Josh-da-man

Stick a fork in Diamond Comics Distributors...

The Valeyard

Good news, everyone! Diamond's reign lasted far longer than it should have.

Red Hood

I don't think Diamond is done yet but all of this depends on the credit terms that PRH gives to LCS. Many stores, specially the older ones, have 90 day terms with Diamond. This gives the stores a cushion to sell the books and be able to pay the money at the end of the terms. On the other hand, Lunar terms vary and we don't know what PRH will do. If they give 60-90 day credit terms to the LCS, then Diamond is done. If they do 30 days or cash in advance or payment upon receipt, then Diamond will still have a business.

My main problems with this move are:

1- Similar to DC and Lunar, Marvel here is shifting a monopoly from one place to another. For this business to thrive, there needs to be competition at the distribution level.
2- LCS will have to order from 3 different places to get all their books. It's a logistical nightmare
3- PRH isn't a benevolent company. They are sharks and most of the publishing business (writers, creators, editors, etc) hate them because they only take care of the big names and makes it really hard for lesser known names or new authors to break through. If some of this translates to their comic book side, we can PRH removing these discounts, the free shipping and other stuff that will only allow the big LCS to survive
4- Speaking of discounts and sales, we still haven't heard what the minimum amount of purchase will be for PRH. Lunar has a minimum of $150 weekly or $500 a month to purchase DC stuff. If PRH decides that their minimum is $2K, a lot of LCS will be fucked.

majorjoe23

The shops in my area have shifted focus to be more general hobby shops. My shop recently expanded, giving more space to Pops and RPGs, including a large gaming room.

Red Hood

The big problem with that is that the return on investment is very marginal on toys and gaming. Add the whole thing that a lot of gamers for some fucking reason become gatekeepers, and it creates another headache. When I had my store, back issues and trades gave us the biggest return on investment, so that was our 2 biggest focus. More or less every successful store has a similar focus when looking at what brings the most money

1- Back issues: Typically, getting 70-90% return on investment. People want to sell and usually you can get books as low a $.05 each.
2- Trades - Getting between 50-65% return on investment. People love reading graphic novels, so stores that find their right mix of trades to keep in stock will be successful
3- New releases - 35-50% return on investment. This is the hardest part. Most traffic at LCS is for the new weekly books. If people purchase their pull list and you know your market and order responsibly, the store can be successful. Fall on the trap of trying to get every variant, order without knowing what your market wants and people not picking up their pull list will decimate an LCS in no time.
4- Toys, statues and games - 10-30% return on investment. This is what screws a lot of stores. Toys and statues through Diamond are expensive as hell. Of course the more you buy of the same, the bigger the discount but the LCS has to make sure you are able to move them at retail price. Games are even worse cause the ROI is even lower and the items are more expensive. I always took advantage of clearance sales that Diamond use to have and that way I could sell statues and get more ROI. Honestly, the best way to sell toys is to either buy directly from the company making them or make sure you have a customer that will pay for them.

majorjoe23

A few years back the shop I go to switched from open topped wooden boxes for back issues to metal office cabinets. It pretty much kills any casual browsing. I almost never see people opening them.

PhantomStranger

Half the fun of a comic book shop is rifling through long boxes of back issues. Sounds like that store didn't make a good business decision.

Red Hood

Yeah, that was a stupid decision on their part. Most back issues aren't worth that hassle.

fujishig

I'd imagine this was to save space, but what did they put in that space instead?

I'd think beyond return on investment, the toys and knicknacks suffer from just taking up way too much space in general, plus unlike actual monthly comics, there are just too many other places to get them (usually for cheaper).

L Everett Scott

This is deja vu all over again. I remember back in the mid-90s when Marvel bought Heroes World (sight unseen, apparently) which signalled the beginning of the end for Capital City.

Up here in Canada, one of the major east coast distributors called Andromeda immediately shuttered their doors the moment Marvel made that move, figuring they couldn't survive losing 40 or whatever percent of their sales were. In hindsight, that was a pretty shrewd move on the owner's part.

Looks like it's now Diamond's turn to be inside the barrel. It's sad that the mom and pop stores that survived all the industry changes over the years might not be able to weather this latest storm.

fujishig

This is exactly what I thought. People are excited about Diamond not being a monopoly but not seeing that this is just splitting up exclusivity just like Heroes World did, and that had disastrous results.

Like I said before, this may be good for the industry as far as getting a wider distribution for publishing collections and such, but I'm not sure it's great for the monthly comic market or comic book shops in particular.

Red Hood

Again, this is not splitting exclusivity. PRH is now the exclusive distributor for Marvel. Diamond is a distributor in some sense for Marvel too, but they are acquiring the books on wholesale from PRH. So basically Diamond is the middleman of the middleman. This move by Marvel is exactly to what DC did of simply moving the monopoly from point A to point B.

Red Hood

It seems that many of the companies left with Diamond have not re-signed agreements for distribution deals and so far have continued doing business together on hand shake agreements. IDW revealed on their latest financial report that their deal with Diamond has lapsed. I've heard through the grapevine that Image, Boom and Dark Horse deal have expired or are about to expired. If this is the case and these companies jump ship, then it's pretty much over for Diamond.

fujishig

I meant splitting exclusivity as in PRH is distributing Marvel (though as you said, Diamond can act as the middleman... but for how long?), Image and such through Diamond, etc. So it's not like you can exactly shop around, if you want comics from a certain company, it's still pretty much exclusively distributed/controlled by one company, which I thought was the major complaint about Diamond. But as you just posted, even that might be up for grabs.

morriscroy

Could Diamond still surivive with their Alliance game distribution side?

More than a decade ago, I remember chatting with some then-local gaming/comic stores owners where they mentioned they really hated Alliance, but had to deal with them for gaming type stuff (such as D&D and other pen-and-paper rpg games).

Red Hood

I don't think they can. The issue with gaming is that the return on investment is really low, specially when compared to comic books. If Diamond loses the comic side of their business, they'll end up reducing the discount on the gaming side, making the profit margin even lower.

Josh-da-man

While everyone is cheering the demise of the Diamond monopoly, isn't the industry just replacing one monopoly with another?

If Diamond falls, then everyone is just left with PRH. And if all of this goes down, DC will probably ditch Lunar and sign up with PRH.

PhantomStranger

I think DC ultimately ends up with PRH.

Red Hood

Exactly. Like I've said from the beginning, this is not competition, just moving the monopoly from point A to point B. The problem is that no one can do anything about it and the LCS are tied to the decisions these mega corporations make. I've already heard horror stories from B&N employees among others about how bad PRH is in regards to delivering things with damages and shortages and how inept they are at responding to these issues in a timely manner. The headaches may have as well moved from point A to point B.

Something else that pop up on my mind yesterday was at how the relationship between LCS and PRH is going to be in general. Is PRH going to do retailer summits? Are they going provide access to conventions? Are they going to supply a POS system like Diamond does? How much is that going to cost. Are they going to have a Free Comic Book Day event? There are many variables here that will affect LCS bottom line.

Red Hood

This officially started last week, but now Scout Comics are being solicited through Lunar.

Red Hood

IDW will be distributing books to the direct market exclusively through Penguin Random House.

Diamond is dying a slow death

RonG617

Lunar should try to grab Image before Penguin gets exclusives with all the big companies.

Josh-da-man

I really hate to see comic distribution become so balkanized.

For a casual reader like myself, it makes it nearly impossible to know what is coming out any given week. Before last year, I could just go to Diamond's website and scan through every single thing shipping that given week. And now everything is going to be split up between Diamond, Lunar, PRH, and god knows what else.

Red Hood

Penguin will most likely land both Image and Dark Horse. They are already distributing both companies' trades and graphic novels. It's just a matter of time until they get the full distribution to the direct market.

My recommendation is that you use Midtown Comics to guide yourself as to what's coming every week. They post pre-orders for next week items on Wednesday afternoon, so it's a good guide to see what's coming. There's also Comiclist.com and the Fresh Comics app to show what's coming.

My problem with the distribution moves is that it doesn't solve the big problem which is the lack of competition. The direct market doesn't want exclusive deals. What we want is that multiple distributors carry the same product. Moving IDW from Diamond to Penguin solves nothing. Prices aren't going to change for the retailers. On the contrary, discounts on books are going to be reduced. Another problem that is coming up with Penguin is that the weekly final order cutoff can only be used to increase orders, not decrease them. This defeats the purpose of advance orders. Why would a store order any issue #2 in advance when they don't know how issue #1 is going to sell?

Another thing that these moves are going to affect is the smaller independent companies. If they stay with Diamond, many won't survive. I highly doubt that Penguin will carry any of these indy books. So Lunar will remain the only option. So far, Scout Comics moved to Lunar, but would American Mythology survive doing the same? Or Zenoscope?

The other concern is that as much as Diamond is criticized, they do make very good statues and toys that are mostly exclusive to LCS. If Diamond goes under, who will carry the torch of producing these items? Right now, DC has licensed their collectibles side to McFarlane, and a huge downside to this is that LCS rarely get these toys as stores like Target, Wal-Mart and Amazon get them first and sells them cheaper. Another downside is the discontinuation of the great Batman Black and White Statues and the other DC Collectible statues, figures and props that they made. McFarlane's DC toys have had a lot of quality, availability and diversity issues. Most of the line is Batman centric, focusing on current polarizing storylines (Dark Nights Metal) and Todd has fumbled the ball by giving exclusives to Target that haven't been delivered to the customers. The other DC line is Spin Masters and that one is completely focused on getting the toys to kids.

PhantomStranger

The collectibles are a real issue. Without statues, I would have never gotten back into comic books. There were entire decades where the only comic book product I'd even consider were statues. Those are vital in my estimation.