The Internet has Totally Changed My Life

Right from the beginning of this week's column, I want to state for the record that the Internet has totally changed my life. In late 1996, Mile High Comics, the company that I founded as a young teen in 1969, was facing a severe cash crunch. Sales at our retail stores were stagnant, while our back issue comics mail order catalog business was slowly eroding away. This was not surprising, considering that the entire comics industry lost over 50% of its total sales volume during those dreadful years between 1993-1997. While we had beaten the industry numbers by quite a bit, and managed to keep our sales levels at over 80% of the boom years of 1992 and 1993, our operating costs had risen steadily. As a result, we were hemorrhaging cash during 1996 at the rate of nearly $1,000 per day. By the end of the year, it was clear that our cash reserves were just about depleted. Without a doubt, if Mile High Comics was going to survive, a radical restructuring of the business was required.

I began by meeting with our commercial bankers, and explaining my plans to them. I promised them that I would begin by cutting costs dramatically. This included eliminating 18 staff positions, one of the most painful experiences of my life. This move was an absolute necessity, however, if I was going to have enough working capital to be able to implement the second part of my plan, which was transforming Mile High Comics into an online retailer. While this sounds like a fairly mundane proposition today, it was quite radical in the winter of 1996. At that time, Amazon.com had only been pioneering online sales for a couple of years, and there were many naysayers who believed that the Internet was just a temporary fad. I had some doubts about the Internet's long-term survival, too, but with only an estimated 45 days of cash left, I simply had no choice. Either I took the risk of becoming an online company, or I faced the certainty of oblivion.

I am being very candid about this time in the history of Mile High Comics because I see some very clear parallels with the current state of the new comics business. As I mentioned in TFTDB #54 (three weeks ago), most new comics publishers are currently seeing unit sales declines in their new issues, and are being forced to continually raise cover prices in order to justify smaller and smaller print runs. These higher cover prices are then aggravating the problem by alienating even more of their fan base, thus leading to even fewer sales. I see this spiral of decline as being very similar to what I faced in 1996.

My answer to this dilemma was transform Mile High Comics into www.milehighcomics.com. That part of the story is pretty obvious for anyone who's seen our ads, or browsed our site. What is not obvious is that in late 1997, after experimenting for a year and constructing part of our website, I completely altered our corporate mission. Up to that time, we considered ourselves to be a retail comic book company with physical stores, a mail order subscription company, and a back issue mail order division. What I asked from my staff at that time was a reorientation of all of our internal perceptions of Mile High Comics. I wanted Mile High Comics to be first and foremost an online company, with our other operations to be considered to be peripheral to that online core.

I don't think that most of my staff really understood the seriousness of what I was proposing, until the spring of 1998. It was at that time that I made the decision to completely eliminate our mail order catalogs. This was an exceptionally radical move at the time, as we were still receiving 60% of our back issue gross revenues from our printed catalogs. The fact remained, however, that every catalog we printed was losing money. So, in spite of many internal doubts, and some very bitter denunciations on the part of some of our longtime mail orders customers who didn't have online access, we began the era of relying completely on online sales. At that same time we also started answering the phones milehighcomics.com. These changes, coupled with endless proselytizing on my part, gradually changed us into an online company.

To be continued...

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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