The New Marvel Comics/Diamond Deal – The End Of Big Store Discounts?
We wondered what the new Diamond/Penguin Random House/Marvel Comics deal would be, to entice comic book stores to stick with Diamond Comic Distributors for their Marvel titles rather than switch to PRH. We expected a deal where Penguin would have a worse discount for bigger retailers but free shipping. And Diamond would have a better discount for bigger retailers with shipping charges. And each store would have to work out where they sat before making that decision.
But we were wrong. Bleeding Cool has been told that Diamond's new terms will be the same 50% discount that PRH offers, or less, combined with reduced shipping charges for all titles. Given that most comic book stores get over 50% discount on Marvel Comics currently, and are already paying Diamond shipping for other titles, this is not going over well with those who were thinking of sticking with Diamond for Marvel.
Shipping is now 2.5% of retail for print products, 5% of retail for non-print products and 5% of invoice value for net-priced items. This will be a reduced cost for most based on the 5-10% they end up paying now, and also a cost that retailers can now calculate themselves in advance. Diamond is also warning that some stores may now not receive the same product on the same day — though it will be ahead of on-sale date. It is noted that Lunar deliveries arrive from a week before sale, to the day before.
So the question is, why stick with Marvel when you get no better — or worse — discount than direct with Penguin, and have to pay 2.5% extra for shipping on top? The only rationale might be that it would be easier for comic stores to deal with Diamond and Lunar rather than Diamond, PRH and Lunar. Less paperwork, less bureaucracy, fewer shipments.
And it is also notable that Penguin Random House, as well as free shipping, offers NET 60 payment – the retailer only has to pay for what they receive, two months after receiving it. That's a gamechanger for many comic stores' cash flow situations. Oh, and sales reps for every store as well.
There's also no news on how this is going to affect the British market which makes up 10-15% of the direct market. How is PRH going to distribute internationally? DC Comics had to backtrack with Lunar, and allow Diamond UK to retake the UK distribution market. PRH has a much wider international footprint but will they really be able to operate internationally as efficiently as Diamond UK.
But for bigger shops, some of whom have been enjoying larger discounts due to their size, and have been able to pass some of those savings on, there is something else looming, which will benefit the smaller shop that doesn't get those high discounts. Whether they order through Diamond or PRH, the likes of DCBS and Midtown, MyComicShop and Graham Crackers, Newbury Comics and Unknown Comics, or Things From Another World and Coliseum Of Comics, are going to have to drop any massive discounts they pass on to customers. While smaller shops may suddenly be in a better position to compete with the big boys — regular customers of the big boys may have decisions to make as to where they buy their comics, if they do at all.
Yet again, it is everything to play for.