Pricing Back Issue Comics That Suddenly Spike In Demand Howdy! I had already planned to continue today with my series of essays on how we arrive at our website back issue comics prices, but now that all comics featuring Neil Gaiman's Angela character have exploded in price overnight, I have an excellent series of current events that easily help me to illustrate for you precisely what we do when certain comics suddenly surge in demand. To begin, because we agreed to participate in a program that Marvel marketing created earlier this year to put a big push on their upcoming GUARDIANS OF THE GALAXY re-release, we were selected six weeks ago to be a part of a very important conference call with Marvel's editorial team. As I reported in my newsletter on the day following that call, the Marvel editors and writers made it abundantly clear to us that they had very big plans for the GUARDIANS during 2013 and 2014, culminating in the release of a GUARDIANS movie in the late summer of 2014. We came away so jazzed from that discussion that I immediately raised our initial order on the prequel GUARDIANS OF THE GALAXY #0.1 from 100 copies, up to a very aggressive 1,000 copies I now need to digress a little, and talk about new comics ordering risk, and who bears the cost of that risk. To begin, we offer advance pre-orders for new comics through our subscription department at discounts ranging from 10%-40% off of cover price. We can afford to do that because we require either a prepayment in full, or a credit card on file. By having guaranteed payment in advance, we are assured that we will sell whatever is being ordered, thus eliminating almost all risk to us. No matter how generous the incentives that we offer for advance ordering, however, there are always some fans who either choose not to advance order their new comics choices, or who receive information after the fact that causes them to want to purchase a given comics title after it has already been released. Our problem in this instance is that when that potential demand fails to materialize, we then have to bear all the costs of those unsold issues. That may not sound like such a big deal, but multiply our average cost of $2 per new comic, times the thousands of issues that we end up not selling each month, and the very considerable risk of speculative ordering becomes much easier to see. In the end, the only way for us to minimize our losses from this uncertainty in ordering new comics for sale through our back issue department is for us to immediately add $1 to our sales price on all new comics that we offer via our back issue website. We do get some complaints about this $1 surcharge, but our response is always the same: if you want to obtain new comics from us at cover price or less, just place an advance order through our subscription department. Simply put, we have seen more of our fellow comics retailers fail as a consequence of speculative ordering of new comics, than for any other reason. Returning to the order that I mentioned earlier for 1,000 copies of GUARDIANS OF THE GALAXY #0.1, I have to tell you that I almost never go that far out on a limb. We do sell upwards of one million comics per year, but that demand function is spread out over hundreds of thousands of different issues. For me to bet thousands of dollars of our hard-earned working capital on just one upcoming comic book, means that I really do believe in my heart-of-hearts that there is potential for a very big payoff. That reward can only materialize, however, if we can ultimately sell at least some of those issues at substantially above cover price. This dramatic premium over cover price, in turn, can only come about if some previously unknown catalyst acts to greatly spike demand for that issue, well beyond the bounds of the original print run. Based on current events, I am now projecting that we will be able to sell our remaining copies of GUARDIANS OF THE GALAXY #0.1, #1, and our variant cover edition of #1 at a significant premium over cover price at this year's San Diego Comic-Con. Going full circle back to Neil Gaiman's Angela moving from Image to Marvel, that is a development so unexpected that it caught the entire comics world by surprise. Many of us who earn our living by helping comics fans were aware that Gaiman had been in litigation for many years with Todd McFarlane over who owned the rights to Angela. But after the courts ultimately ruled in favor of Gaiman, we thought that was the end of the story. Little did we know that Angela was now going to become the lead character in an huge new series spanning the entire Marvel Universe, nor did we have any clue that she might be featured in the GUARDIANS OF THE GALAXY film. For once, Marvel caught us all completely by surprise... All of the above having been said, we had a couple of fans ask us at our Mega-Store this past weekend how we came to raise our retail price on SPAWN #9 (featuring the first appearance of Angela) overnight from $2, to $70. The answer is really simple: that's what eBay bidders told us to do. Simply put, when a comic suddenly converts from being a $1 bin book to white hot overnight, we have no way to measure the degree of overall demand except to go to eBay, and start analyzing current sales and bidding patterns. What our database pricing manager, Will Moulton, saw on eBay on Thursday was that current auctions on SPAWN #9 were running in the $28-$33 range. We had no idea if these were the final selling prices, however, because these auctions all still had plenty of time to run. So what we decided was to go to a $70 list price, which when discounted by our current 40% off SPRING! codeword discount, left a net of $42. Slighter higher than eBay, but still within the target bidding range. At the same time, however, I also made the decision to create goodwill by giving away at least 100 of the copies of SPAWN #9 that we had in stock as a reward to anyone willing to place a minimum $50 order with us. My goal was to first establish a realistic base value based on activity on eBay, but to then use that value only as a barometer for folks to recognize the value of the free incentive that I was providing to them. Ironically, the newly created demand was so high for SPAWN #9 that we immediately began selling copies via our website at that seemingly absurd $70 price. You do have to bear in mind, however, that "absurd" is in the eye of the beholder, as in about 1985 I sold all 300 NM copies that we had in stock at that time of HULK #181, when they spiked to over $20 (!) per issue. Little did I know that a single CGC 9.8 graded copy would sell for upwards of $8,000 today... So what is the future value of a comic like SPAWN #9? Well, it did have a very large initial print run, so there are plenty of copies available right now in the secondary market. That would argue for a longer term price in the $5-$7 range. What is happening today, however, is that we are experiencing an amazing level of growth in new comics sales, with titles related to the AVENGERS movie leading the way. At the same time, we are also seeing a degree of interest in American comics from overseas buyers that is completely unprecedented. If the GUARDIANS OF THE GALAXY movie were to be a hit (especially overseas...), and if Angela is an important part of the storyline in the movie, today's $30-$40 price point for SPAWN #9 could eventually seem cheap by comparison. What I can tell you today with some measure of certainty is that later appearances of Angela had far smaller print runs. The actual ANGELA #1-#4 mini-series sold pretty well when it came out, but even later issues of SPAWN that featured Angela were printed only in small fractions of the original print run of #9. There are never any guarantees in this world, but my instincts are telling me that many of the more obscure titles on the full Angela appearances listing that follows this essay are going to be very hard to find in the near future. That almost always means that prices are about to spike, probably to even crazier levels than today. Low print runs meeting high demand is almost always a prescription for substantial increases in price. Suffice it to say, I sure wish that we had more copies of all the Angela titles in stock right now... Happy Collecting! Chuck Rozanski, President - Mile High Comics, Inc. March 25, 2013 Advance Previews of next weeks comics from Archie Comics Click here to view all of the Premium New-In-Stock Click here to view all of the New In Stock Current Newsletter