Tuesday, March 06, 2007

Discussing Discounts

My column on the local store that closed up shop is now live on Sequart.com. Click here to read it.

In it I discuss what I noticed while there for about an hour a few days before they closed, as well as what I knew about how the owner did business. The main problem I think he had was his habit of discounting products. I don't think he discounted every product, but he did discount some and would also give some deep discounts to his regular customers.

Even big store chains like Barns & Noble suffer when they give deep discounts on products. Their stock recently fell when their earnings fell short of projections, and this loss of earnings was credited largely to in-store discounts. Click here to read the article.

Not every store has the buying power of Wal-Mart, and can afford to sell products at a discount off of the SRP. Most of the time they tell the manufacturer what they'll pay for the bulk amount they want for their hundreds of stores - I sure can't do that. Even Diamond Distribution doesn't give me that kind of buying power. While we do have sales on occasion, and have a bonus point program for our subscribers, we have never bowed under the pressure of on-line or other discounters. There have been times when people have come in to our store and told us that they'd like to switch to us, and that they get tons of comics every week - but they get a 30% discount at their current store. I tell them they won't get that here, and they're upset. But, if we offer it to one person to get them to switch, then we'd have to offer it to everyone. Plus, how do I know that's the discount he's getting? Maybe he's trying to get a lower discount that what he's already got. And, I don't want to do business with that kind of person - the kind who always complains about prices and demands discounts like he's doing us some kind of favor. Sorry, I'd rather have 5 good customers that only get a handful of comics than 1 pain in the butt customer like this who gets TONS of comics. If you read my Sequart column you'll see why.

5 comments:

James Meeley said...

Lisa:

LOL! What serindipity this entry is. I had a very "heated" discussion about this very topic at a Yahoo forum for comic art fans.

A guy who was taking over a local shop asked the folks on the forum to give their advice on what he should do (excluding the "get out now" stuff, which he'd already heard from many others).

In my list of advice, i suggested not to offer discounts to pull file consumers. I said that while it might seem like a good idea at the time and that the customers would probably like it, in the end it hurts your business (and bottom line) a lot more than it will ever help. I even offered him other ideas to make getting a pull file seem worthwhile (Stuff like a quarterly raffle drawing for a cool prize among the pull file folks, a slightly larger discount to pull file holders during your regular semi-annual sales, and even a special club-like grouping which does fun stuff, like an after store hours movie & pizza party, only for those who have a pull file).

Well, I unknowingly unleashed the gates of hell, as other then had to take me to task for even DARING to suggest not to give a discount. Everything from "I'd NEVER shop at a store that didn't give me a pull file discount!" to "Why would you even enter a shop that didn't offer pull file discounts?" to one guy telling me that I "know nothing about the retail marketplace and customer service" (despite the fact that I've worked in comic shops on both coasts, and have well over a decade of experience with this industry on a retail level). Many of them just had to tell me that the ONLY reason they shopped at the LCS they do, is because of the discount they get. Oh, they want the friendly and knowledgable stff, the clean and inviting storefront, the vast amounts of product available on the floor, but in the end, all they cared about was price point. One person even said that, even though a regular pull flie discount might hurt your bottom line, it's better to get some money, than NO money (since, of course, no one in their right mind would ever buy from a shop without a pull file discount).

So, I know the type you say you don't want to deal with. I applaud you, though, for standing your ground and not letting the whiney consumers make you ignore good old fashioned business sense. Funny enough, not of the folks who blasted me have ever run a comic shop, even the guy who said I didn't know retail, runs a shop that sells sporting equipment. Not exactly the same as dealing with the realities of the comic industry and it's one main distributor.

Anyway, I just wanted you to know, despite ho many folks whine and demand discounts, there are those of us who understand the realities of the business. Keep on keepin' on!

Lisa said...

James, I didn't realize that you had direct market work experience - but it does explain your knowledge and sentiment about the industry.

We have plenty of people who shop here and pay full price without complaints. We do things like a birthday card offering 10% off a purchase for pull customers and our "Bonus Points" program that allows people to earn money off based on their past purchases. Gamers can get punch cards where once they fill up the card they can get 20% off of the next game purchase. A few times a year we do sales and invite anyone who has given us their name and address. These are ways of giving people some breaks without putting us out of business.

I have learned that most comic book fans who post on the internet know nothing about business, let alone running a comic book store. They might pretend to, but they really don't. This is evidenced frequently on sites like the one you mentioned and Newsarama (see my post on the Digital Comics Newsarama column).

My store is in a suburb, so there is no way I could feasibly make up the volume I'd need to gain if I gave everyone a discount on products. We've been lucky enough to develop a great customer base that has kept us around for over three years. We're not rich, and sometime we feel a cash pinch, but we're still here thanks to customers who understand that we can't offer them discounts but we can offer them selection and service.

Lisa said...

Oh, and let's not forget how many pockets that $2.99 has to go to - store and store staff, Diamond, the publisher and the creators. That's a lot of people splitting that $2.99! When the comic book retailer gives a discount the only person who looses a pice of the $2.99 is the store.

Jeff Sonnentag said...

Lisa,
Thanx for the Movie last nite....a "perk" I'm guessing made available because of a highly successful business charging retail prices. (LOL) ...
Anyhow price is sometimes secondary when you cosider the other factors in the full experience like friendly (sometimes) shop owners, a nice clean shopping atmosphere and helpful advise on new and future product.I have shopped at stores before where the owner had no ideas on what to read or what would interest me, all he knew was that "this particular version or issue was short shipped and will be worth many times its cover price next week.
So...What's all this about a gamer punch card?

Peace out ...Jeff

Lisa said...

Glad you liked the movie, Jeff. It was pretty awesome, and nice that so many of our customers were able to take advantage of it. Definately a benefit of having a store that has a little cash available to pay for marketing like that.

I don't know why we never thought of the gamer card for you... hmmmmm... anyway, for every $5 in games you buy you get a punch and once the card is full you can use it for 20% off of a game purchase. We should have your Descent expansion today, so don't let us forget to give you a game card with it!