Tuesday, October 19, 2004

A Store Near You

An article featured in the first issue of Siklab suggests that the death of the newsstand komiks industry in the early nineties could be largely attributed to the distribution system. It revealed that a seemingly selfish monopoly had the resources to distribute comics nationwide. Smaller publishers who didn't have the same resources had no choice but to ride on the monopoly's system, but their products were unprioritized and the distributor's margin was cumbersome. The monopoly's products contemporaneously failed to improve with the times, and the number of newsstand komiks fell dramatically.

From the stories I hear about the current distribution system, it's not hard to imagine the demise of the current efforts to revive the industry. As capitalism goes, it's tough luck if you don't have the deep pockets to sustain your operations. While it's easy to say that advertising could make the comics publisher breathe a little easier, the fact that a popular mag like Culture Crash exists with virtually no ads is testimony to how belittled comics are by commercial companies. So it's the sales that should keep the small publisher afloat.

Necessary Evil

Distribution is part of the marketing mix. It ensures that you get the product you want at the store nearest you. To put a product in a store, a producer (or publisher, in this case) has to pay a "distribution margin," which is a percentage of the product's retail price. It's like saying to the producer, "Hey, you want shelf space? You better pay for it."

When publishers don't have the resources to deliver stocks to dozens of retail outlets, especially across the country, they have the option of going through a distributor. For a distributor to deliver the goods to retail stores, they ask for a percentage as well. So in a sense, the consumer is saddled by the extra costs of distribution. It's like saying to the consumer, "Hey, you want it near your place? You better pay for it."

These are all necessary evils. Retailers and distributors need to earn something to keep their operations going. However, producers need the sales money as quickly as possible for them to sustain their own operations, leaving them at the mercy of the retailers' and distributors' accounting departments. What if the sales returns aren't remitted on time?

For the small comics publisher, late remittances are bad news. There are magazines that have stopped producing altogether because of it, especially if they don't get enough advertisers. (Know the 60-40 rule? For a high-end magazine to survive, it theoretically needs 60% of revenues from advertising and 40% from sales.)

Alternatives

Given that very few companies would be gung-ho about placing their ads in comics, are there alternative forms of distribution that publishers can explore? Off-hand, internet purchases and home deliveries sound like good ideas, but how many people in the Philippines actually find convenience in them? How many of those interested in buying comics actually have a credit card? And how many of them are willing to wait for the delivery, as opposed to instant gratification by picking their fresh copies off a store rack?

Then there are the convenience stores. I'm not sure if they have a centralized distribution system, and I don't know what their policies are about distribution margins, but then how many comics-buyers habitually make their purchases in those establishments? I'd like to think that there are more convenience stores than there are bookstores.

It boils down to market research. Getting the numbers. If the numbers are promising, and the audience is willing to make an adjustment in buying habits, maybe those avenues can be pursued more aggressively. Still, exploring these alternatives require money as well.

And that's something the small publishers don't have a lot of.

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