BOB WAYNE ON DC'S NEW FOC SYSTEM

[MattBrady]

In October, retailers may start to see some changes in how DC’s products move through their stores. That month will be the first where orders were placed using a Final Order Cut-Off system similar to Marvel’s, that is, orders can be adjusted (for monthly comics) up or down up until a Final Order Cut-Off date that falls three weeks before the comics’ in-store date. This is a change from DC’s previous system which allowed for one, monthly order cut off, and only increases in quantity being allowed (in the form of advance re-orders).

The upside obviously favors the retailer here – instead of waiting until three issues have been released (given comics production and release cycle with a monthly order cut off) to increase or decrease orders up or down on a new series, the window is much narrower, allowing retailers (if they choose) to increase orders on a surprise hit, for example, or cut (or even cancel) them on an unexpected bomb.

The program had been tested and tweaked before going company-wide, most notably with the first twelve weeks of 52, and during its initial roll-out, retailer discounts will be set at the average earned discount from the past six months.

We sat down with DC Vice President – Sales Bob Wayne to talk about the system, and get some idea how – or if - it will affect what readers see.

Newsarama: Starting with the largest focus here Bob, why move to this system from a monthly ordering system?

Bob Wayne: We still actually have a monthly system, because the retailers may place their initial orders at the same time in the cycle as they have in the past. The customers indicated that they wanted us to try this, so the simple reason is that our retailers demanded it.

NRAMA: Is this a win-win for both you and the retailers, or do the retailers come out slightly on top here?

BW: It’s a positive for DC in that our feedback loop tightens up – we can know what’s working - not just from anecdotal information, but with hard number information, because retailers are voting with their adjustment numbers. If something’s not working, then they’ll be cutting their numbers, and if something is working, there’s a focus period where they’ll be looking at their numbers, and have the chance to raise them.

Our experience with 52, and conversations we’ve had with retailers about similar adjustment systems leads us to think that we’ll probably end up with more comics being ordered with this program than less. In that sense, it’s a good thing for DC. For retailers, they’ve been asking for this, and feel that they benefit by knowing that, if they’re not going to be able to sell something, by not having it shipped to them, and not having to pay for it. It’s a virtuous cycle.

NRAMA: “Other publishers” – you’ve said it before that Marvel did the research for you in regards to seeing if a program like this could work in the industry…so it’s similar to their program?

BW: It’s similar in the basic concept. The primary differences are that we use a different printer that marvel uses for most of its titles, so the logistics of how the printer operates, and how the books get from the printer to Diamond, to the retailer, and into the hands of readers is not identical.

DC makes a wider variety of types of items – comics, the different formats and the items from DC Direct, so there’s more complexity. We have more flavors in our restaurant.

NRAMA: So does this cover all the products produced by DC or just the comics?

BW: It’s going to cover all the product. The amount of time a retailer will have to adjust orders will differ by the type of product. A periodical comic will have one lead time for a retailer to adjust their order; a trade paperback will have another lead time, a hardcover a different lead time. This is an attempt to have a “just in time” order adjustment system, so if one thing takes four weeks, and another takes eight, while another takes sixteen, then that will be reflected in the deadlines that retailers see in regards to when they can make adjustments.

NRAMA: Do you think those system will have any effect on the editorial side of things? For example, as you said, the feedback will be tighter and faster, and a decrease in orders may suggest retailers would like to see a change, editorially, and increases…perhaps a continuation of the current editorial conditions…

BW: In an ideal world, our leads times are such, and the amount of times needed to prepare comics for publication that the changes we’ll see will come at a time when current issues are pretty far into production, so it’s not likely that you’re going to see a miniseries announced that changes from seven issues into four due to a negative change. It is possible that with something that had been announced as six issues we’ll know much quicker if we want to make it an open-ended series, so there is that kind of possibility.

But as far as tweaking storylines, and having any kind of vox populi in that respect, I fear that editorial gets more than enough feedback from readers along those lines right now on these message board things I’ve heard about [laughs].

NRAMA: We’re in an industry now that has the FOC as a known feature from a major publisher for a few years now – generally speaking, what have you seen as the effects of this?

BW: Generally speaking, this has been a positive tool for retailers that they’ve asked for, and we decided to follow the general concept with our own kinds of tweaks.

We anticipate that this will give retailers a way to feel better about making their own choices as a series progresses through its early issues, as well as what type of inventory they want to keep, and how they want to monitor their sales. It’s been successful for other people, and it’s one that we want to use ourselves.

NRAMA: Do you think this will be something that you’re going to see retailers grab hold of this en masse, or do you see a gradual move from the monthly date to the FOC date?

BW: I think this gives retailer an option they can choose to use if they want to or not, really. One of the things that benefits retailers on this is that when they’re ordering an issue of something they haven’t seen yet, this system allows them to go back a tweak their order numbers. We’ve seen, and heard from retailers that the FOC system really helps when they’re ordering a comic in a style which they’re not at all accustomed to, which for us has been 52. We tested the program with that title, and also allowed a partial return system so that retailers could be both as aggressive and as comfortable as they wanted to be with the series. To date, we’re not seeing any shortages with the issues of that series, due in large part, we feel, to the FOC program we were testing with the series.

NRAMA: Speaking generally, why would you forsee a retailer increase or decrease their numbers?

BW: Let’s say you’re a retailer, and you’ve ordered issues #1, #2, and #3 of a new series. Let’s say issue #1 comes in, you sold out, and you have to place a reorder. You might want to also take the opportunity to quickly increase your order for #2 and #3. In the past, reordering #1 might have come after the point for increasing your orders on #2 had passed. Under this, there’s a better chance that retailers ill be able to catch that increase and have the increased in copies be taken into account along with the retailer’s initial order number. And of course, for issue #3, it will be easy for retailers to gauge the demand in their store and, with the FOC system, adjust their orders accordingly.

Likewise, on another #1, if a retailer ordered 100, and only sold 45, they wish they’d ordered 50. If they ordered 75 of #2, they can reduce their order down to 50. In the past, they wouldn’t have been able to do that. Those 25 copies, if they didn’t sell, would be sitting there on the shelf or in the back room.

NRAMA: Will this have any affect on the level to which DC overprints titles?

BW: We’ll be watching how the orders come in, and how they pattern against the previous orders. It is possible that on some titles, we will overprint less, but it’s not likely, initially. We’ll have to build up our own level of information as to what this means. If we feel that something is under-ordered on the first issue, and the first issue, and we don’t get any adjustments upward on the second issue, then it will make it quicker for me to think that we don’t need to be printing a a really heavy overprint on #2, because on this system we’d be getting enough feedback quickly to tell us if something was a hit or a miss.

NRAMA: Globally in the world of publishing…where does this type of model fit in? Does this move comics more towards traditional magazine publishing in terms of ordering, or are comics still out there, away from the crowd and unique?

BW: Comics are relatively unique because we have multiple distribution channels that have different terms of sale, and different conditions of sale. When you’re talking about TV Guide going into the local 7-11, no one, in most cases, is tweaking those numbers up or down on a regular basis. There’s just a standard draw where, say, ten copies go in every week. At some point, someone from TV Guide probably sifts through a big mound of data, and realizes they’re putting in ten copies at 7-11 and getting seven back, maybe they should only put five copies in. But generally speaking, there’s not a constant tweaking issue by issue.

NRAMA: Finally, was this something that required negotiations with Quebecor? After all, while this was a change to your system in terms of when numbers would come in, it was a change for them in terms of equipment usage and when, etc…

BW: Our printer has been a very good partner for us over the years, and they’ve been into the offices to meet with us several times as we discussed how to implement this. They’ve been all for whatever helps us sell more comics and helps our retailers sell more comics.

[Sean Walsh]

"Who benefits?"

Why, the heroes' famil............

Oh wait, that was something different.

Never mind.

[IronWolf]

It Worked for marvel why not do it.

[calliopes]

This is good news for everyone involved. Now the only part left to figure out is what the new discount plateaus and Diamond's minimum order will be.

[gunoz]

I've heard from people who work in stores that they tend to be more aggresive in ordering Marvel titles because they could cut back on #2 if it flops, and more conservative with DC titles cause they couldn't. Wonder if this will change that and drive sales higher.

[CParadise]

Oooph, I have been using the new FOC system for 3 weeks now, and I am so happy. I have had lots of problems with DC books, specially after the Post Crisis explosion of titles and lackluster sales due to Civil War dominance, now I can gauge my demand a lot closer to release time and adjust it. Been doing it with Marvel for a long time, and loving it. Thanks DC.

[Brenticles]

Yep, anything that helps DC perform better financially is a good thing as far as I'm concerned.

Also, this just might increase the voice of the readers. Let's say a new art team is put on a two-issue fill-in. If it is a team that is not very popular, the number of people dropping the title will have a more immediate and more accurate impact.

[Hobowatcher]

I always wondered why I hear about more people droping DC books of creator change than people dropping Marvel books when the creators change.

[S-Prime]

What the FOC?

[Kolimar]

Very good news.

[Kolimar]

Originally Posted by S-Prime

What the FOC?

*Groan* You're worse than me and that's major achievement.

[Matthew E]

What I want to know is when they're finally going to get around to lowering the Canadian prices to better reflect the exchange rate. They've been talking about it for months, but how long does it take? Let's see some results.

[Brenticles]

Originally Posted by Hobowatcher

I always wondered why I hear about more people droping DC books of creator change than people dropping Marvel books when the creators change.

Hmm...I don't know, I was just using that as a "what if" example. Personally I will stick with a book for a while before the creative team gets to me.

I only recently got tired of Flash and Hawkgirl and will probably try them again at the slightest change.

[nighwing2001]

I'm guessing that as a customer this is more important to the retail side of things than the customers side. Now I'd like to know what is going on with all the lateness DC has had lately and if something is actually being doen to address this issue for the customer (I know that this issue affects the retailer too).

[Adm_Snackbar]

Typical DC... always copying Marvel. Or is it the other way around? I forget.

[JohnLynch]

Originally Posted by CParadise

I have had lots of problems with DC books, specially after the Post Crisis explosion of titles and lackluster sales due to Civil War dominance

So is that why they had to shoehorn CW and release it when they did? To try to screw over DC's post-Crisis release? I always felt that CW had something to do with DC, but I couldn't say why except for a vague feeling.

It’s similar in the basic concept.....DC makes a wider variety of types of items – comics, the different formats and the items from DC Direct, so there’s more complexity. We have more flavors in our restaurant.

This seemed like an attempt to say "no" to a question where the real answer is "yes" and it just doesn't seem necessary. Not for an interview at Newsarama. Marvel tested something and it worked better then their previous method. DC would be silly not to move over onto Marvel's system. Just as DC is testing 52, if it works, perhaps in the future we'll get a Marvel version of 52. Regardless, the companies test things out, when it flops the other company is wise to not give it a go themselves (at least not without some changes), when it works the other company is wise to take on the change themself. No need to pretend that isn't what's going on.

[Frank Cho]

Forget DC copying Marvel. They're copying me.

Here's the t-shirt that I made and have been selling this fall...

[Knowbrainer]

Mr. Cho, let me just say I love your artwork. Awesome shirt, too.

Originally Posted by Adm_Snackbar

Typical DC... always copying Marvel. Or is it the other way around? I forget.

I feel DC's the better company (their editorial staff doesn't do nearly as much mudslinging as Marvel's), so them adopting the FOC seems more like they wanted to gauge how well Marvel did with it before adopting it.

[Somebody]

Originally Posted by Frank Cho

Forget DC copying Marvel. They're copying me.

Get back to Liberty Meadows, slacker!

One issue in two years isn't enough

[KentL]

Originally Posted by nighwing2001

I'm guessing that as a customer this is more important to the retail side of things than the customers side.

Actually, this benefits customers a bit, too. The fact that retailers can adjust their orders up on titles that are popular means that it'll be easier for customers to find the hot titles. It also means less second prints, I would think, which is better for the final customer as well.

Also, giving the retailers more control like this allows them to not throw money away on stinkers, which (of course) makes for a stronger retailer in the long run.

KentL

[jhues]

One distinct disadvantage is for retailers, and maybe I'm the only one, who moved to a storefront from a pre-order only internet-based business. See, under the old system, your DC and overall Diamond discount was based on your pre-orders for that month (Marvel's been the past six months for awhile). Well the very first month that I am boosting my orders by at least doubling them if not tripling them, the system changed. This was last month's orders, and my very first preorder for the store. And so for the time being both Diamond and DC discounts are using this past six months average to determine discount, and neither have made a final determination yet as to what will be done permanently going forward. So now I'm looking at my average order for the past six months being my discount (think the lowest possible) and if a decision isn't reached soon when the next preorders are due, I will again be stuck witth this considerably lower discount. Suddenly everything changed for my plans for my grand opening as my discount was 10-15% lower than anticipated.

So I began to speak with Diamond to see if anything can be done about situations like mine before that order was due. And now it has come and gone and another one is looming and Diamond and DC are still determining what, if anything, can be done for situations like mine. The past six months average discount structure certainly impacts growth like we are experiencing at PopBuzz because you have to take on additional costs until your new larger orders have been in place long enough to start to affect your discounts in a positive way. It's probably not a big deal for larger established stores, or new stores as they have a system in place to help new stores, but existing smaller stores that are trying to grow are going to have to rethink the way they do so in light of this change. My overhead is higher than anticipated going into this; when we signed our lease, while my profit margin is lower, so that's two shots against us before we opened our doors. And the biggest thing was that I had no idea this was going to happen until we had developed our business plan, set our finances, and singed our lease. Prepare for the unexpected certainly came into play here.

That said, we did open our doors this past weekend, we have our Grand Opening Celebration scheduled for this upcoming Saturday, today is our very first New Comic Book Day and we are very excited about the future, just more cautiously so.

Jason Hughes
PopBuzz LLC
217 E. Main St.
DeSoto, MO 63020
314/221.0237
jason@popbuzz.net
www.popbuzz.net
www.myspace.com/popbuzz

[AlterEgoComics]

Who really wins with the DC FOC? The retailer.
This tool makes it SO much easier for us to adjust our initial orders. I was thrilled when Diamond launched their new retailer website and the DC FOC was part of it.

Jason

[The Marvel]

Who benefits? My guess would be DC, or they wouldn't be doing it.

This whole retail business is getting all FOCed up...

[Comics&Beer]

Originally Posted by AlterEgoComics

Who really wins with the DC FOC? The retailer.
This tool makes it SO much easier for us to adjust our initial orders. I was thrilled when Diamond launched their new retailer website and the DC FOC was part of it.

Jason

Hey Jason haven't seen an article from you guys in awhile, how are things in the store? I really enjoyed reading those updates on your new store.
So just off the top of your head, will this mean that you can order more and cut back if necessary as the release date gets closer? Or do you think you will keep initial orders the same and add more if need? Just curious how the stores will respond.

[AlterEgoComics]

Originally Posted by Comics&Beer

Hey Jason haven't seen an article from you guys in awhile, how are things in the store? I really enjoyed reading those updates on your new store.
So just off the top of your head, will this mean that you can order more and cut back if necessary as the release date gets closer? Or do you think you will keep initial orders the same and add more if need? Just curious how the stores will respond.

Things are going really well man. Glad you enjoyed those articles. They were fun to do and helped me network a lot.
With my initial orders on DC books now I don't have to be so pressured to hit the numbers on the head the first time. I can be more liberal with my initial order and adjust from there. So far I used the FOC both ways. I have increased on some books and have decreased on a few books that have lost steam in my place. Nightwing is a good example. It lost lots of steam from when OYL started. But with Wolfman coming on...people want to check it out. So i increased that title.
Basically it's just a great tool that retailers can utilize.