Current State of the Comics World

A couple of years ago, I wrote a column where I tried to give everyone a peek behind the curtain into the world of big time comics dealing. Just yesterday afternoon I returned, totally exhausted, from a comics buying trip up and down the East Coast. During those nine days that I was traveling by myself, I had many hours to contemplate the current state of the comics world, and I thought you might be interested in some of the conclusions I ultimately drew from my observations.

To start off, I need to mention eBay. That particular website has been the invisible driving force behind the back issue comics world for the past several years. Almost from the beginning, eBay auctions have greatly stimulated back issue comics sales. eBay converted what was a fragmented and astoundingly inefficient system of local and regional markets for back issue comics, into a highly sophisticated national marketplace. While the comic book price guides do still have a great influence on overall comics prices, eBay has become the most up-to-date reference point for current bid/ask prices. Having a real time price reporting mechanism has greatly altered which comics are in demand at any given point, and at what prices. Of much more relative importance to my perspective, however, is the fact that eBay has restored much of the confidence in the underlying values of back issue comics that were lost during the dreadful years of 1988-1995, when gross overprinting of instant "collectibles" left huge numbers of comics investors and speculators holding mass quantities of comics that ultimately proved to be worthless.

The difference in today's marketplace is that collectors can now purchase back issue comics with a much higher sense of confidence that the prices that they are paying are not simply being inflated by false representations. The past five years have seen some really radical shifts in pricing, with some back issue comics losing almost all of their value, while others have greatly increased in price. Having a genuine supply/demand mechanism that defines the pricing changes has been extraordinarily beneficial to everyone involved in the comics market.

All that having been said, I'm reasonably certain that many of you would assume that competition from eBay (and other online marketplaces) would be negatively impacting Mile High Comic's overall sales. Surprisingly, we've found that to not actually be the case. We have had a few instances where our sales have declined over the past couple of years, but when we've traced back the root causes of those declines, we've found that they are much more frequently caused by internal considerations (such as running out of certain types of books...), than by external factors. The additional value that we provide to collectors who shop with us in terms of massive overall selection, ease of ordering, guaranteed quality, and reliability of shipment seems to still override the pricing premiums we sometimes have to charge to cover our substantial operating costs. The reality right now as I see it, is that the back issue comics market is more robust today than at any point in at least twenty years. If you have the books in stock that fans want, you can be absolutely overwhelmed with orders. Frankly, however, generating orders is the easy part. The really hard part is being able to stock back issues at prices that are low enough to leave you enough in operating margins to cover your fulfillment costs.

To explain my previous statement, the marketplace for online comics is now not much different than the market for any other consumer goods. As the market has been maturing of the past few years, and has eBay has provided a relatively simple and inexpensive mechanism for new entrants to join, profit margins have been drastically eroding. The underlying price for most inexpensive comics on eBay is now at $1 per book, and dropping rapidly. This incredibly low base price is being fueled by thousands of new eBay sellers who are operating out of their spare bedrooms and garages. While they are blessed with almost no operating costs, the fact that they have no feedback or established customers means that the only way that these "newbies" can make sales is to offer all of their comics for a slight percentage lower than anyone else listing a particular back issue. The problem with that strategy, however, is that it leads to a downward price spiral that (almost literally) has no end. When a marketplace is dominated by sellers with no operating costs, who frequently value their own time not at all, many prices ultimately end up at nearly nil. Adam's Smith's "invisible hand" working to the Nth degree...

I provided you with the above information so you would have a better conceptual framework for what I was seeing at the comics shows I attended over the past two weeks. At the first show, in Laurel, MD, attendance was not huge, but it was nearly double normal. The dozen dealers who exhibited at that show were all relatively pleased, but the one who moved the most units was a dealer who was selling out all of his inexpensive comics at 8/$1. You would think that this one dealer (who is planning to stop attending shows in order to only sell on eBay...), would have killed the sales for the other dealers, but I don't think that was the case. While fans were thrilled to be able to buy big stacks of comics for next to nothing, they also had specific issues they needed. I saw a brisk trade transpiring at the other booths as fans picked up issues that the liquidating dealer did not have in stock. All-in-all, the back issue market in Laurel seemed quite healthy. In many regards, I attribute this additional demand to fans who had their interest in back issues revitalized by eBay. They like buying online, but when there is a show that's convenient to their neighborhood they also like buying in person. The admission fee in Laurel was next to nothing, the hotel was right next to two very efficient highways, and there was tons of free parking. That's a combination that just can't be beat!

The second show that I attended was the one-day Big Apple convention, in New York City. The New York show did not meet most dealer's expectations, as the attendance was lower than expected, and people seemed less inclined to spend money. Part of the reason for those lesser sales may well be the upcoming New York Comic-Con, as many of the bigger spenders may be waiting until the end of February to shop. It was also raining the day of the convention, which certainly may have reduced attendance. What I think was the biggest cause of the lower attendance, however, was the relative hassle of traveling into midtown Manhattan, as opposed to buying comics online. Putting myself in the position of a typical comics fan, I don't think that I would brave the traffic and costs of going into the city if I had a viable alternative for purchasing the same books, at the same (or lower) prices online. it used to be that the best deals and the broadest selections of back issue comics were to be found at major comics shows. I think that we've now crossed the magic line where that is no longer the case. That change in balance may well explain why I ran into yet another dealer in New York who informed me that she was permanently abandoning convention sales, in favor of only selling via eBay. Is it any wonder that I think that the days of big comics conventions may be numbered? It's not that the shows won't go onward (especially if they make the transition into media shows), but rather that they may lose a large number of their back issue dealers. Once the shows lose their critical mass of comics dealers, it may become even harder to convince comics fans to pay steep travel costs and attendance fees. I have no idea where this may all ultimately lead us, but it certainly is food for thought...

My final comment about my trip would be to mention that I purchased an incredible number of great back issue comics during my travels. I frequently had to pay a bit more than I wanted for the issues that I needed, and the sales prices that we're currently obtaining on our website are considerably lower than what I was able to derive a few years ago, but we've made up the difference in margin by becoming much more efficient internally over the past year. By carefully pruning our operating costs in the face of increasing competition we've managed to create an unprecedented positive environment for comics fans. A typical fan can now purchase more comics, for less cost, than at any time that I can remember since the mid-1980's. That may very well explain why the overall market for back issues is on fire right now. In all honesty, even though I just returned from a long road trip, I'm already eager to go out again. Watching all these positive changes transpire in a market that was nearly dead in 1995 is an absolute joy! I may be dreadfully tired right now, but I'm also feeling really, really great about the future of the comics world.

Please send your e-mails to chuck@milehighcomics.com, and your letters to:

Mile High Comics, Inc.
Attn: Chuck Rozanski
2151 W. 56th Ave.
Denver, CO 80221



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