Wednesday, January 21, 2009
Diamond's Vice President of Purchasing Bill Schanes talked to Newsarama about the changes to the purchase order minimums, confirming the basic math discussed here earlier and my own assumtpions about they whys and wherefores coming from Diamond's side. Every item, or SKU, a distributor carries has an attached maintenance cost on their end, not limited to the physical space of holding the product; with 5,000 new comic books a year (and that's a low estimate), logistical costs begin cutting into economies of scale.
It's notable that Schanes also pointed to variant covers as falling under the benchmark rules: "Our belief is that if there are fewer choices on those types of variant covers, the individual issues actually perform better, and are more profitable for all concerned," he said. As quite a lot of the books in the Top 300 in 2008 fell under this definition and contributed to the 300th-place issue unit count rising, it'll be interesting to see how the future Top 300s are affected.
Of note to the end-of-year analyses, Schanes said that "Diamond’s sales were down last year – within a realm of acceptability, but they were down, and we’re looking at decreases in 2009." This follows Roger Fletcher's earlier statement that sales were down 3%, and Steve Geppi's statement that trade paperback sales were up 5%. I still have to complete my 2008 analysis, but depending on what baskets we're looking at, a number of different things could be true at once. There's Diamond's comic book sales, Diamond's sales of comics and trades, and Diamond's sales including its entire merchandise line, and more — so it'll helps to know specifically the numbers mentioned refer to. (Even the trade paperback number might refer to the direct market, or to that plus the distributor's separately organized bookstore business.)
Related update: Former Cold Cut employee and a fellow numbers-tracker from way back Matthew High passes on word he's heard that for periodicals, the order codes will have a sunset of 60 days after initial release, after which "Diamond locks down the code and does not accept any more reorders. Apparently this will not affect non-periodical items (like graphic novels, trades), but I could see how this could throw a major monkeywrench in the works for how some retailers out there do business. Also not sure if this affects brokered publishers or not." It's unclear whether by comics periodicals this means simply comics-related magazines — or comic books themselves (which are, of course, periodicals). Either way, pending confirmation, this would seem to be consistent with the officially stated goal of removing SKUs from the system, so than not all 5,000+ comics and magazines that ship every year have a spot on the warehouse shelf alongside the trades.
I do know from seeing past reports that Diamond has been shipping onesie-twosie on comic books and magazines that were released a good ways back — so there's no telling how many slots it was keeping open beyond the items in the STAR System reorder catalog. If you've ever visited a distribution center or seen a pictorial, it's always quite a sight seeing what's physically required to stock comics; it's one of the reasons the mortality rate for distributors was already high, even before the exclusivity battles of the mid-1990s.