Probably Dying « OMEGA-LEVEL.net - From comic books to cumshots. says:

    [...] I came across this great article by Christopher Butcher that was linked from another blog I frequent, The Beat. Here’s an [...]

  17. Jason Thibault says:

    I’m glad someone is talking about this.

    In the 1990’s I would commonly walk into a shop and “discover” things like From Hell (individual Kitchen Sink Volumes), Eight Ball, Black Hole and Gregory. That was just from stock sitting on the racks / shelves that I could browse. And back in the day, several shops in Montreal racked a lot of books by even smaller publishers. There was more room to take a chance.

    Our book got dropped by Diamond this summer. Not enough orders. Diamond gives us 38% of the cover. We pay the printing, shipping (expensive from Canada), marketing etc… For experiments like black and white anthologies this is never going to fly in the direct market. Direct sales (online, cons) and Amazon are better options. If a publisher sells through their own affiliate links on Amazon they retain 51% of the sale. We still pay the shipping but we have access to tens of millions of more customers.

    Anyone moving print runs of 2000 or less are going to have to do it the long and hard way. The small publishers will have to adopt new methods or die out. Webcomics are the only way to go for us.

    -Jay

  18. Torsten Adair says:

    It is unfortunate that where Diamond once competed with other DM distributors, it now does not compete with book distributors. Once Marvel moves to Hyperion/HarperCollins, it will be that much easier for DM stores to acquire books from a general distributor at a similar discount, or direct from a publisher at a higher discount if minimums are met.

    The great irony of the Heroes World/Capital/Diamond war was that retailers complained about having to use multiple distributors to order merchandise. Now there is only one major distributor serving the DM…

    Comicbook stores have a decision to make: do they become hobby shops with a significant book and magazine section, or a book store selling sidelines?

    Here are the major players in bookstore graphic novels:
    Random House (DC, Titan, Pantheon, Knopf, Del Rey, Wizards of the Coast, Flight, juvenile)
    HarperCollins (Simpsons, Tokyopop, juvenile, Scott McCloud, Larry Gonick, Peanuts, Boom! Studios (Canada), FS&G (Canada))
    Simon & Schuster (Amelia Rules, Viz, juvenile and adult lines, Boom! Studios (U.S.))
    W.W. Norton (Will Eisner, Fantagraphics(U.S.))
    Scholastic (Bone, juvenile)
    Andrews McMeel (contemporary comicstrip collections)

    Almost all of the other GN publishers are available via Diamond Book.

    Also note: the above publishers also offer other, non-graphic novel books which might appeal to comic book fans (art books, film and television, Star Wars…)

    Innovation is now done online. Like many old-timers (collecting since 1984), I flip through an old Amazing Heroes Preview issue and marvel at the sheer diversity of titles.

  19. Torsten Adair says:

    Oops… forgot Macmillan… First Second, FS&G (U.S.), Henry Holt, Papercutz, Seven Seas, Drawn & Quarterly

  20. ¿Está el mercado directo en peligro? « Comicopia says:

    [...] posibilidad de que los tenderos se estén buscando la vida fuera de Diamond como señala hoy en una columna Chris Butcher. Tom Spurgeon apunta que no sería nada extraño que alguien comprase Diamond en los [...]

  21. Joe Field says:

    Chris—

    This is some good analysis.

    Diamond had LOTS of change forced on them by the Marvel/Heroes World debacle. That led to the brokerage deals with DC, Image, Dark Horse and eventually Marvel. So instead of Diamond’s former margin of 15-20-ish% of cover price on sales from those publishers, Diamond has been trying to get by with roughly 6%. That’s six percent from publishers that now have a combined market share of 80+%. Something had to give.

    By the way, Diamond didn’t start out as the “We’ve got everything” distributor. There was a time when Diamond didn’t stock any adults-only material and bypassed a fair amount of small & vanity press.

    That said, I want to give a slightly different perspective. The Marvel/Heroes World debacle did NOT cost the market two-thirds of its stores. Many, many stores were double counted since retailers had accounts with multiple distributors. There may have been an artificial high of 10,000 total accounts, but I doubt strongly there were ever anywhere close to 10,000 stores.

    When we opened Flying Colors in late ’88, the estimate was there were something around 3000 comic shops and that swelled to 3500+ with the opening of the Tim Burton BATMAN movie in ’89. Fast forward to post-Heroes World and Marvel’s bankruptcy in the late ’90s and the market was back down to roughly 3500 stores. I know that number is down in the last ten years, but it has been relatively stable in the last three or four years. What the actual count is becomes Diamond’s proprietary info.

    Diamond’s upping the minimums to be included in Previews is something that does mean more work for the retailers wanting to “have everything”… and more work for publishers not meeting those new sales minimums.

    But in this age of specialization and the attendant proliferation of comics’ product from scores of publishers, there was no way Diamond could reasonably be expected to do a good job stocking and distributing *everything*, so Diamond management have done something retailers should take note of— they have made some bottom-line oriented decisions to keep the company profitable….

    …reminding us all that this is about commerce as much as it is about the art.

  22. Brian Hibbs says:

    “So instead of Diamond’s former margin of 15-20-ish% of cover price on sales from those publishers, Diamond has been trying to get by with roughly 6%. That’s six percent from publishers that now have a combined market share of 80+%. Something had to give.”

    That’s an excellent point, and one I think many people do not often consider, but I think it’s fair to point out that Diamond’s often making a 20%+ margin on smaller publishers on firm sales, where their inventory obligation is effectively zero.

    A $5 object that’s offered at 40% (37% on reorders!), and is bought by Diamond at 60% off costs retailers $3 — that’s a ROI, for us, of 0.6. That same object costs Diamond $2, which gives them a ROI of 0.67.

    When you add the probable margin they make on shipping, I think it’s fairly obvious there’s more than a few things they make more money on than retailers do.

    “But in this age of specialization and the attendant proliferation of comics’ product from scores of publishers, there was no way Diamond could reasonably be expected to do a good job stocking and distributing *everything*, so Diamond management have done something retailers should take note of— they have made some bottom-line oriented decisions to keep the company profitable….”

    That’s a real “fair enough” point, but I think the real issue is the lack of information and communication — it seems to me that Chris’ real issue was that he believed that Diamond was at least *soliciting* all of Yen’s line.

    I sorta think that Diamond needs to be “all in” or totally out publisher-by-publisher. IF they’re carrying new work from Publisher A, then they kind of have to carry all of it, at least as an initial or special order, OR they need to declare what they’ve declined to carry.

    -B

  23. Journalista – the news weblog of The Comics Journal » Blog Archive » Sept. 9, 2009: Something had to give says:

    [...] “Diamond had LOTS of change forced on them by the Marvel/Heroes World debacle. That led to the brokerage deals with DC, Image, Dark Horse and eventually Marvel. So instead of Diamond’s former margin of 15-20-ish% of cover price on sales from those publishers, Diamond has been trying to get by with roughly 6%. That’s six percent from publishers that now have a combined market share of 80+%. Something had to give.” – Joe Field [...]

  24. M Kitchen says:

    Great post.

    It would be great to get your thoughts on how the direct market SHOULD be run. Also your thoughts on how INDY artists should ideally get their books to market – regardless of Diamond and their cut-offs.

    In fact; that would make a great article or even youTube documentary.

  25. Matt Lehman says:

    I agree, because *I* certainly can’t keep track of which books from publisher A are/aren’t carried by Diamond. Our “Cynical Orange” was Melancholy of Haruhi Suzumiya. A customer saw it at another store, but we never received it from Diamond in spite of having ordered it. After contacting Diamond I was only told that their Plattsburgh warehouse hadn’t received the book, but with no additional explanation. Since my confidence was undermined, and we work hard to maintain a reputation of having a comprehensive stock of manga, I decided it would be easiest to order all our Yen Press books from a book distributor, as we’ve doing a while with all our Viz & Del Rey manga.

    In fact, we received all the new Yotsubas last week and Diamond accounts are receiving them this week. Penny wise and pound foolish it seems to me.

  26. Observations from the Balcony | Christopher Butcher on the fading of the direct market says:

    [...] Butcher, manager of The Beguiling, offers a reasoned essay on why the direct market will won’t just end but will instead gradually shrink and fade into [...]

  27. Joe Field says:

    Brian said:
    “…Diamond needs to be “all in” or totally out publisher-by-publisher.”

    I’m not trying to be the Diamond apologist here—and I do understand the difference between distribution and retail— but don’t you as a retailer, Brian, make decisions that some titles are just not worth carrying even though they may be from a publisher that has other better selling titles?

    “…OR they need to declare what they’ve declined to carry.”

    That’s a very reasonable suggestion. Let’s hope someone at Diamond is listening.

  28. Brian Hibbs says:

    “but don’t you as a retailer, Brian, make decisions that some titles are just not worth carrying even though they may be from a publisher that has other better selling titles?”

    The difference is that if I don’t stock something, I’m still willing to make a special order for it. Diamond isn’t, any longer.

    This, to me, is one of those “penny-wise, pound-foolish” kind of deals — The Beguiling and Comicopia no longer buying ANY Yen product from Diamond is surely going to cost them more money in the long run then the nickles they might “lose” by being willing to Special Order some of the line.

    Especially in light of today’s news. Diamond’s put all of their eggs in one (well four) baskets, and their two largest eggs potentially may no longer be with them in two years. They should have spent the last decade ramping UP the number of titles/publishers they distribute….

    -B

  29. David Bird says:

    “they need to declare what they’ve declined to carry”

    Brian, what business declares everythings they don’t sell?

  30. ADD says:

    One that has a virtual monoply on an entire industry is certainly obligated to do so, so its victims can try to work around their incompetence.

  31. Blog@Newsarama » Blog Archive » Linkarama@Newsarama says:

    [...] can’t trust Diamond to keep them stocked?”: Blogger and retailer Christopher Butcher has an excellent—and kind of alarming—post about an incident in which a faithful regular  Beguiling customer requested a particular manga from [...]

  32. Simon Jones says:

    –> David Bird

    Sorry to jump in here, but I think it isn’t unfair to say that most retailers have (had) an expectation that Diamond would carry the complete line of new releases from a major manga publisher. Just hypothetically speaking, if something similar were to happened with a DC or Marvel book (an exclusive for a certain big box store, for example), I’m sure Diamond would do everything they could to explain why they weren’t carrying it.

    Certainly, in this case the publisher also bears some responsibility for not communicating to retailers. But for Diamond to have a policy on how to deal with this sort of thing would be nice…

  33. David Bird says:

    Simon, I was responding to a comment Brian made, not assuming most retailers felt this way. I am a retailer (albeit for a general bookstore) and I never have.

  34. Torsten Adair says:

    Okay… here’s something that has me wondering…

    Diamond sells stuff one-way, non-returnable. Why can’t they list everything from non-exclusive vendors like Yen, order stock as their retailers order it, and then just ship it on, at a discount which makes them money? Retailers give up an extra day or two on filling the order, as well as some margin, in exchange for one-stop shopping.

    In other words, set up a Special Order system like the local B&N uses. B&N sometimes orders from Bookazine or Ingram to fulfill special orders. Why can’t Diamond do the same from Hachette or Random House or HarperCollins?

  35. David Bird says:

    Actually, Diamond has a division that deals with bookstores (the non-comics variety) and they do accept returns.

  36. Comics Should Be Good! @ Comic Book Resources » Sunday Brunch: 9/13/09 says:

    [...] Chris Butcher rings the death knell of the direct comics market. Again. Look at the vine! It withers!: What happens when Direct Market [...]

  37. Choice words from 2009 « The Manga Curmudgeon says:

    [...] “I Am Cynical (Orange)” by Chris Butcher: If you’ve just discovered Butcher through his excellent pieces on “10 Manga That Changed Comics” (here’s #8), let me reassure you that he’s been brilliant for ages. Case in point is this piece on the vicissitudes of distribution to the Direct Market. [...]

  38. Sequential | Canadian Comics News & Culture says:

    [...] other news, Toronto comics retailer Chris Butcher gives us all a schooling in the recent history of comic shops and the Direct Market, and clues us [...]

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