Starting a New Blog

I've decided to start a new blog and discontinue this one, for the sole reason that I wanted a new title. Quoted For Truth just wanted comic-specific enough for me. Therefore, please visit my new blog, Retroactive Continuity, which can be found here.

QFT #4 - Part 3: Point of Sale systems: Too Sophisticated for your LCS?

If you care to investigate, and I really don’t, so the following claim is purely conjecture on my part, I’m sure you’ll find POS systems customized for almost every retail sector, meaning there is probably a specialized food service (restaurant) POS system which differs from the system used by a clothing store which differs still from the system found in a consumer electronics store. Further, if you have the money to burn as a business, and most national chains do, you can develop a branded POS system. In other words, the POS system used at Circuit City probably has the easy button all over the GUI, while Best Buy – Best Buy!! (those of you who listen to the Kevin & Bean Show on KROQ 106.7 FM will get the joke) – will have a blue and yellow system.

Following this philosophy, Diamond has developed a POS system customized for the comic book sector. Its goals are to make available a system that is affordable to retailers and to integrate many different functions, in order to make a retailer’s job more efficient.

The first integrated function is downloading pre-written item records for any item you order. The UPC, the description, the price, and the rest of the data would automatically load into the POS system. Other than the quantity and any modifications the retailer wants to make, there would be no need for any manual data entry using Diamond’s software.

The other feature, which is, on the surface at least, promising, is direct communication between the POS software and Diamond’s ordering system. I’m assuming the intent is to have the retailer input his or her order into the POS software which in turn will upload the order to Diamond. I suppose the software might even be smart enough to recommend quantities for specific titles based on the sales history. In addition, perhaps a retailer may also be able to instruct the software to automatically reorder items when a pre-selected quantity is reached.

Now, I admit, those features sound beneficial. The ability to download pre-written item records would certainly save time, and being able to avoid Diamond’s archaic, and downright lame, online ordering interface would make many a retailer cheer. But being the cynical man that I am, I suspect Diamond’s ultimate goal is to strengthen its grip on the direct market’s short hairs by making retailers reliant on the company’s software, thus further solidifying its monopoly.

Plus, I believe Diamond is using a Microsoft product as the platform for its POS system, and like many geeks my age, I have an irrational dislike of Microsoft. Combine that with my rational dislike of Diamond, and this unholy alliance doesn’t give me many warm and fuzzies.

Now we come to the million, or whatever figure Diamond stands to make from this, dollar question. Will retailers buy it? I’m not sure I have a good, quantitative answer other than to say I don’t think the software will be as well received as Diamond is anticipating. There are several reasons behind my prediction.

First, I don’t think Diamond realizes how many comic book retailers would choose, given the chance, to not do business with the distributor at all. There is a great deal of frustration in the direct market due to a variety of factors, many of which I’m sure I’ll eventually discuss in this blog, so I’m really not sure how many retailers will want to jump into yet another bed with Diamond.

In my case, had Diamond’s POS software been available when my store was open, I highly doubt we would have used it. I’m sure we would have evaluated it against the other software packages, but ultimately would have gone in the direction we did.

The second reason the new software won’t be catch on is comic book retailers are notoriously cheap. Therefore, the success of Diamond’s POS software will largely depend on how much it costs. My guess is success will require a sub-$500 price tag, which would include the necessary hardware such as the cash drawer, UPC scanner, credit card reader, and receipt printer, and I’m not sure Diamond can accomplish that. On top of that, I’m assuming the retailer will need a computer running Windows.

For example, I think we spent $1500 on the hardware and software. And to keep the numbers nice and round, I’ll say we spent $500 on a basic computer to run everything. Now, as a start-up store, it was relatively easy to justify spending that money. In fact, we never considered NOT using a POS system. Heck, back when I was only a customer, I could never comprehend why so many stores just used a crappy cash register or a shoebox. It legitimately baffled me.

However, for established stores, I guess I can see the hesitation to spend that money. In many cases, $2000 equals the weekly payment to Diamond. Other than the independently wealthy store owners, I’m sure most retailers would have chest pains cutting that check, especially when most already only survive week to week. So like I said, Diamond really has to think about the price tag.

The final reason I’ll discuss is related to the inherent cheapness. It’s the “change is bad” mentality that permeates the retail side of the industry. Let’s face it, there’s not a whole lot of innovation these days in comic books stores – a topic I’m sure I’ll be discussing in future blogs. We tried some cool ideas in my store, many of which were successful. But for most retailers, if something has been working ok for the last decade, there’s no need to change it. And that most definitely includes the use of POS systems. After all, my seven year old, ticker tape cash register works just fine, dammit! I don’t need one of them fancy pants, new fangled systems. It’s Y2K all over again, I tells ya!!

Yet with all that said, I will reserve further judgment of Diamond’s software until it has had a chance to be implemented. Personally, I feel that POS systems are well worth the up-front investment, if, for no other reason that it actually makes the store look like a professional business. I applaud Diamond for its forward thinking, even though it’s still a few years behind the rest of the world. However, there are just too many long established paradigms and closed minds in the direct market for Point of Sale systems to ever get a foothold.

QFT #4 - Part 2: Point of Sale systems: Too Sophisticated for your LCS?

Once you figure out what you’re doing – and I maintain it’s a continuous learning process – you can make the data entry and the functionality of the POS as complicated or as simple as you would like. However, at a minimum, each item, be it a comic book, a trade, or a toy, requires a unique entry in the system which includes the following data: description (or name), price, initial quantity (if you’re tracking inventory), and UPC (if available).

It took us a few months to get the bugs worked out. Sure, we could have read a few articles online, played around with some tutorials, or even just read the manual, but where would have been the fun in that? The “try stuff and see what happens” method of learning has served me well for 30 years. Hell, that’s how I’ve learned every software tool I’ve used in my engineering career. Why should a POS system be treated any differently? I mean, there’s just something so satisfying about pushing lots of buttons and finally stumbling upon whatever function you’re looking for, or better yet, something totally unexpected. It’s just a shame that sense of adventure or exploration is missing from today’s culture of instant gratification. But I digress.

Although it was a continuous learning process, we eventually figured out how the software worked, and more importantly, we determined which parameters and data sets we wanted to keep track of. Based on those requirements, we developed a repeatable process for handling our new items on any given Wednesday.

We would first count the new shipment to make sure everything was included and that there were no damages – not that Diamond would ever screw up an order. One of these days I’ll have to tell you about the time our entire order of 52 Week 52 was replaced by Checkmate. Good times. Now, while counting the order is pretty standard procedure for probably all comic book stores, our process had a few more steps to it.

After each title was counted, enough copies would be set aside to fill the pull lists, and one copy would be set aside, in a special pile, for entering into the POS database. The rest would be put on the shelves.

Once everything was counted and the pull lists filled (especially those of our customers who like to stop by before we officially opened for the day), we entered all the new items into our POS database. This involved creating a unique entry for each item. In the “Description 1” field, we typed the Title and issue number. We also had a “Description 2” field in which we included data such as “2^nd printing” or “variant cover”. At a minimum, we also filled in the vendor, cost, quantity, and UPC fields. The end result looking something like this:

Department: Comic Book
Vendor: DC Comics
Description 1: Detective Comics #840
Cost: $2.99
Quantity: 50
UPC: 76194120019484011

Once entered, the books joined their brothers on the shelves.

There’s an old saying in many industries that is very applicable here; “garbage in, garbage out.” In other words, the system is only as good as the data you feed it. If you enter crappy data, you’re gonna get crappy data. And actually, how you enter said data is just as important. The set-up is really the lynch pin to the entire operation.

For example, let’s say in month N, employee A enters Friendly Neighborhood Spiderman #525 into the database, and she does so by typing “Friendly Neighborhood Spiderman #525” into the Description field, which in my book, is the correct way of doing so. And let’s say this employee follows the same syntax for the next several months. Smooth sailing, right?

Well, now we’re at “the next several months” plus one, and for whatever reasons, employee B is entering the data. Let’s say this employee just happens to be lazy, and enters the comic as “FN Spiderman #530.” Now, as long as the UPC is correct, the system will always find the book during a purchase and adjust the inventory quantity accordingly. But let’s say the scanner isn’t working, or you want to bring up a list of all Friendly Neighborhood Spiderman issues. Well, if you sort alphabetically, or do a search for “friendly,” #530 will not show up. And let me tell you something… for a detail oriented guy like myself, that’s incredibly frustrating.

Most of the problems we encountered were just variations of that same theme, i.e. we made errors during the set-up. Unlike Microsoft Office, in which a paperclip thinks it’s smarter than you, the POS system only does what you tell it to do, with the data you give it. Yet in my opinion, those few negatives were completely dwarfed by the numerous positives a POS system brings to the table, or in this case, the check-out counter.

The system integrates credit card processing, which was a big deal for us as most of our customers preferred to use credit cards. Yeah, as the retailer you have to pay a processing fee and the transaction doesn’t actually hit your books for a couple of days, meaning even though somebody bought $25 of comics on Thursday, the money won’t appear in your checking account until Monday, but I still say it’s better than having a bunch of cash lying around.

Gift cards are also a breeze for the retailer to load and equally as breezy for a customer to use when the store is running a POS system – just like at any other retail store. Imagine that; an LCS utilizing the same modern conveniences as all other retail stores.

You also have a detailed history of each transaction, with a receipt automatically printed and the electronic record stored. Those transactions can even be augmented by setting up profiles for your regular customers to track what items they’ve purchased and how much they’ve spent; data that comes in handy if your store has a rewards programs or you like to make recommendations based on purchase habits.

And of course, all of this recorded data makes certain tasks very easy. For instance, right now, it’s tax season, and all I have to do is export sales report from our POS systems and email that file to our accountant, and wham-oh, the dishes are done, man.

Another for instance is reviewing sales history to make more accurate initial orders. One of my Sunday afternoon tasks was to pull up a list of all the items sold that week, which I would then add to a ridiculously nerdy spreadsheet that I constructed to track all manner of sales data for comics including, but not limited to, graphical breakdowns of quantities sold vs. time. In other words, I could quickly see how many copies of each comic sold the first week, how many on the second week, etc. Ultimately seeing how long they sat on the shelf. That way I could ask things like, “do we really need to order 30 copies of Shadowpact if 12 of them are going to sit on the shelf for six weeks before someone buys them?

Of course, the simpler way would be to alphabetize the list of comics sold in the last three months (a standard POS generated report) and base your next initial order on those numbers. So yes, my method was probably overly complicated, but I get off on details and processes like that. I mean, I’ve spent the last two years, off and on, trying to derive an equation that will quantitatively determine the difficulty of any given hike using the integral of the elevation vs. distance curve. But I suppose I should get back to comic books…

In Part 3, I will discuss my opinions of Diamond's customized POS system and why I think there is a resistance to this technology among retailers.

QFT #4 - Part 1: Point of Sale systems: Too Sophisticated for your LCS?

On Thursday 12/27/07, Newsarama posted the latest edition of Talking Shop, a column of sorts in which Newsarama compiles the thoughts and opinions of various comic book retailers from across the U.S. and Canada about hot topic of the day facing the retail side of the industry. In this edition, the topic was the use of Point of Sale (POS) systems in comic book stores, specifically the introduction of Diamond’s POS system, customized specifically for the comic book industry (i.e. its customers). You can read the Talking Shop article here.

It’s writing columns about topics such as these where owning a comic book store for a year is going to come in very handy. In fact, I may just rip off the whole Talking Shop idea, and write a rebuttal of sorts each time Newsarama posts a new one. Kinda like the opposite political party always getting its five minutes of fame after a state of the union address. And for the record, I have no illusions that my opinion should be included in Talking Shop. After all, my store is at this point, to put it kindly, less than successful, so my opinion should be taken with a grain of salt.

Before we begin, and for those of you who neither read the Newsarama article nor pay attention to the registers at any retail store, let’s define a POS system. A POS system is a combination of computer software and hardware that integrates the cash register, inventory management, and sales data into one system. At the heart of the POS systems is the barcode, or UPC (Universal Product Code). 99.9% of products you buy have one.

The UPC is a unique series of digits assigned to that particular product. In the case of comic books from most “big” companies (DC, Marvel, Image, Dark Horse, IDW), the barcode digits appear in this form:

A LLLLL RRRRR B NNNNN

For the sake of this discussion, characters A and B are not important, so we’ll only discuss the L, R, and N groups. The manufacturer (publisher) is identified by the L-group, and the product (title of the comic book) is identified by the R-group. Incidentally, the A through B range appears on virtually every product be it shampoo, flat screen TVs, or potato chips. In every case, the L-group is the manufacturer and the R-group is the product.

The N-group has unique meaning in the comic book industry. It contains the identification information at the issue level. The first three characters are the issue number (001 for issue #1, 666 for issue #666). The fourth character represents the “cover” for lack of a better term, meaning a 1 represents the standard cover, and 2 and up would represent variant covers, typically with lower print runs – conversely, two covers in a 50/50 print run would utilize the same UPC. The fifth and final character represents the printing (1 for the first printing, 2 for the second, and so on and so forth).

With that data dump, let’s look at a couple of real examples:

Detective Comics #838: 7 61941 20019 4 83811

Detective Comics #838 (2nd printing): 7 61941 20019 4 83812

Supergirl #25: 7 61941 24904 9 02511

Buffy the Vampire Slayer Season Eight #10: 7 61568 14111 5 01011

From the barcodes above, we can deduce that 61941 is the manufacturer code for DC, while 61568 is the manufacturer code for Dark Horse. 20019 is the product code for Detective Comics, 24904 is the product code for Supergirl, and 14111 is the product code for Buffy Season 8. Regarding the individual issues, take a look at the two Detective Comics examples. 83811 indicates this is issue #838, standard cover of the first printing, whereas 83812 is issue #838, standard cover of the second printing.

Once you know what to look for, it’s pretty straightforward. Yet there are problems with barcodes on comics. First, there is a governing body for the UPC world and thus manufacturers have to pay for UPCs. As a result, many smaller publishers simply do not use them. As a retailer using a POS system, you can get around a missing UPC by assigning the product a barcode internal to your POS system that can be scanned at the register. Or you can simply enter the title by hand. Either way, the POS system still has a unique entry for that book; the importance of which we will discuss later.

A second problem is some manufacturers will pay for the UPC, but not add the five additional characters for the issue identification. Dynamite is a good example of this practice. Regardless of the issue number, each issue of, let’s say, Highlander, would have the exact same UPC, which the POS system will not allow. To get around this, when we filled in the UPC field in the POS entry, we added “space-issue#” characters. As a result, when you scanned the comic, the system would pull up a list of items with that UPC, and then we would select the specific issue being purchased.

Yet a third problem, but not the last, is the UPC location isn’t standardized from comic to comic. On some, the UPC appears on the front cover, some on the back cover, and others, but much rarer, on inside of the front cover. While the vast majority of UPCs are placed on the front cover, they’ll appear anywhere around the perimeter and in any orientation. This is huge annoyance when you’re processing a large quantity of books during a purchase and you’re forced to flip and spin from book to book to find all the UPCs. Fortunately, DC has all but standardized the UPC location on its books to the bottom-left corner of the front cover. This is yet another reason why DC, in my less than fair and balanced mind, is the best.

In Part 2, I'll discuss what it takes to set up a POS system, its annoyances, and its advantages.

QFT #3: Wizard and Captain America #25

I was browsing the articles on Wizard’s website last week, just killing time at work, when I noticed a banner offering an incentive for subscribing to their fine publication. If this was typical BS incentive such as “subscribe to Wizard and get a limited edition Todd MacFarlane figure,” it would not have caught my eye. Instead, the incentive was “subscribe to Wizard and we’ll send you a copy of Captain America #25.” I was curious, so I clicked on the link. What I saw made me smile.

The basic rate for a 1-year subscription to Wizard is $28.00. A 2-year subscription costs $49.00 (a special price down from $56.00). Now, if you get the 1-year subscription, you can receive a first printing of Captain America #25 (cover of your choice) for $6.99, and with the 2-year subscription you can get both covers for $7.99 total.

Now, if I were a cynical man, I would say this means Cap #25 is essentially worthless because in the case of the 2-year subscription, Wizard is selling each issue for $3.99, which just happens to be cover price – and to think this book was once selling for $100 on eBay. If I was even more cynical, I would read between the lines and say that Wizard has a warehouse full of Captain America #25 first printings, and is desperate to unload them. Finally, if I was a cynical man, I would there must have been something fishy going on for Wizard to have ordered so many when every other retailer severely under-ordered.

Luckily for you all, I AM a cynical man, and I’m also extremely skeptical, so not only could I say all those things, I WILL say those things. So let’s get started and travel back in time, almost a full year, to the faithful weeks leading up to the shipping of Captain America #25…

Amongst retailers, there was an overall impression that this issue was going to include a story-point of above average importance, but for the vast majority of us (i.e. those with no inside contacts at Marvel or Diamond), it was all speculation. Then Marvel and Diamond both sent out “hints” that you cannot order too many of this issue.

Now, even though my store had only been open for a few months at this point, we had already gotten these same hints about numerous books from several companies, so we just assumed these bulletins were yet more smoke being blown up our backsides. Yet, there was a tad more urgency in the tone of these recommendations, so we increased our order by 15% or so. Of course, for us, considering that brought our final quantity to only 40-50 books, the extra cash wasn’t going to kill us if the book turned out to be yet another over-hyped bundle of tinder. Believe me, we screwed up many orders far worse than that, so this was like calling a meaningless $5 raise after losing multiple big pots on the flop. It wasn’t gonna change anything if we were wrong.

The faithful day arrived, and the world woke up to “Marvel Kills Captain America” headlines on every internet news site. Long story short, everyone and his dog came looking for the book, and we sold every copy by the end of the day. As it turns out, Diamond had plenty more in stock (how very convenient) and we ordered 100 more.

Throughout the week, we took phone call after phone call from people looking for the book. The conversations typically followed this pattern:

Customer: Hi. Do you have the issue where Captain America dies?

Us: Sorry, we sold-out the first day. But we have a hundred more will be arriving next week. Would you like us to put you on our wait list?

Customer: Oh definitely! By the way, how much will you be charging?

Us: Just cover price. $3.99

Customer: Really?? But it’s going for $25 on eBay!

Us: Yeah, but it’s a new book. Our policy is to not inflate the price of new books regardless of demand.

Customer: Wow. Cool.

Us: Let me write down your name and number…

We finally capped the waitlist at 80, making sure we had a few issues to put on the shelves. Eventually every copy sold, except for copy I found while packing up the store to move a few weeks ago. It literally slipped through the cracks (between some boxes and the sales counter). It’s now part of my collection.

I know a lot of folks will say that all the new customers the hype brought into the stores was good for the industry, but I disagree. By my estimates, 90% of the new faces, in my store at least, were never seen again. They were interested only in the investment value and not in becoming a regular reader. And that brings me back to Wizard and its role in the Captain America #25 feeding frenzy.

The day the book shipped, many retailers in my area placed it on their shelves with an already inflated price, typically in the $10-$15 range. Most of these retailers were just taking advantage of the headlines. It’s basic supply and demand. I find this practice distasteful, but being the red-blooded capitalist that I am, from a financial perspective, I can’t fault them from doing so. Ethically, it’s not something I wanted to do in my store, but perhaps taking the moral high ground is one of the many things we did wrong.

Things got a little muddier when you looked at the happenings on eBay. Hundreds and hundreds of auctions were immediately in place. Some sellers were private citizens trying to make a quick buck in the afternoon after buying the book from a retailer in the morning. They bought it for $10, sold it for $25, and that buyer may have sold it later that week for $50. I think those people are greedy, and the people that bought it for $50 are incredibly dumb, but again there’s nothing wrong with those auctions.

However, a fair amount of the auctions, dare I say a majority, were not posted by private citizens. They were posted by Wizard. Now, it’s very true that being on the east coast gave Wizard up to a three hour headstart on other retailers in the U.S. It’s also very true that Wizard could have employed a staff of dozens to post auctions on eBay. It’s also very true that Wizard may have heeded the recommendations from Marvel and Diamond and simply ordered heavy on Cap #25, thus giving them hundreds, probably thousands, of copies to sell.

But remember, folks, I’m a cynical man, so since day one, I’ve chosen to believe that much more than just foresight and happy coincidence allowed Wizard to be a big Cap #25 mover and shaker. I believe the good folks at Wizard knew well ahead of time that particular issue was going to be huge. I believe Marvel and Diamond provided the team at Wizard with information that ultimately gave them a competitive advantage – information they withheld from almost every other retailer. Instead of giving everyone the same information, they just asked us to take them at their word that the issue was going to be big.

I’m not the only one who believes this. It’s been discussed in numerous blogs and on numerous message boards. Heck, in an interview with Newsarama, an employee all but said Wizard knew about it ahead of time when he says there are no walls between departments, which I can only assume means the marketing department, having been giving this information for its Wizard World Los Angeles variant of Captain America #25, not to mention the magazine’s featured articles and interviews about Steve Roger’s death that had to have been in the works prior to the book’s shipping date, then wink-winked and nudge-nudged that info to the retail operations of Wizard.

NOTE: At the time I wrote the above paragraph, the search function on Newsarams was not responding, so I was unable to pull, and quote, the original interview. If the search function starts working again, I’ll post an addendum to this column with a link.

I’m bringing up this year-old topic now for a few reasons; 1) My brain dun-gone blank at the half-way points of several columns, so I really needed something to write about, 2) the new Wizard subscription incentive, which I’ll return to in a few sentences, got my creative juices flowing, and 3) I’ve always wanted to publicly vent about this. And you know what? Getting this off my sculpted chest feels pretty damned good.

As for Captain America #25 itself, thanks to the frenzy perpetuated, but not necessarily created by, Wizard and, to a much lesser extant, local comic book retailers, the book sold like gang busters. You absolutely had to have that comic. For a brief time, the ‘90s were back and you were going to put your kid through college by hanging onto a few copies. I really tried to warn people against this philosophy in my store, but most wouldn’t even listen to my advice.

Wizard capitalized, and I’m sure it made thousands, if not tens of thousands, of dollars, albeit of the “quick buck” variety. Even with the frenzy, it’s very obvious its retail department over-ordered the book, as Wizard is now selling it for cover price (with a two year magazine subscription). While these leftovers, I’m sure, are just a drop in the bucket compared to Wizard’s original quantity, the thought of a warehouse full of first printing Captain America #25s, that the company is unable to unload after potentially using insider information to obtain them, is enough come-up-ins to make me chuckle. I mean, if we ever needed more proof that comic books are absolutely not for investing, this was it.

However, personally, the smile I get from the poetic justice is fleeting. The potential collusion between departments within Wizard (and possibly between it and Marvel and Diamond), along with other less than scrupulous acts I’ve seen neighboring retailers commit against customers and other retailers alike, are all big “cons” in my “Should I re-open my store” pros vs. cons list, and that saddens me. But that’s a topic for another day.