Monday, August 25, 2008

Sureshot Presents - All about the Retailers' Benjamins

Breaking down the goals of Sureshot, they revolve around 2 things; quality and money and most of the time there is a relationship.

In terms of To show comic retailers that there is money to be made from local books

There are two things in play; getting people to buy it and then making a profit for the comic retailer. The former is a bit abstract, its more involved then the bullshit "build it and they will come" but the latter is easy to get into.

All comic retailers buy from Diamond Comic Distributors. They buy in American dollars and have the comics shipped to Australia(predominantly by air freight).

When i was planning Sureshot Presents (2-3 years ago) the exchange rate was 70centsUS for the Australian dollar and the average price of a comic was $1.95.

The wholesale price ranges from 50-60% of cover price (depending on quantities ordered and the publisher). So lets look at using 50% (very few shops would earn the 60% rate) so $1.95 comic book (pretty much average) was bought for $0.97US. So using the exchange rate of 70cents buys one Aussie dollar that equates to $1.35. Air freight is expensive, and while its hard to get a proper figure at the time i figured out it was about $10 a kilogram. A regular comic weighs about 50grams so to ship it over costs about 50cents (local money).

So to buy the comic and ship it over costs $1.85 Austrlian. Most comic shops sold a $1.95 comic for $3.50 meaning they make $1.65 gross. Of course rent, wages, gst and other costs need to come from this as well. But once a comic arrives on the comic shop floor those costs are equal no matter if the comic is from overseas or locally.

Now the average comic is closer to $3 and the exchange rate is .90 for $1AU but frieght is even dearer now at $20 a kilogram. So they make about $2.70 per comic (roughly).

So at the time each comic sold by a comic retailer made them $1.65. To meet my goal i wanted to make them at least $2 a comic. The norm is that wholesale price is half retail.

So I had a cover price of $4.

I got inspired by one of the production strategies of IKEA - they start at with a price they think their customers will pay for a product and then create a product for that price.

So i had to create a comic for $2 that would meet my other goals.


Anonymous said...

yep, ya gotta make it attractive for the retailer. with killeroo it was about 40-45% of cover price, and I never had any complaints from the shops I sold it to. Like you've said for ages Mark, on consignment is for suckers.

- dc

Anthony Woodward said...

Wow great post, I had never at it like this!

Mark Selan said...

Darren - yeah, you had a the higher cover price so it was pretty enticing for retailers. Though i would think there might be some psychological barrier giving less than 50% discount, ergo less than Diamond.

And a retailer that buys on consignment can't be that business saavy and not worth dealing with.

Anthony - Thanks. When entering a market always check out your competitors.