Well, apparently…the aggression won’t stand.

Couple weeks back I wrote a piece about the latest announcement that Barnes & Noble would be the exclusive carrier of a mammoth hardcover collecting the first few dozen issues of Marvel’s Ultimate Spider-Man series, you can find the article HERE. The news hit a message board near you, inspiring passionate debate like these things always do, and amongst this, voiced concerns about what this could mean for the direct market. Feel free to visit the link above for a brief refresher, but the main thrust can easily be summarized using only two words…calm down. The sky is not falling. Barnes & Noble aren’t aiming to put the direct market out of business. Marvel isn’t abandoning comics specialty shops for greener bookstore pastures. It’s just one book, just one promotion, and an incredibly smart one at that.

However, online retailer TalesOfWonder.com called encroachment, and quickly offered a decisive response, proclaiming that “this aggression will not stand.” Available for a limited time, shipping immediately for the low low price of $39.95, ToW is offering the first three oversized Ultimate Spidey hardcovers at a price point that undercuts B & N’s in-store price, and matches their online offer. Considering that ToW is one of the largest direct market retailers of trades, and the first inductee into Marvel’s VIP Retailers Club, we shouldn’t be too surprised at them throwing down the gauntlet, but in the interest of being thorough, please welcome Andy Eaton of TalesOfWonder to the friendly confines. He’s dropped by to chat a bit more about this promotion, the differences between the direct and mass markets, and what the future may hold for both. Enjoy.

Brandon Thomas: What is TalesOfWonder, and what led to your status as the first inductee into the Marvel VIP Retailers Club?

Tales of Wonder: TalesOfWonder.com is an online comic book store – we sell graphic novels, statues, and busts, among other things. To become the first inductee into Marvel’s VIP Club, we were the largest buyers of Marvel backlist in January.

Thomas: What was your first thought after hearing about the B & N hardcover exclusive?

ToW: My first thought was, “That will be one enormous book.” Not very profound, but I didn’t see the book as a significant threat. It’s intended for a more mass market audience. We then saw that it was generating a tremendous amount of discussion in the comics community that we thought warranted a reply. We wanted to show that competition can be a positive force. In this case, we were able to provide what we think is a superior product for the same price – 3 separate volumes printed on glossy paper, in stock and ready for immediate shipping. Barnes and Noble announced a delay for their book on the day we issued our press release, which was amusing.

Thomas: Have you seen a noticeable response to your “challenge” as of yet?

ToW: We’ve received a very positive response. I think $39.95 for a 10 lb. box of oversized Spider-Man hardcovers is a pretty good deal. It’s gratifying that customers who have received their shipments are emailing us to tell us how happy they are with the 3-volume set. Several are coming back to order the Ultimate Spider-Man Volume 4 hardcover, which will be released this week. There’s a perfect example of the direct market being able to offer more value than the mass market – we will be shipping the Ultimate Spider-Man Vol. 4 HC this week, while Barnes & Noble orders will languish until July. We’re also $3 cheaper than their online price, $9 cheaper than their in-store price.

Thomas: As the graphic novel increases its importance to the industry’s overall landscape, how does the direct market remain consistently competitive with chain booksellers?

ToW: We exclusively sell graphic novels, so this trend should impact us as much or more than other direct market sellers. We believe the direct market can compete on selection, knowledge, customer service and timeliness. The direct market typically sells new releases weeks, sometimes months, before the book trade. This distinction needs to be emphasized to customers who may not be aware of this difference. As specialty retailers, we can also provide a higher level of customer service than the chains in terms of product and industry knowledge.

Thomas: Your press release jokingly commented that “this aggression will not stand.” Do you think that even on a limited scale that exclusives like this set a potentially dangerous precedent?

ToW: No. If we were able to obtain a similar exclusive, we’d do it. The key phrase there is “on a limited scale.” If exclusives became the norm, and I don’t think they will, we would see that as more of a threat. In this case, I view the product as a positive. The timing of the release is meant to capitalize on the excitement around Spider-Man 2 and will hopefully generate new comic readers. As a comics specialty retailer, we would not likely be the first stop for a potential new comics reader. We’re hoping to capture these mass market readers when they’re ready for a specialty retailer and the advantages of the direct market, namely a much earlier release schedule and a shopping experience tailored for comics readers.

Thomas: What should companies be doing to better ensure that people frequenting the bookstore market can actually find a comics specialty shop, if so inclined? Would something like a locator ad be enough to point them in your direction?

ToW: That’s a great question. Though marketing an online web site is different from a brick-and-mortar store, I think the concepts are similar. I think a locator ad is a good start, but you can’t just put a hook in the water and expect huge success. You have to understand the value of your store and market those characteristics that make you special. You also need to understand your target audience and find ways to reach them. I think comic shops can have more success with, or are at least better at executing, grass-roots promotions.

Thomas: Has the comics industry become almost TOO reliant on the bookstore market to power its sales?

ToW: No. Not for the major publishers anyway. While the growth in bookstores has been large in the past three years, this growth is from a small base. In 2003, Marvel sold $8.8 million of product to the mass market. In contrast, they sold $52.0 million to the direct market in the same year. Also, the direct market grew in 2003 for Marvel while the mass market declined slightly. So, in the case of Marvel, the company did not rely on the bookstore market for ANY growth in 2003. Since 2000, Marvel’s annual revenue from all other sources (mass market, advertising, subscriptions, etc.) grew $10.9 million.

The point is that the direct market has accounted for more dollar growth than other areas of publishing. The numbers for the other publishers are unknown to us. However, I would expect a similar direct market/mass market mix (with a bit more bias towards the mass market) for companies such as DC, Dark Horse and Image.

Thomas: Do you think there’s this misconception that bookstore sales are propping up the industry?

ToW: I actually hadn’t heard that people believed that bookstore sales are propping up the industry. I’ve heard people discount the importance of the direct market or say that Marvel doesn’t value the direct market. I just don’t think that’s the case, given the numbers we previously discussed ($52 .0 million sold to the direct market by Marvel in 2003 versus $8.8 million sold to the mass market).

Thomas: What’s the biggest threat to the comic industry’s growth right now?

ToW: The biggest risk to industry growth is poor product. We are fortunate to have as much good product being published now as there has been in a long time. Once the industry strays from quality content (as it did in the early 1990s), reader demand suffers.

Thomas: Breaking this down to one question, when we’re talking about the direct market and the bookstore market: is this a symbiotic or parasitic relationship?

ToW: Symbiotic. And to continue with the biology analogy, it’s also evolutionary. Natural selection won’t accommodate complacency – we’ll need to continue adapting to successfully compete.

Thomas: You think our natural adaptation will ever take the form of a chain bookseller that specializes in graphic novels? Will we ever see a ToW franchise?

ToW: We don’t have plans to franchise. Even after becoming one of the largest direct market graphic novel retailers, we still see a lot of room for growth online. We’re never at a loss for ideas. The trick is getting them implemented!

Thomas: ToW also owns the rights to a few of Chaos! Comics’ properties? Are you guys planning to venture into the comic publishing business at some point?

ToW: We own all of the Chaos! properties except Lady Death. The Chaos! properties will be published again, but not directly by us. We are currently exploring licensing opportunities. We didn’t want to rush the characters back to print at the expense of quality. We’re excited about the eventual rebirth of the Chaos! universe.

Thomas: TalesOfWonder is one of the industry’s top retailers. What ultimately separates the successful retailers from the unsuccessful?

ToW: Customer service. We fill our orders in 1-3 business days and double-package our books for secure shipping. Our staff is friendly, knowledgeable, and professional. Our prices are competitive – we provide a 30% discount on all Marvel backlist and on new DC titles – but price alone won’t keep customers coming back. If you take care of your customers, they will take care of you.

Thomas: I’d like to thank Andy Eaton for participating, and encourage anyone interested in the Spidey hardcover promotion to follow this link. Thanks, and back in seven.


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