By Brian Hibbs

As I write this, it’s the deadline to order the October “Legacy” re-positioning from Marvel, with the lenticular covers. Marvel has been explicit that if we don’t order the lenticulars by the initial order deadline of 8/24, then we should expect to get allocated on any orders we might place.

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.

does not mean

The next columns, in orange, are what Iof 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. Thisthat 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, ofof 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 becausedoesn’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.

So, let’s summarize the maths here (and I’m going to use faster-to-calculate “everything is $3.99”, rather than accounting for “Thor” #700 being more expensive):

I think I can sell 823 copies of “Legacy” comics. This costs me (823*$3.99*.44) for a total of $1444.86, with a gross profit potential of $1838.91

However, in order to get lenticulars Marvel wants me to order 1221 comics, with a cost of (1221*$3.99*.44) or $2143.59. I believe, however, that if I can get the lenticulars in the quantity that I want, I would only sell 605 of the “regular” cover, for a gross profit potential of (605*$3.99*.56) just $1351.82. I could then order the 725 lenticular covers, which both cost me because of the reduced discount and have a potential gross profit equally, of (725*$3.99*.50) or $1446.38. That means that combined, I would be spending a wholesale $3589.97 in order to make a gross potential profit of $2798.20.

Sure, we’d make 50% more money by carrying the lenticulars in this scenario, but I’d have to give Marvel 248% more money to do that. That doesn’t make a whole lot of sense.

Bottom lining it all: In order to break-even in brick-and-mortar retail, the rule of thumb is that you have to at least “Keystone” the products you sell – where you spend $1 to make $2. That covers your rent, your labor, your utilities, your miscellaneous expenses. In general, buying Marvel comics, we spend $1 to make $2.26, which gives us a modest profit. To buy in to the lenticulars, Marvel wants me to spend $1 to make $1.77. That can’t be done. Well, it, but it’s not a winning formula to keep the doors open next year.

Here’s the thing: if the lenticulars were open-to-buy, I would be giving Marvel a bit over $2500 (the 605 copies of the regular plus the 725 lenticulars), instead of the bit under $1500 that I’m doing with the 823 regulars alone. All because they’re asking for about a $3600 buy-in in order to play the game at all. Marvel themselves clearly comes out the worst in this calculation (by some 40%), and made it less likely that “Legacy” can change their sales trajectory (which was the entire point of this stunt)

Will every store everywhere make these calculations the same way? Oh, no, I’m sure not – there are certainly stores that have already publicly (well, in private Facebook groups, but still) announced that they’re planning on selling the lenticulars on eBay for double cover price to those customers of mine that we’re not satisfying. And, yep, that could be a profitable bet, potentially.

But it’s a bet, and every bet comes with the chance of a loss, and I’ve lived through at least two occasions since I started in this business of retailers making the wrong bet and nearly collapsing the entire market along with them.

Something feels different to me this time: we’ve had public stories on shops like Lone Star (and mycomicshop.com) or Big Bang Comics flatly saying they’re not participating, and back channel I’m hearing from a lot of stores who say the same – there’s a Facebook poll on a retailer’s group that is running 34 “No” to 33 “Yes” for example, though that’s not scientific or deterministic or anything. But it feels to me that many retailers have had enough of the game playing and hoop jumping.

At the end of the day, there are far too many comics being published – I was actually thrilled and excited that there were “only” 267 items on FOC this last week, because the typical week is pushing closer to 350 these days! – and too many comics means that the only rational response in ordering is to be conservative about stock. “Meet or exceed” gates are wholly against most retailer’s mathematical interests, but literally the only way the system can be changed at Marvel is if retailers-as-a-class stop ordering the damn things at all. You may not see the real results from the October sales charts because I think it’s likely that just enough people will try to buy that magic lottery ticket, but come January next year we’ll know if there was any sustainable bounce from “Legacy” whatsoever.

If Marvel doesn’t have multiple on-the-fourth-issue-since-relaunch titles selling sustainably over 100k, then the whole thing will be an abject failure for the market, in my opinion.

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Brian Hibbs has owned and operated Comix Experience in San Francisco since 1989, was a founding member of the Board of Directors of ComicsPRO, has sat on the Board of the Comic Book Legal Defense Fund, and has been an Eisner Award judge. Feel free to e-mail him with any comments. You can purchase two collections of the first Tilting at Windmills (originally serialized in Comics Retailer magazine) published by IDW Publishing, as well as find an archive of pre-CBR installments right here. Brian is also available to consult for your publishing or retailing program.