In last week's installment of this column, I went into detail about the current
disfunctionality in the back issue comics market. Specifically, I made reference to
the reality that most comics dealers now only have the ability to market certain very
popular back issues, leading them to dump their remaining inventory on the market at
prices ranging from 25 cents to one dollar each. Ironically, at exactly the same time,
demand for recent back issues of all kinds is very strong, primarily because print runs
have become so low. This has led to the evolution of online comics marketing companies
that purchase bulk back issues from those dealers who have no cost-effective access to
consumers, with those online retailers remarketing those same books to consumers at
significant premiums over cover price.
In writing columns of this nature, I sometimes feel like the Great Oz, voluntarily pulling
back the curtain to reveal both the secrets, and the weaknesses, of our business. In fact,
the staff member who vettes my columns for me before I submit them to CBG has expressed
concerns that I sometimes am too forthcoming in the information that I pass on to you. I
understand his concerns, but at the same time, I want this column to serve a useful purpose.
In this instance, I am trying to provide a generalized explanation of the economic realities
of the current market for back issue comics. Those realities can sometimes be hard to swallow,
however, and as a consequence, I can leave myself at risk for severe personal criticism for
simply stating the facts. I think it is important, however, that everyone understand the
dynamics that drive the current back issue comics marketplace.
An e-mail I that received this week is an example of what can go wrong with being forthcoming.
Specifically, my disenchanted correspondent objected vociferously to the fact that our margins
are quite high on some of the back issues we sell, going so far as to call the dramatic
differences between our buying and selling prices "unethical." Well, that is certainly one
perspective. A perspective I believe is based at least in some measure, however, in a simple
lack of understanding of the costs required to create and operate a database marketing system
for back issue comics. I know I contribute in some measure to this misunderstanding by not
taking the time to explain fully the realities of our business, so I'm going to go into a bit
more detail in this week's column.
Years ago, I decided that I would adopt the business model of McGuckin's Hardware, the leading
hardware store of Boulder, Colorado. McGuckin's is a locally-owned company that is considered
one of the treasures of Boulder retailing. When you enter their incredibly huge building, you
find yourself in a world that the Big Box retailers can only dream that they could create.
Simply put, McGuckin's has everything from huge gas patio grills, to the tinniest screws, to
drafting supplies in quantities to rival the best specialty store. No where in America have I
ever seen anything to rival McGuckin's inventory selection. Taking their excellence even further,
McGuckin's has (literally) more than 100 staff members on the floor at any given time to help you
find whatever you might possibly need. You cannot walk through the place without having been
asked (by genuinely friendly people) at least half a dozen times if you would like some help.
Going to McGuckin's is easy, rewarding, and fun!
On the flip side of the equation, however, the costs of all those wonderful amenities have to
be somehow covered. The answer for McGuckin's lies in their pricing. If you are looking for a
bargain, McGuckin's does have some very good deals as a result of their affiliation with the
True Value Hardware chain, but on items not offered through True Value, they charge a steep
premium over what you would pay elsewhere. Despite that premium pricing, however, the consumers
of Boulder remain very loyal to McGuckin's. While almost everyone shops the discount stores on
occasion, there is a very widespread realization that the exemplary service and selection
provided by McGuckin's is a unique community benefit that needs to be preserved. That's why,
on any given day, McGuckin's is inevitably crowded with throngs of consumers. Those folks know
that they're paying more at McGuckin's than they could get the same items for elsewhere, but
they're willing to pay a premium for the benefits of service, selection, and convenience.
That, in a nutshell, is our business model at Mile High Comics. We do have some great bargains
on back issues where we manage to locate bulk quantities. In fact, you can probably find well
over 20,000 different back issues priced at under $2 on our website on any given day. On items
where we are in short supply, however, our prices are frequently significantly over what you
would pay elsewhere for the same issues. The reason for this lies in the fact that, unlike any
other dealer in the world of comics, we try to stock everything. In fact, we have one full-time
staff position dedicated almost exclusively to adding new entries into our database every day.
As a result, you will find a far broader selection of comics on the Mile High Comics website
than anywhere else in the world.
While having a great selection is a wonderful benefit, the reality is that we do it because it
is my passion, not because it makes any particular economic sense. As much as I wish it were
otherwise, a great many of the more obscure back issue comics we stock do not sell even a single
copy over the course of a year. I insist we keep accumulating them, however, both because I
really want to have them available if the day ever arrives when someone might finally be seeking
them, and because I suffer from this strange notion that all comics ever published deserve respect.
One of my favorite personal moments is when I hear from a fan at a convention about how I've
blown their mind by having some incredibly strange Independent they've been seeking for years
available in our database. It may not pay, but it sure makes me feel good...
As regards the dollars and cents, it is not unusual for us to buy a comic book on the wholesale
market for a dime, and then turn around and sell it for three dollars. Is that, as my
correspondent of earlier this week claimed "vicious price-gouging"? I don't think so. While
the actual cost to us of the comic book in question may be miniscule, the real costs are in the
labor to grade, bag, enter into our computer inventory, pull that book for an order, and ship
that book (about 60 cents per book), and in the long-term storage costs. Then you have to add
in the capital costs of constructing and maintaining our database, and the costs of our
excellent customer service. While this may come as a shock to you, the net earnings of operating
a business like www.milehighcomics.com can end up being pocket change. To be more specific, last
year was the best year in our history. Excluding an extraordinary gain from a contract settlement,
we earned a whopping 2.5 cents on the dollars of our gross sales. The remaining 97.5 cents went
out in inventory, labor, promotion, rents, and operating costs. After giving the government our
income taxes, we netted less than two cents on the dollar in 2002. Our gross margins may appear
to be high when we sell back issues, but quite frankly, those margins are also the only factor
that allow us to stay in business.
As I promised last week, I'm including a listing of specific newer books with this column where
we gladly would pay full Overstreet prices, because we're seeing strong demand at prices far
above the 2003 Guide prices. I go into more detail on price/selection/sales velocity in next
|TITLE ISSUE||OVERSTREET||MILE HIGH COMICS|
|1) ULTIMATE SPIDER-MAN #1||$80.00||$250.00|
|2) WOLVERINE: THE ORIGIN #1||$40.00||$150.00|
|3) 30 DAYS OF NIGHT #1||$25.00||$200.00|
|4) WOLVERINE (1988) #10||$25.00||$75.00|
|5) ULTIMATE X-MEN #1||$20.00||$100.00|
|6) LADY DEATH (1994) #1||$18.00||$70.00|
|7) DAREDEVIL (1998) #1||$12.00||$75.00|
|8) NIGHTWING (1996) #1||$12.00||$50.00|
|9) Y: THE LAST MAN #1||$10.00||$50.00|
|10) WOLVERINE (1998) #100 HOLO||$9.00||$40.00|
|11) BATMAN: HARLEY QUINN (1999) #1||$9.00||$40.00|
|12) BIRDS OF PREY #8||$8.00||$100.00|
|13) UNCANNY X-MEN (1963) #350||$8.00||$30.00|
|14) FABLES (2002) #1||$8.00||$35.00|
|15) FRAY (2001) #1||$8.00||$35.00|
|16) SOJOURN (2001) #1||$6.00||$50.00|
|17) AMAZING SPIDER-MAN (1999) #36||$5.00||$30.00|
|18) WOLVERINE (1998) #145||$4.00||$30.00|
|19) X-MEN: SEARCH FOR CYCLOPS #1||$3.00||$20.00|
|20) AMAZING SPIDER-MAN (1999) #30||$3.00||$35.00|
|21) HULK (1998) #8||$2.50||$30.00|
Mile High Comics, Inc.
Attn: Chuck Rozanski
2151 W. 56th Ave.
Denver, CO 80221