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Printheads: Diamond Raises Minimums

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    • CommentAuthorjohnmuth
    • CommentTimeJan 21st 2009
     (4783.21)
    There's a discussion going on at Panel & Pixel right now, about this, with a lot of input of self-publishing/small press creators and up-and-comers commenting and discussing this, as well. Just for the flip side, to see what the people that aren't just spectators (no offense meant) think of this. And for those of you here that run shops, or maybe do your own publishing/comics, giving more input might help or broaden the discussion.

    ( I know Warren, usually points more comic-related posts towards, P&P, so I thought it an appropriate suggestion. And just as a forewarning, the rules there are you have to use your real name to post there...FYI. :) )
  2.  (4783.22)
    It'll be interesting to see what comes of this. Higher prices? Less Indie publishers? A rising competitor?
  3.  (4783.23)
    Yesterday, I asked my local retailer if he had heard about Diamond's new policy. He said, "Yeah, the new retailer policy?" Oh... Uh... I hadn't heard about that myself.

    In short, (I don't have all of the facts), Diamond raised their order minimum for retailers. Are there any retailers in the room who can fill in the blanks for me? From what I understand, each store has a minimum dollar amount that their order must meet each month, and if they don't... I dunno. Diamond drops them? Help, please.
    • CommentAuthorheresybob
    • CommentTimeJan 22nd 2009
     (4783.24)
    As a guy trying to get his first comic out the door, the more I read about all of this type of crap, the more I think- "I have to bypass diamond completely." Yes, quality of the story is one thing, but the real proof is just getting enough people to even notice the story in the first place.
    •  
      CommentAuthorrickiep00h
    • CommentTimeJan 22nd 2009
     (4783.25)
    ...but the real proof is just getting enough people to even notice the story in the first place.


    This is the part that annoys me about the whole thing. I'm not going to propose I know what's what here, but I would imagine that just being in Previews is what drums up a fair amount of sales for a book. Yes, there's outside marketing, but what better place than where everyone goes to order their comics? You know someone that doesn't scour the internet for new books or rely on their LCS to bring titles to their attention would get a new impression.

    I realize this will probably drive some marketing innovation, especially in internet advertising, but the fact is that this move will (I assume) make it more difficult for people to sell their books... and I thought the whole purpose of Previews was to make it easier. Yes?
  6.  (4783.26)
    @rickie: Seriously, how many people actually sift through Previews every month looking for new books to buy? It’s not especially convenient to sift through all the pages of stuff that’s obviously going to be shipping but appears in previews over-and-over. Previews is the ultimate TL;DR. I think the real problem is that there isn’t a great online replacement.
    •  
      CommentAuthorrickiep00h
    • CommentTimeJan 22nd 2009
     (4783.27)
    Well, I do, so that means some segment must, no?

    I agree that the main problem is that there isn't an online Previews. Significantly lower overhead costs, in printing and labor. I think it's simply an unwillingness from Diamond to adapt.
    •  
      CommentAuthorlordmitz
    • CommentTimeJan 22nd 2009 edited
     (4783.28)
    as someone who orders the comics for their shop, i'll be frank and say i hate getting to the indie part and sifting through it for the good stuff. putting it online will make me even less tolerant for browsing. for every james kolchalka there's 10 leifelds, so i can understand kind of what diamond wishes to do.

    however, this change will be stopping new people getting in, and seems fairly detrimental to the development of new creators. it's a tricky situation.
    • CommentAuthordkostis
    • CommentTimeJan 22nd 2009 edited
     (4783.29)
    I'd like to hear more from shop owners or managers on this. I've been out for almost two years now and worry that any specific comments I make would be out of date. Plus looking back at my previous post, I apparently can't say anything about Diamond without the bitter loathing showing through.
  10.  (4783.30)
    @Mike Wolfer — I'm working on an article about this whole thing. Thanks for your tip on the retailer thing — I'm looking into that. Let you know what I find.
  11.  (4783.31)
    i hate getting to the indie part and sifting through it for the good stuff. putting it online will make me even less tolerant for browsing

    Having it online makes it easier for everybody to link to the good stuff. Or for filters to strip out junk like the porno comic rereleases. Or even just only show the good publishers. I could have a previews account that learned what I like a-la Netflix and recommends new stuff without me even needing to sift through the rest. And it could spit out an order page that I can take straight to my local shop and hand-off to the manager so that they don’t have to try and find the book in the system and screw up my subs.
    •  
      CommentAuthorElana
    • CommentTimeJan 23rd 2009
     (4783.32)
    I do the comics orders for my shop, and I actually enjoy flipping through the indy pages. It's a fun little quiz of my Good Taste detectors.

    All this does is make me wonder what proportion of the actual Good Stuff in the indy pages will have trouble reaching the minimums.

    If everyone doing the orders has a reasonably good sense of taste, might the new minimums be a little... well... Darwinian?

    Because if no one is ordering certain books because they're actually crap...

    Then I'm kind of with Diamond on this one.
  13.  (4783.33)
    For what it's worth, I did a web search for comic book distributors. Excluding Diamond, the only one I could come up with is Haven Distribution (formerly Cold Cut) at www.havendistro.com. I have no idea what kind of numbers these guys do, but it's an alternative for the smaller "Small Press" publishers who may not meet Diamond's minimum order threshold.
  14.  (4783.34)
    Putting my two cents worth in. The more I think about it the more I wonder if this will actually strengthen Haven as a distributor as they tend to cater to smaller press comics. At it's worst, it will cause an influx of companies going to Haven after being dumped by Diamond and may cause Haven to look at it's submission policy. At it's best it would put Haven as the "go to" distributor for anyone with a small readership and strengthen it's place in the market.
    But what do I know?
  15.  (4783.35)
    @Mike Wolfer: I checked with my LCS, and he hasn't heard anything about new order minimums from Diamond for retailers. (He's also a fairly modest-sized store... and he still spends $8,000-$10,000 a month on his Diamond orders, so he's not really worried about an increase.)

    There are a few distributors that do some different things — Last Gasp carries some titles, as well as zines and magazines, and yes, there's Haven. Haven traditionally has been a backlist distributor that's not set up to deal with new monthlies, but I understand they're retooling their business to catch some of the run-off from this — Bluewater Publishing is going to be distributing books like 10th Muse through them. (Bluewater President Darren Davis also estimates it's only going to be two or three months before the indys figure out what they're going to do about all this — I interviewed him last night — and though he's having to alter his publishing line to deal with the new benchmarks, he thinks this is actually a good thing for himself and other indys, because Diamond simply isn't a good match for their needs.)

    Also, Bluewater has known about this whole thing for three months, so they've had some time to deal with the changes — Darren told me he's surprised the news just now broke.
  16.  (4783.36)
    @ Elana: "Because if no one is ordering certain books because they're actually crap..." Part of the problem is that some stores cater to segments of the market that Diamond has never been fond of — books that are definitely not crap, but that aren't as commercial as Diamond would like.

    Yes, this means some companies and comics that are just awful will get canned. But suffering right next to them are books like the stuff published by PictureBox, which are actively trying to be artistic in ways most of the industry doesn't. These people aren't hobbyists, but they're artists more than they are businesspeople.

    The good thing in this case is that Diamond hasn't traditionally been interested in art comics — so a lot of these smaller companies weren't dependent on Diamond to begin with. (That's the case of the three small art comics publishers I talked to in Portland — one of them never went through Diamond, and the other two saw Diamond lose interest in them a while ago, apparently no matter how well their books did.) But then, some of them (like PictureBox) apparently do rely on Diamond.
  17.  (4783.37)
    Dan Nadel of PictureBox has said that some of their higher profile books from last year - like Monster Men Bureiko Lullaby, Travel, and Goddess of War - would not have made the cutoff under Diamond's new requirements.
    • CommentAuthorKosmopolit
    • CommentTimeJan 23rd 2009
     (4783.38)
    Diamond responds via an interview for icv2 with VP Steve Schanes.

    Pulling out the interesting bits:

    "So our brand managers evaluate all the products that come in to us for solicitations to review those products to make sure that they meet our benchmarks. They give some latitude based on say, a brand new publisher we’ve had no experience with, or a brand new creative team that we’ve never had any experience with before, versus a long-running title that shows a decline every issue and sells below the benchmark. "
    ....
    "Our sales were down at Diamond last year, and they look to be down a little more in 2009 based on publishers’ projections, which are given to me in December by the top 15 to 20 publishers. So we’ve determined that with sales going down this year we’re going to need to make some slight adjustments on our side so that we can remain profitable and continue to service the industry at the very highest levels possible. "


    Responding to falling sales by cutting back the range of things you sell doesn't seem to make much sense - unless you're losing money on the stuff you're eliminating.

    ICV2: Does that apply to new product and backlist both?

    Schanes Yes, if it has an order form line, it applies. And there are some exceptions to that guideline, and I’m using the word guideline, not a rule. It’s not hard and fast. Certainly things like Comic Book Legal Defense Fund, Hero Initiative, those we look less at the bottom line because those are more contribution projects, charity projects.


    The change will affect “offered agains” in a pretty big way. What Diamond calls an “offered again” is something that’s already been published and gone through our system once and now either the publisher or Diamond it gets put back in the catalogue a second time. Some people call those relists.


    ICV2: What about items you sell out of but there’s still demand in your system? Does that purchase order also have to hit a $2500 minimum?

    Schanes: No, we routinely issue purchase orders for relatively small quantities or dollar P.O. amounts to supplement the initial shipments after we sell through. That dollar amount is unbelievably low, $25 or $50 P.O. value. It’s very low and at this point in time we’re not making any adjustments there.



    T"ICV2: he last Previews you closed orders for--out of the new product listings or the offered agains, how many products would have been affected by the new threshold?

    Schanes: I didn’t do that particular breakdown. We’ll have a much better sense when Previews #3 comes out the last week of February of what happened between Previews #2 and Previews #3. We think over-all for the very small press publisher that may have been under the $1500 minimum for some time but for which we’ve been flexible, heading into 2009 we won’t be able to afford to offer that level of service any more ..."

    "...the very small press side, people that publish one or two books a year, that have been around for a while, probably 20 to 30 of those publishers will see an immediate impact of not being listed in Previews. The next level up of those small press publishers, that publish more frequently, some of their titles may be affected and some not. And then the middle-sized press will be more about changes in schedule, or packaging, or price point, or format. "

    "We’re going to be more flexible for those publishers that have marketing plans and sales plans, but I’d say that for 85% of the small press that sends us solicitations once they hit that send button to us, or put that stamp on their mail solicitation, that was their entire marketing budget; and it’s hard to support folks that aren’t doing much to support themselves, especially when those sales aren’t profitable in the first place. "


    ICV2: This is a 60-70% increase in the minimum purchase order. Why the size of the increase?

    Schanes: We looked at the last two years of sales data, and we felt that was a reasonable amount of money to have gross profit against. A $2500 purchase order at Diamond’s cost of 60% off is about $6200 retail value. That would give us gross profit at Diamond on a blended average discount to retailers of 44% off retail of about $950, and a contribution to fixed costs, overhead, and profit of $200 or $300 after all the different departments and operations handle it. At $2500, Diamond’s not getting rich.
    •  
      CommentAuthordavebaxter
    • CommentTimeJan 24th 2009
     (4783.39)
    My biggest question about Diamond raising the minimum purchase price though - what exactly ARE Diamond's overhead costs? I've heard that publishers pay printing and shipping costs, plus pay for placement in Previews, so...what exactly is Diamand offsetting by the increase? Does anyone know?

    Oh, and Mike (Mr. Wolfer, dude-man) here's your silver-lining, which I believe in: the writing for this has been on the wall for YEARS. And yet new publishers, no matter how small, have routinely ignored the sinking ship scenario and are jumping on the Titanic AS IT'S SINKING, thinking - "Oh boy! I just made the ship!" This then forces small press publishers to FINALLY get over it and look toward new venues of distribution.

    To be honest, we've all long (since the 90's) been wondering how to break the Diamond monopoly. Well, in a weirdly, possibly inadvertent (possibly not) altruistic act, Diamond has just broke their own monopoly for us. I do believe that this will domino into a market where distribution for anything outside of the most mainstream of mainstream will ACCEPTABLY be offered in other distribution venues, be they digital or simply other small-press-centric distributors like Haven. Before now, readers and retailers always saw Haven and digital books as the "third party" presidential candidate - not really credible in any sincere sense. But this may at long last change that. I think that's a huge silver lining. Diamond hasn't been serving the small press well for a while now, if arguably ever. Small press has always had to fend for themselves and market themselves and make their properties work against the odds. Diamond wasn't what made them succeed, though small press has stuck to it like a glued-to crutch. In that sense, this could be the best thing to happen to the industry since the 80's. --Dave B.
  20.  (4783.40)
    @davebaxter: Here's the part of the ICv2 interview that covers that:
    We looked at the last two years of sales data, and we felt that was a reasonable amount of money to have gross profit against. A $2500 purchase order at Diamond’s cost of 60% off is about $6200 retail value. That would give us gross profit at Diamond on a blended average discount to retailers of 44% off retail of about $950, and a contribution to fixed costs, overhead, and profit of $200 or $300 after all the different departments and operations handle it. At $2500, Diamond’s not getting rich.

    On a typical product, there’s a huge number of departments that are involved. There’s the catalogue department, proofreaders, editors, designers; we have to pay for the catalogue space at the printer; when the order comes in there’s order entry; then the product comes to us and it has to be received at four distribution centers; we have to put it on the pick line for packing; we’ve got to pay for the box to put it in; we have to process the invoice through accounts payable. Often there can be problems with the shipment, such as overages, shortages, or damages. It’s a huge number of departments that are involved, and we’ve got to make sure those people are paid and we can service the market properly. So the product life cycle is very intense, and that’s often misunderstood by the small press, or even by retailers or consumers. At $1500 we were losing money on every purchase order, and that’s just not healthy.

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