I have had a bunch of people contact me during my series on opening a comic book store. Some of them asked similar questions, so I thought I would share the answers with everyone, so that if you also had these questions but didn’t ask them, you will now have the answers. Or, if you didn’t have these questions, you still know more about opening a comic book store than you did before. If this is your first time visiting my column at Sequart, I hope that if you have an interest in opening your own retail comic book store you will go back and read the previous installments of Comic Book Retailing.
One common question I received is about start-up costs. Several people asked me if a certain dollar amount was enough, and what might be too much. First, there is no such thing as having too much start-up capital when opening a business. Even if you do not spend it, it is always good to have it. As far as the money needed to start a comic book store, that can very. Many industry professionals recommend $80,000 as a good figure to start with. Of course that depends upon the cost of living in an area. If you were opening a comic book store on Rodeo Drive you would probably need two to three times that for a small store. We started Neptune Comics with less than that, but we bought all used fixtures, had a very small starting inventory, and didn’t pay ourselves for a while. Eventually our store filled up, and we added and replaced those old fixtures over time – our store looks very different from what it did when we opened almost 3 years ago. Finally we’re at a point where we’re happy with the inventory levels and overall look of the store. If we had had a larger amount of starting capital we could have gotten here much sooner. So, it is true that one could open a store with less than $80,000, but the closer you can get to this base amount, the better off you will be.
Another question I have received quite a bit dealt with numbers and figures – as in where to find them. When working on business plans and loan requests and such, people often want historical data on sales, demographics, and market forecasts. The problem is that direct market is still so small. (Comic book stores and similar stores that carry comics are considered the direct market here in the United States.) At this time, there are no nation-wide comic book chains. While there are a few comic book power-house retailers who do own a number of stores, those are fairly uncommon. In addition, because there isn’t a comic book chain or franchise, they are all privately owned, so they do not have to report their income and sales numbers to anyone but their ownership and the government. Because of these reasons, and the reluctance of many comic book store owners to share their numbers with the general public, there is not one place where people can go to find data that is representative of the direct market as a whole. Your best sources of information will come from industry professionals. Mel Thompson is an excellent source for numbers on the direct market. (See previous columns for more details on Mel and how to contact him.) Another good place to look is the Comics and Games Retailer magazine. They collect data from the U.S. distributor, Diamond, as well as feedback from individual direct market stores, and compile it into nice charts and graphs. Otherwise your best bet is to try to contact retailers directly and ask them if they would be willing to share their numbers with you. Most probably won’t, so don’t be surprised by that. But there are some that will, provided that they know and understand that you are using these numbers for a business plan and will not share the information with other comic book retailers or the general public.
There were also a few people who had an interest in on-line retailing and would ask me about that. I have to admit that while we do sell some items on-line, we are not an on-line retailer. In addition, the business structure of an on-line retailer is quite different from a brick-and mortar retailer. In a brick-and-mortar store one of the largest costs is the building itself, be it rent or a mortgage, as well as the costs to light it and heat and cool it. There is also the cost of fixtures and the cost of maintaining a clean and inviting appearance. Brick-and-mortar stores also have to invest in merchandise for the shelves, while an on-line store purchases inventory largely based on existing orders. While there are comic book brick-and-mortar stores that offer discounts to regular customers, there are many that do not. It seems that in order to compete in the on-line world, the digital store has to offer a discount. Another huge difference is that the market for a brick-and-mortar store is fairly small. Most comic book shoppers will only drive ten or fifteen miles to get to a comic book store. But an on-line retailer can get customers from anywhere in the world, so their potential customer base is much, much larger. One could own a comic book brick-and-mortar as well as an on-line store, and there are some that do just that. However, they are very different businesses and have to be looked at differently. If you have questions on opening an on-line comic book store, you should look at the web sites of other on-line retailers, as well as contacting them with questions. Some brick-and-mortar store owners are actually hostile to on-line only retailers, largely due to the discount mentality they foster, so you might want to be careful about contacting brick-and-mortar owners and asking them for their advice on your prospective on-line store.
Speaking of discounts, there were several people who wanted to know the discount structure direct market stores receive when buying comics. As you probably already know, Diamond Comics Distribution is just about the only source for comic books in the United States. They have exclusive contracts with the largest publishers, and many smaller distributors that dealt with the remaining publishers have gone out of business over the years. Diamond and its publishing partners set discounts for stores based on a moving average of purchases. To order from Diamond you must maintain a monthly order of $425. From there your discounts very depending upon the publisher and your purchasing average. For example, Marvel’s discount is based on a 12-month rolling average and can be as low as 35% or as high as 59%. Most other publishers have a maximum that is less than that. Discounts can even change depending upon the item. In order to know what you will receive off of an item, you need a Diamond account, an understanding of your current purchase level, and the discount chart. You can contact the folks at Diamond for more information on their discounts.
Another really good question I was asked a few times dealt with the demographics of the direct market. Even here, there are no official numbers. Many say males between thirteen and thirty years old. Others say males between eighteen and forty years old. One thing holds true, men are still the direct market’s primary customers. That is changing, and will probably continue to change, but the “old-boy” network is still quite strong in this industry. If a store carries manga, that will change the demographic a bit because teen girls tend to be the main demographic for that market. If a store carries a large number of graphic novels it might find itself having a larger number of female customers than those that carry only single-issue comics. The average comic book reader continues to get older since the disappearance of comic book spinner racks in convenience and grocery stores and the increase in video game popularity. Comics definitely are not just for kids! However there are a lot of kid-friendly comics out there that a store should carry if they want to include younger readers into the demographic they look for. When someone asks me what my store’s demographics are, I say, “anyone.” We have women and girls that shop here, young boys and men in retirement, minimum wage employees and corporate executives and lawyers. So, while the typical demographic for the direct market is males from their teens on up, that does not mean they are the only ones who buy comics or the only ones a store owner should consider when marketing and merchandising. In fact, because teens and women spend a lot of money, a variety of industries including the direct market, are trying to get more of them interested in their products.
If you have questions about opening a comic book store, feel free to ask. You can leave a question here, or send me an email: firstname.lastname@example.org. My store is fairly new, and fairly small, but we do work hard at having a nice store, and feel that we are successful at what we’re trying to do. I believe that we need more good comic book stores, and if you have a question or need an opinion, I will gladly do what I can to help foster more good comic book stores.