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?

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…

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

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

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.

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.

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.

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

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.

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.

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

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.

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.

@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.

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.

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.

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.

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.

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.