I had another interesting comment yesterday to my WHY DIGITAL COMICS SHOULD REMAIN CHEAP post. This one was regarding Diamond Distributions (and I suspect it was actually written by someone at Diamond). I wanted to spotlight it because it brings up another important point. They said:
You do realize that Diamond takes 60% and that most retailers buy from Diamond between 45-55% off cover price? That means Diamond is making anywhere between 5-15% depending on the size of the retailer? I'd hardly call that an "obscene cut of profits".
It's a cost of doing business. And if you can't sell 2K comics (which is basically 1 comic to each store out there)... you really shouldn't be in the comics business.
Okay, two things going on here. First, the Diamond rate…
Yeah, Diamond does take 60% of cover, or more in some cases I've heard. BUT they no longer pick up comics from the Brenner printing docks. I just found this out when I made a call to Brenner today. Nice. Thanks Diamond. Fortunately Brenner ships books themselves and has a good rate.
By the way, I can't say enough good things about Brenner Printing. All my interactions with them over the years have been top rate. Friendly, professional and they deliver on time.
Diamond is doing business like they did 30 years ago - it's a broken model. Makes no sense to pay 60% of your cover to someone to distribute a book. Diamond should be charging a flat rate to distribute your book. Point A to Point B. That is what Diamond does. They take your book to the comic books shops. Period.
This whole routine of charging a percentage of cover is ridiculous. Does it cost them any more to distribute my book if I charge $4.00 for it than $1.95? No, it doesn't. So why should they make more money to distribute my book if I charge more money? All this does is encourage me to charge more, which is bad for the industry.
So what else do you get for Diamond's rate? The privilege of being in their catalog, which is seen by every shop in America - 2000 according to the email above.
Here is a way for Diamond to cut costs. Do away with the catalog. The paper catalog. Lose it and put that sucker online. Make it password protected so only retailers have access to it. Make it searchable, so retailers can quickly find books by company, genre, page count, cost. That'll save you some money right there. Charge a small fee to every company to be listed in the catalog. More income that companies won't mind paying - say something like $20 a month, or $5 per issue. Something like that. More money coming in.
Move to a flat shipping rate based on weight of a package. Eliminate minimum print runs. Now you've suddenly added hundreds if not thousands of small press companies to your distribution routes. You're bringing in new income!
THIS would allow the publishers to cut costs of their comics, because now you don't have to pay 60% off the top to a distributer. Lower costs mean customers can buy more comics. This in turn grows the industry and makes it healthier and perhaps keeps it from dying, which is what it is slowly doing right now. Everyone benefits.
So Diamond makes a small amount off actually delivering the book, and then retailers buy from Diamond between 45-55% off the cover of that book. Now how would that business model be unfair?
Now for the second part –
And if you can't sell 2K comics (which is basically 1 comic to each store out there)... you really shouldn't be in the comics business.
Really? And who are you to dictate that? If I have 500 comic shops out there that want to read my comic book, why shouldn’t I be able to deliver it to those 500 readers? That is arrogance, some sort of entitlement that makes Diamond think they’re the guardians of quality and keepers of the comic book gate. They are distributors. Nothing more.
Again, the entire model is outdated and inefficient. Time for a change. I really, really hope something better comes along, because all Diamond is doing is encouraging publishers to charge more, which in turn discourages readers from buying, which is slowly killing the industry.