Chuck's Personal Newsletter -Variant Editions Explained Howdy! I just finished writing the marketing e-mail which you will find posted at the end of this newsletter. After several years of having evolved that style of writing, I have become reasonably proficient at writing marketing prose. I do have to admit, however, that writing just to sell is almost (but not quite) repugnant to me. I have to do it to keep the company going, but given my druthers, I would only send out personalized newsletters. All of the above having been said, the main topic that I want to cover today is variant editions. I have heard from quite a few of you about your thoughts in this matter, and I thought I would share my own. I will begin by confessing that I am a crazy collector of everything from sparkly rocks, to comics books, to artwork of all kinds. I am not sure why the wiring in my brain is such that I feel the compulsive need to accumulate and sequence tangible decorative objects, but I most definitely do. With that being the case, it has always been hard for me as a collector because, whatever I am accumulating at that moment in time, I want them ALL. Accumulating complete collections can become very difficult, however, when certain objects are extremely rare. In the case of the Pueblo Indian pottery that I avidly collect, for example, each piece is a handmade one-of-a-kind item that was formed on someone's kitchen table, of which there may not even be a single similar example in existence. Pueblo potters will oftentimes make hundreds of plates and bowls (for which I have only a nominal interest) for each canteen or figural piece they create. That is why it just kills me when I miss out on a unique sculpture created a hundred years ago by someone now long since passed. Once I miss it, the chances that I will ever see that item up for sale again, are almost nil. Sigh... Returning to the subject of variant covers on comics, one of the biggest complaints that I hear about variants is that fans are dismayed that they cannot collect them all. Especially when certain variants, such as the Ditko cover to AMAZING SPIDER-MAN #700, are released in such tiny quantities that they immediately start selling in the secondary market for $600-$800. Very few fans have the budgets to afford such luxuries, so I can certainly understand how knowing that you cannot afford an especially cool variant can be really frustrating. Nowhere in life,however, is it stated that anyone has a god-given right to own everything. We all have to make judgements as to what is most important to us, and what our budgets will allow. The fact that the publishers may be creating more cool stuff than we can afford is frustrating, but that does not at all make it wrong. I will now give you a little insight into a Marvel Comics conference call that I participated in a few years back, dealing specifically with variant covers. The question that Marvel was posing at the time was as to whether they should keep creating variants, and in what ratios. The argument that I made during that call was that variants were critical to the economic underpinnings of all comics retailers. How this works is that variants are a reward for risk-taking. For example, if a publisher is releasing what they think will be a great new title they might offer the following incentives: buy 100 copies, get 10 of X variant. Buy 300 copies, get 30 of X variant, and 5 of Y variant. Buy 1,000 copies, get 100 of X, 20 of Y, and 3 copies of variant Z. Clearly, if a retailer has gone out on a limb to buy 1,000 copies of any comic, they are taking on a huge level of risk. That is why variant Z will be priced quite high. We buy our comics non-returnable, so if we guess wrong, we still have to pay the full cost to the distributor, regardless of our sell-through. What helps to offset that risk are the potential revenues from the variants. We have had several instances recently where we did not sell enough of the regular editions on a given issue to break even, but where we were ultimately rescued by our revenues from the sales of the incentive variants. Clearly, variants can help to keep the comics retailing community solvent, and minimize risk. With almost no cost to the publishers... Another question that has risen of late relates to the long term value retention of "hot" new variants. In that regard, I think that it will all depend on the future growth of the new comics industry. We are seeing an unprecedented surge in demand for recent back issues these days, so much so that many people I know are drawing parallels to the overhyped days of the late 1980's and early 1990's, when some retailers were selling everything printed as Hot! Hot! Hot! (Limit 3). The main difference between now and then, is the size of current print runs. During the early 1990's most comics still sold over 100,000 copies per month, and top-selling issues (such as SPAWN #1, X-MEN #1, and SUPERMAN #75), sold millions of copies. Today the average print run is closer to 25,000 copies. That works out to fewer than 500 copies per state, before taking into account international sales. In addition, most comics retailers now order new comics in quantities designed to immediately sell out. Any question about why it has become so darn hard to find an issue only six months old in the secondary market? Those same printing constraints hold true for variants. It used to be that a Platinum edition would have a print run of 10,000 copies. By comparison, I estimate that Marvel has released fewer than 200 Ditko #700's. Big difference... If the comics market contains to grow vigorously at its present pace, I see not only the variants of today, but also many of the regular editions, greatly increasing in value as new demand drives up prices. Moving on to our own Mile High Comics variant editions, I only entered this market because I felt that I had no choice. I advertise Mile High Comics as being "America's Largest Comics Dealer," which by most measures, we are. But this is not a world that stands still for anyone, and it became very apparent to me at the end of last year that we were missing out on a very important growth area in the comics world that not only promised the potential for earnings, but also critically important cachet. Simply put, by creating our own variants we help to reinforce the strength of the Mile High Comics brand name throughout the comics world. All of the above having been said, I have been selling comics for 43 years now, and I have seen (or experienced) just about every idiotic marketing blunder imaginable. One of the worst is for publishers to create a "limited" edition, and then flood the market with copies the minute that the initial sales demand slackens. That will never happen with our variants. I keep tight control of our market by limiting our variant edition sales to 20 copies per buyer. That gives an incentive to those who want to sell them on eBay or other websites to buy a small quantity from us, but not so many copies that they can get stuck with unsold issues. After release,I then steadily raise our own price, mostly to support our secondary price. On our just-released Wolverine #1 variant, for example, we pre-sold them at $6, released them this week at $9.95, and will bump them up to $14.95 at the end of next week. My short term goal is not to sell a lot of copies at the higher price, but rather to leave room for everyone who supported us by advance purchasing our variants to be able to sell their own copies at a profit. We do, however, tend to keep selling copies of all of our own variants on a daily basis, so they then become a long-term annuity for us. Our long term sales on all of our variants should accelerate even further when we print a special variants tri-fold poster next month, with our own variants on one side, and all of the "Phantom Group" variants on the back. I will close this essay on variants by mentioning that I have been having to analyze current demand for older variant editions as a part of the immense updating of our website prices that I began last month. I have been very surprised to discover that 1990-2010 variants that were once in significant oversupply, such as WIZARD 1/2 editions and DYNAMIC FORCES limited covers, are now completely sold out, and consequently rising rapidly in the secondary market. The simplest explanation for this trend is that true scarcity does actually begat real long term value. As long as publishers do not get greedy and overprint their variant editions, it looks like they will retain their values, and remain a fun collecting option for those who can afford them. Chuck Rozanski, President - Mile High Comics, Inc. March 13, 2013 Advance Previews of next weeks comics from Archie Comics P.S. Below is today's marketing newsletter with all the important facts of the day. Just listed 2,000 VF/NM Marvel, DC, Charlton, Whitman, 1980's Comics * We added 2,000+ high grade 1980's comics into our New-In-Stock listings yesterday from that big single-owner collection from New York. Titles include VF and NM groupings of such titles as: FANTASTIC FOUR #167-up IRON MAN #137-up SGT. ROCK #351-up JUSTICE LEAGUE OF AMERICA #129-up SUPERBOY AND THE LEGION #198-up SPIDEY SUPERSTORIES #3-#57 FREEDOM FIGHTERS #1-#15 SUPER FRIENDS #1-#10 TARZAN (DC) #207-#235 DONALD DUCK (Gold Key) #193-#216 DONALD DUCK (Whitman) #217-#245 UNCLE SCROOGE (Gold Key) #144-#173 UNCLE SCROOGE (Whitman) #174 #209 Plus 1,000 more high grade 1980's comics! We very seldom receive a collection of older issues in such high grades... * We also added some very hard-to-find modern comics into our New-In-Stock link yesterday, including the following: DEATH RATTLE (Kitchen Sink) #7-#14 OMAHA THE CAT DANCER (Kitchen Sink) #2-#10 DOOMSDAY +1 (Charlton) #1-#6 SCALPED #1-#6 HARLEY QUINN #1-#10 WARLOCK AND THE INFINITY WATCH #33-#42 * ALL of the comics listed above are eligible for our 30% off SUNSHINE codeword discount. Only new comics (published during the past year) and our books are excluded from the SUNSHINE codeword sale. * Free Bonus Comics offer for today is your choice of any one of the following five DC Blank Cover Variants for a minimum $30 order, or all five for a $100 order. Most retailers do not get any copies at all of these scarce DC variants... Aquaman #15 Green Arrow #17 Green Lantern #13 Justice League #16 Swamp Thing #14 * Our exclusive Mile High Comics WOLVERINE #1 and SHRUGGED #1 Variant Editions are now available for immediate shipping at $9.95 each. Our prices for both will rise to $14.95 at the end of next week. Mile High Shrugged * You can still pre-order our upcoming GUARDIANS OF THE GALAXY #1, THANOS #1, and IRON MAN #9 Mile High Comics variants at only $6 each through Greg and Mario in our new comics subscription department. Call 303-455-2659 (weekdays 9-5) or write nice@milehighcomics.com. Limit 20 copies per client, please. * To read my full newsletter for today, which includes a very candid and revealing discussion of the pros and cons of variant editions, just follow this link, or visit our home page. My longer newsletters are much more personal, and provide far more in-depth information, than the marketing-oriented e-mails that I have been sending out in recent years... Click here to view all of the Premium New-In-Stock Click here to view all of the New In Stock Current Newsletter