Marvel Boycott Brewing Against Lenticular Tiers

[drew]

Just a couple comic shop owners who cant do math or you see some steam building on pushback against tiers/variants
https://www.bleedingcool.com/2017/08/23 ... ar-covers/

http://www.comicsbeat.com/big-bang-comi ... ay-follow/

Tweeting out a statement on Monday, Big Bang Comics of Dublin let its fans know that they Marvel Legacy event lenticular variants will not be available to customers at their store, citing the problems of Marvel’s requirements to order.

Instead of having an open order on their lenticular variants, like DC, Marvel is putting them under a “meet or exceed” requirement- in BBC’s words, making local comic stores jump through hoops to be able to order. For Big Bang Comics, this would mean having to order up to 170% more on a regular title than needed in order to be able to order the lenticular variants. Another concern for the retailer is that lenticular covers will sell out, leaving regular covers on the shelves. These concerns are stated as having been repeatedly discussed with – but not addressed by – Marvel.

The writer signs off by noting that they have been in contact with around 70 retailers who share their concerns, and that they are no longer going to be ordering anything with a “meet or exceed” requirement, stating:

“We’re not going to do it anymore, it’s not good for us, it’s not good for you and it’s not good for Comics. We’re over jumping through hoops, and the term “meet or exceed” needs to be put to death in that order form and never seen again.”

Lenticular covers have been a great sales boost in these times, and you would expect that the Legacy lenticulars would do the same for Marvel…but if Big Bang’s stance is a common one, we may see a smaller boost than expected.

…or, as Marvel is betting, its all complaining and the DM will fall in line again.

which will it be? Time will tell.

[bralinator]

I was disappointed that you sounded a LOT like a Marvel apologist for these kinds of shenanigans on episode 394 of Comics For Fun & Profit. At least that's how it sounded. The "meet or exceed" ordering incentive variants are compelling a lot of shops to over-order these kinds of books and the only entity that this formula helps is Marvel's bottom line. Not the stores and not the readers. It's just a way to puff up Marvel's sales figures.

For smaller stores, it might not be as big a burden, but for the larger ones, it's quite a commitment to have to purchase 170% of a book you may have ordered 100 copies of. Who are the extra 70 copies going to be sold to? For an industry that is barely staying afloat as it is because of the direct market, and not being able to return unsold items (unlike EVERY other book, newspapers, magazine in the world), the leading brand shouldn't be playing these kinds of numbers games. Just make good comics

Stores can no longer afford having too many spare copies of titles they over-ordered. Good stores already know what amount they can sell. Ordering too much just to get a variant that will decrease exponentially within 2 years (I'm being generous) is a recipe for going out of business. On the other hand, Marvel and DC would stop these games in a real hurry if they didn’t sell… so I can’t blame them for playing these games as long as people buy them. But, you may want to listen to that Kowcast episode again where they discuss the "meet or exceed" shenanigans. I applaud these stores that want to stop playing Marvel's games.

[drew]

I was disappointed that you sounded a LOT like a Marvel apologist for these kinds of shenanigans on episode 394 of Comics For Fun & Profit. At least that's how it sounded. The "meet or exceed" ordering incentive variants are compelling a lot of shops to over-order these kinds of books and the only entity that this formula helps is Marvel's bottom line. Not the stores and not the readers. It's just a way to puff up Marvel's sales figures.

i will admit the guys at the kowcast episode on variant tiers vs. pricing may have influenced my opinion http://kowabungacomics.com/podcast/2017 ... s-pricing/

[erickowabunga]

For smaller stores, it might not be as big a burden, but for the larger ones, it's quite a commitment to have to purchase 170% of a book you may have ordered 100 copies of. Who are the extra 70 copies going to be sold to?

This is correct. For smaller store, it is a smaller burden. However, here is an example of the math that even larger stores can benefit from. The reason is that many times when you up your order, Marvel will give you "deep" discounts. These discounts add an extra 15% of profit margin, and allow you to get to a higher tiered variant. Like it or not, these variants make the payoff worth it. If you listen to the episode that Drew mentioned, you can hear James verbally walk through the math on it.

The end result is that shops (if you do it correctly, i.e. not every title) that take advantage of these opportunities can actually profit more, and have additional stock to sell through other means. Our shop attends up to 6 shows per quarter (one day, hotel style shows), as well as we sell on eBay and directly to people throughout the world. If we didn't have those channels, we likely wouldn't extend ourselves. So far, for the ones we have gone deep on, we have made big money.

Naturally, with all of this, we keep a keen eye on the speculator market. At the first sign of shaking, we will not be taking advantage of these types of sales. But as long as the Marvel Spec Hunters are out there, we are happy to supply them.

(From a different Retailer)
Doing FOC marvel math for gen thors 1
Ordered 50 of se 5
Currently Selling 20 mighty Thor
Ordering 25 @$4.99 x .45 =$56 cost
Ordering 50 @$4.99 x .45 =$112 cost
Ordering 75 @$4.99 x .30 =$112 cost
(25 free copies)
Ordering 100 @$4.99 x .30 =$150 cost
Sell 30@$4.99 to break even
Free Kirby, Ross and pastoras variants for gravy

[bralinator]

So if I am reading this correctly, you normally sell around 20 issues of Thor, but now you'll have to sell at least 10 extra issues in order to break even, and then you'll have a bunch of extra variants around that you'll need to move on the secondary market- or to speculators - which in this case maybe you can, because fewer stores are ordering lenticular covers, but maybe you can't and it takes you several months or years to get rid of them.

Even if it works out for you and you make an extra hundred bucks or so, I don't think playing these numbers games is going to do anything to change the way Marvel is doing business and maybe you don't want them to. As an older reader, I may have a different perspective than the average retailer. But if you're catering to speculators in an extravagant way (both you and Marvel), then I am concerned we're going to see the same downturn we did in the 90's - if we haven't begun to do so already. Do you have any concerns about that?

Lenticular covers is the new chromium cover.

[erickowabunga]

But if you're catering to speculators in an extravagant way (both you and Marvel), then I am concerned we're going to see the same downturn we did in the 90's - if we haven't begun to do so already. Do you have any concerns about that?

Lenticular covers is the new chromium cover.

Naturally we are always concerned. That is why we only go for what we know we will make money on, and what we know requires little to no major adjustment to our numbers. We are not getting all Lenticulars, in fact we are looking at less than half.

Do we like what Marvel does - no. Do we use it to our advantage - yes. Do we just play the Marvel game across the board - no. If you do the third, you are playing a long term game that will kill you.

[bralinator]

Do we like what Marvel does - no. Do we use it to our advantage - yes. Do we just play the Marvel game across the board - no. If you do the third, you are playing a long term game that will kill you.

Makes sense. I suspect quite a few stores have depended on Marvel and played these games at the risk of being able to profitably operate long term, hence a reported uptick in LCS closings.

[jrphoenix]

I was disappointed that you sounded a LOT like a Marvel apologist for these kinds of shenanigans on episode 394 of Comics For Fun & Profit. At least that's how it sounded. The "meet or exceed" ordering incentive variants are compelling a lot of shops to over-order these kinds of books and the only entity that this formula helps is Marvel's bottom line. Not the stores and not the readers. It's just a way to puff up Marvel's sales figures.

i will admit the guys at the kowcast episode on variant tiers vs. pricing may have influenced my opinion http://kowabungacomics.com/podcast/2017 ... s-pricing/

Loved this episode. I like that the alternative view point was given to us. The only news / rumblings I see or hear are the stores stating they're abstaining from the Lenticulars "boycotting them". I read Brian Hibbs article on why it didn't make sense. Kowabunga has some smart store owners that know how to actually be profitable playing the game. Good job guys!

[bralinator]

Loved this episode. I like that the alternative view point was given to us. The only news / rumblings I see or hear are the stores stating they're abstaining from the Lenticulars "boycotting them". I read Brian Hibbs article on why it didn't make sense. Kowabunga has some smart store owners that know how to actually be profitable playing the game. Good job guys!

Speaking of Brian Hibbs, here's what he said about these lenticular covers.

One of the big confusions of the Direct Market and sales-reporting is that sell-in (sales TO retailers) and sell-through (sales to CONSUMERS) aren’t necessarily the same thing. While, as a general rule, stores that don’t get those two numbers to be very very close tend not to stay in business for very long for obvious reasons, and while you can usually suss out what the results of sell-through was by reading the order charts as a kind of lagging indicator of sales success (that is to say: if an otherwise stable series has a fall in orders on the charts, that’s an indication that the current-on-the-racks issue had a lower sell-through), it’s still largely a black box for most consumers.

So I thought it might be helpful for some people, to get a glimpse inside the box, so you can understand just exactly what retailers have to think about for a promotion like this one.

As we discussed last month, Marvel is only allowing stores to order any copies of the lenticular covers, if they “meet or exceed” an ordering threshold for a different issue. For example, Marvel expects us to order October’s “Invincible Iron Man” #593 at 200% of what we ordered of May’s “Invincible Iron Man” #7. Please recognize that both comics have exactly the same creative team, and feature the same characters, and that October’s issue is a continuation of the same story that the creative team has been telling for a fair amount of time – this is not a substantially different book or direction. The same is true for virtually all of the “Legacy” series.

It is generally understood by most retailers that a fancy version of a comic will sell better than a “regular” edition, and, more importantly, only a very few number of customers are interested in buying both. In other words, each copy of the lenticular cover sold almost certainly means that you’re selling fewer of the “regular” one.

Finally, it is important to understand that Marvel, for what I believe is the first time in its history, is offering the Lenticular covers at a much smaller discount than usual for most retailers. I, for example, usually earn 56% off the cover price for Marvel comics – I pay about $1.76 for a $3.99 cover price comic. Lenticulars are a straight 50% for all accounts, which means that they’ll cost about $2. That extra twenty-four cents means that the lenticulars cost me about fourteen percent more to stock than the regular edition. Stores that are larger than mine normally earn even better discounts, so that Marvel is asking their largest accounts to pay approximately twenty-two percent more for the lenticular covers.

If “Legacy” is a big hit that brings many new and lapsed readers rushing back to Marvel’s doors, then that math might well work out in the long run – Phil Boyle at seven-store Florida chain Coliseum of Comics has a solid case for going “all in” – but I for one am not sure that this will hit big.

I thought I might help you understand the ordering process a little better by showing you our own math. One thing that’s important to understand is that at no point has Diamond or Marvel done a single thing to make it easier to order these comics. While they gave us a list of “Meet or exceed” targets, at no point did they provide us with the tools to quickly and directly identify the details of these targets ourselves. In order for me to understand what they want me to order of this issue of “Iron Man”, I had to manually look up the original numbers and do the math myself. Conceptually, it should be trivial for the publisher and distributor to push this data down the chain, but instead every retail account in America had to do all of the work on their own. Mine took me nearly ninety minutes to build – ninety minutes that I’ll never get back and took me away of doing actually productive things for my stores… because unfortunately for me my maths told me that buying in like this didn’t make any sense for our stores.

Here’s the chart, for both stores combined, because we’re obligated to order on a company-wide level. Let us discuss it below…


Not all of these columns will necessarily make a ton of sense to a lay person, so let’s walk through them one-by-one. It starts off pretty straight forward with the “Legacy” title, and the “Comparable” book that Marvel identified as the target (the list is not in alphabetical order – it is in order-these-comics-appear-on-order-form, because that’s the practical way in which it will be used by us) In other words, “Amazing Spider-Man” #789 is the “Legacy” book, while #27 of the same series is the comparable.

The next three columns are what the original order of the comparable title was, the percentage of that order Marvel wants me to “meet or exceed” and what that number would therefore become. In other words, ASM #27 was initially ordered at 48 copies. Marvel wants me to order 125% of that, for a total of 60 copies minimum.

The next columns, in orange, are what I sold of the comparable, and what the overall sell-through percentage was, relative to our initial order. In ASM’s case I sold 48 copies, so I’m at 100% of my initial order. This does not mean that I am sold out of ASM! We reorder comics that we sell-through, and our total number of copies received of ASM was actually 50 because of reorders, but we sold all of our “initial” orders. In point of fact, of all of the comparables on the chart, the only one that we had a complete sell-out of was “X-Men Gold” #6… and that’s only because Marvel doesn’t have more copies to sell us.

The important consideration on this column is that even though Marvel sets a target based on sell-in, sell-through doesn’t necessarily have much relationship. For example, “Deadpool” sales have been crashing – we sold just fifty-five percent of what we ordered of #34 – but Marvel wants me to order 175% of that number for “Despicable Deadpool” #287. Or what translates as 318% of what I sold of that issue.

We also had to really carefully assess our numbers – I started off by pulling what we received of each of these books, but halfway through the process, I realized that wasn’t quite correct. We had titles like “Cable” and “Defenders” (with the asterisks) where Marvel overshipped copies. It is very easy to overlook those kinds of data points in this kind of data pile.

Finally, the last column is what we placed as our initial orders for the “Legacy” titles, based upon what our sales are (and not wishful thinking), and what our projection of sales will be for the regular covers – comparing this to the “need to order” column you can see that, without stretching, we do not meet the targets to be allowed to order the lenticular covers for the vast majority of titles.

At the end of the exercise, things look like this:

Number of copies I ordered of comparables: 874

Number of copies Marvel wants me to order of the “Legacy” books: 1221

Number of copies I actually sold of the comparables: 754

Number of copies I ordered of the “Legacy” books: 823

I’m ordering 9% more copies of the new “Legacy” books than I sold of the comparable, despite the fact that the comics are essentially the same books with the same creative teams. Perhaps I am wrong, but that seems like a pretty decent show of faith on initial orders, given the nature of “Standard Attrition” (and the, let’s face it, consumer confusion that the renumbering is invariably going to cause)

It’s nowhere near enough, however, to “unlock” the ordering for the lenticulars. In order to do that, Marvel expects me to order four hundred and three more copies of the “regular” covers, or very nearly fifty percent more comics than my data says I should expect to sell (with some to grow on)

And this is where the math goes all sideways: because if we ordered the lenticulars, some percentage of that number would deduct from what we can expect to sell of the “regular” covers. This is not a provable number that I can write in a spread sheet, but I suspect that the path we’d probably take is: fill the preorder copies from “regular” copies, and rack zero-to-no copies of the “regular” covers on the assumption that enough customers would “throw them back” in favor of the lenticulars in order to cover rack-sales-of-“regular”-covers-to-non-subscribers. (That formula worked relatively OK for line-wide lenticular stunts like DC’s villain month) That would take me down to about 605 copies ordered instead of the 1221 Marvel expects me to order to unlock. Yikes.

In terms of the lenticulars, demand for those will be, by and large, unattached to the actual demand for the “parent” book (Again, this is the behavior we saw for DC’s line-wide lenticulars) – I think that we could fairly uniformly sell at least 25 copies of each lenticular cover because enough customers are going to want a “set” of them. If we did that, we’d be bringing in at least 725 copies of the lenticulars. But, wait, the lenticulars have a lower discount.

Functionally, however, I don’t think it makes any sense to “partially” order the lenticular covers – either you go “all in”, or you should skip it all out. I “Qualify” for three lenticular covers of the 29 – but only stocking 10% of them would almost certainly infuriate customers more than not carrying any.

Read the whole thing here: http://www.comicsbeat.com/tilting-at-wi ... my-stores/

Does Kowabunga's compsolut disagree with Hibbs' take on the lenticular promotion? Why or why not?

[erickowabunga]

Does Kowabunga's compsolut disagree with Hibbs' take on the lenticular promotion? Why or why not?

We stay very aware of Brian's articles, and much of his writing formed how we determined to run our business. There are a few differences between Comix Experience, and Kowabunga Comics.

First and foremost, Brian has repeatedly said that he is a trade-based retailer, and prefers to shy away from single issues. He orders as close to sell-through on everything across the board, and doesn't reach for independent books that might "catch fire." We sell more new single issues than we do new trades, so we would be better focusing our funds to what single issues are going to sell. We also order tight to subs lists, and don't like to put a lot of stock onto the shelves after two weeks - but we know our market. Additionally, we hit a local circuit of shows here (up to 4 per month in some cases), and we know that our local competitors don't bring new books to shows - so we have an additional venue to sell them at.

That all said, Brian is also ordering in higher quantities than us in many cases so his increases require more than ours do. This is naturally due to him having a population of over 850k to draw from, versus our local 15k. We also know the brick and mortar stores in our sales territory, and know which ones are getting lenticular and which aren't. That gives us a big leg up to know that if people are going to be looking for them, where they will be headed.

Again, we aren't getting each lenticular, we are getting targeted ones that we know we will be able to sell.

[bralinator]

Thanks for being so responsive and detailed. Helps to better understand the retail side of things.