Chuck's Pricing Strategies Revealed Part Two Howdy! As I promised you on Wednesday, I am going to provide you with a broad overview today of changes I have observed transpiring in the comics market over the past couple of years (in particular) and the past couple of decades (generally). To begin, let me state that I have completely abandoned using the conventional comics price guides as any sort of barometer. Even though I am officially an "Overstreet Advisor," I only use that book for publishing data and information, not prices. The reasons for this are many, but the basic difficulty that I encounter is that the Overstreet pricing team has absolutely no clue as to print runs, or rapidly shifting demand, on most comics published after 1985. Simply put, Bob created a great formula/structure in 1969 for gradually moving up prices on older comics. That formula continued to be relevant until about 1985, when the sudden explosion of new publishers and titles changed the comics world dramatically. Rather than trying to adapt to this new reality of comics collecting, Bob instructed his team at the time to simply list all post-1985 comics at cover price. As crazy as it may seem, that policy is (mostly) still in effect today. Another problem that I have with the Overstreet is its lack of timeliness. With data being collected in the late summer of one year, and publication during the early summer of the following year, the Overstreet is an excellent history/reference book, but absolutely irrelevant in a world where comics can explode in value overnight. Moving on to my personal analysis of pricing, I use the following criteria as my guides: 1) our inventory on hand 2) estimates of original print runs 3) ordering patterns 4) anecdotal feedback Beginning with #1, I have found that simply looking at changes in our inventory over time is the single best barometer of actual demand for any given comic, book, or magazine. We buy and grade about one million back issue comics each year, ranging from very inexpensive issues, all the way up to individual comics priced at $10,000, or more. Simply put, if there is little demand for a given comics title or issue number at a given price, our wholesale suppliers are much more likely to offer that comic to us as a part of one of our wholesale deals. As a direct result, our on-hand inventory of that issue will gradually rise over the course of a year. That would generally dictate that I should ease our own retail prices downward on that issue. Unless, of course, our online buyers are more astute than our suppliers (which is frequently the case...) in which instance that title would continue to be in short supply on our website, even though we purchased numerous copies. SPAWN #1 and SUPERMAN #75 are classic examples of issues that quite a few of of our wholesale suppliers do not wish to keep in stock, yet we sell them very quickly online. The second major criteria that I utilize when pricing is estimates of print runs, or more specifically, "float." Float is defined as the number of copies of any given comic book that are available in the secondary market on any given day. This concept is very important because print runs themselves do not tell the entire story. This is all about supply and demand. If a comic book published in 1980's had a tiny print run (at least when compared to the average for the time period) it may still be relatively worthless because few collectors are seeking it today. With the reality being that older collectors steadily liquidate their collections, those low demand comics quickly end up in the $1 bins, even if they are actually well written, and well drawn. On the flip side, comics with massive print runs, such as SPAWN, can experience continuing demand decades later that still manages to absorb all the copies being released into the market. When that proves to be the case, prices remain stable. Or, in the case of perennial best-seller, AMAZING SPIDER-MAN, absorption/demand can actually be greater than the massive number of copies being released from older collections. In that instance, prices continually rise. What is most important to most comics fans these days, however, are comics where the print runs were originally quite small, but demand is now huge. Published in 1986, with an initial print run of only 5,000 copies, TEEN-AGE MUTANT NINJA TURTLES #1 was one of the first comics to illustrate this instantaneous explosion in price, skyrocketing to over $200 per copy in just a few weeks. This led to speculative hoarding of many other comics from that time period, most of which had far higher print runs, and thus never met speculator's expectations. It has always been true, however, that a few comics published each year do end up rising substantially in price, so speculation continues right up to today. Fast-forward to 2013, and the reality is that a great many comics now being published have print runs smaller than TMNT #1! With fewer than 5,000 copies in existence on some titles, it is little wonder that when a given comic becomes "hot" today for whatever reason, that the price in the secondary market can increase exponentially overnight. Even comics that would seemingly be top-sellers today oftentimes have print runs under 50,000 copies. While 50,000 may seem like a large number it actually works out to fewer than 1,000 copies per state, especially when International sales are taken into account. By comparison, most comics sold prior to 1970 sold at, or above, one million copies per month. X-MEN (1963) was still consistently selling 500,000 copies per month, as recently as 1992... Any questions about why comics from the past five years are so hard to find, and oftentimes more expensive than comics published 20 years ago? All of the above having been said, my third criteria for updating our pricing revolves around the orders that we receive. With advances in technology proving new opportunities for data-gathering, I now have all of our online orders instantly sent directly to my iPhone. I compulsively analyze these newly received orders darn near 24 hours a day, searching for patterns and anomalies that indicate new demand functions. While driving my friends and family crazy, my looking at our orders every half hour gives me instantaneous feedback as to new developments. This can be incredibly valuable when a comic like SIXTH GUN is suddenly optioned for a TV series, and skyrockets overnight to over $300 per copy. By catching that wave before we were completely sold out all of our copies, we were able to generate over $5,000 in sales from that one comic book, in just under a week. Up-to-date information is really, really important! My final criteria for our back issue pricing is based upon tips and rumors from our contemporaries in the comics world. Comics dealers have always relied upon each other for information, but with instant messaging, e-mail, and phone networks being so tied together these days, it is almost as if we work as one entity. As a case in point, when Marvel decides to suddenly clean out their warehouse by slashing the wholesale pricing on some of their books, it can be critical for us to have that information immediately. Simply put, some larger dealers (including us...) will place very large orders on given titles within minutes of Marvel making their announcement, oftentimes buying out the entire remaining supply of that book title. That is why our having many friends in the comics world alerting us to new publisher offers is also critical to our survival. Ironically, when any publisher liquidates their last copies, that book is then officially out-of-print, which means that the price should rise, not fall, in the secondary market. When we do manage to score especially good deals on close-outs we do typically pass many of those big savings on to our newsletter readers, at least for a little while. But when we know for a fact that a book is no longer available from the publisher, a minimum of a 20% premium above cover price then goes into effect. That does us absolutely no good, however, if we did not initially get the word that the publisher was having a sale, and missed out on buying the last remaining copies... I will now stop writing on chapter two of my pricing analysis, and wait until chapter three to provide you with further insights as to why back issue prices on current comics prices are in such an astounding state of flux. See you on Monday! Happy Collecting! Chuck Rozanski, President - Mile High Comics, Inc. March 22, 2013 Advance Previews of next weeks comics from Archie Comics Current Newsletter