Tuesday, August 31, 2010

My Life With Comic Books: Part # 146

The current cast of characters:
Paul Howley: age 44
Mal Howley: my wife
Adam Howley: my son, age 20
Cassy Howley: my daughter, age 15


I received a phone call from Michael Warshaw, one of my old friends, and he was asking if I’d be willing to be interviewed for an article that was going to be published in the national magazine “Inc.The Magazine For Growing Companies.” Michael was a senior editor of this slickly produced magazine and a staff writer was writing an article about the difficulty that small businesses were encountering with the ever-changing Internet world. The writer wanted a short quote from me to include in her article. I was happy to be a part of a national publication because it would be good exposure for my two comic book and collectible stores.

Anne Marie Borrego (the writer from Inc. Magazine) called me to get the quote she wanted for her article. As we talked, she seemed inclined to include my business as a major part of her story. After our half-hour conversation she decided to make us the central business profiled in this story! She arranged to meet at our Worcester location with Ken Carson, the manager of my stores, and myself. She brought a very professional photographer who took what seemed like two hundred photos of the store and Ken and I. While I enjoyed the interview process, Ken seemed nervous. Although I’m pretty good at “hyping” my business, Ken did a better job of conveying our business philosophy. Here is the article that was published in the May, 2000 issue of Inc. Magazine (the entire content of this article is copyrighted by Inc. Magazine):

“How I Learned To Stop Worrying and (almost) Love eBay.”

It’s not just you. Everyone has a hard time adjusting to change--even a superhero. Consider Peter Parker. Other than being an orphan, he lived a pretty typical life for a New York teenager. Raised by his aunt and uncle, he attended Midtown High School and was your above-average tech geek. But one afternoon at a science exhibit, an irradiated spider bit him. Well, life changed faster than you could say “click-through.” Suddenly he possessed extraordinary powers. Parker immediately saw the opportunity in all this. He figured he would make millions as a television star. So he donned a colorful costume and called himself Spider-Man. But that very night, a guard called to Spider-Man to help catch a burglar fleeing past the stage. Parker didn’t see why he should have to do the guard’s job and let the man run free.

Days later, Parker’s beloved uncle was murdered by that very same burglar. Parker was racked with grief and guilt. Faced with the trauma of change, he had blown it. He vowed to fight crime and never again lose sight of what was really important.

It seems only fitting that Spider-Man’s image hangs above the door of Paul Howley’s flagship store, in Worcester, Mass. Howley has collected comic books and trading cards since he was a kid. When he was eighteen, he made it his living, selling his treasures at trade shows and conventions. Now, at age 45, he runs a company called That’s Entertainment, employing twelve people in two stores. (His second store is in Fitchburg, Mass.) He has enjoyed such success that he doesn’t even go to work most days.

In 1997, Howley started hearing about a new Web site called eBay. At first he dismissed the virtual auction house as a passing fad for “quirky collectors.” But he couldn’t resist checking it out. On a lark he searched for a THRUSH rifle, a mid 1960s toy version of the weapon of choice for the villains in the television series “The Man From Uncle.” That particular gun was Howley’s personal “Holy Grail” of collectibles, and he found it on-screen in an on-line auction-- in the original box! Despite his twenty years in the collectibles business, Howley had never seen one of those guns in its box.

He bid a solid $2000 for the toy rifle. With eleven minutes to go, it looked as if it were his! But then, tragically, he was outbid at the very last moment--“sniped,” as eBay regulars call it. Out of the blue, some anonymous bidder had scooped up the gun for $2700.

Howley was crushed. There, within his grasp, was a prize he had searched for his whole adult life. He had never even spied one in its original box at any of the hundreds of shows and stores he had passed through. But just two minutes on this electronic flea market and there it was-where anyone, anywhere could find it. It was at that moment that Howley became very, very afraid. How could his little specialty stores compete with a giant, wonderfully stocked rival like that--one that was everywhere a laptop could be, virtually in the air around him?

Of course, Howley’s business had suffered setbacks before, such as the slump that followed the 1992 publication of the comic book series “The Death Of Superman.” That was the year That’s Entertainment pulled in record-sales. But the entire comics industry was poised to take a dive. In 1993, Howley’s revenues plunged more than 25%. They fell another 10% in 1994. Howley eventually bounced back, thanks largely to a decision to diversify his inventory.

Now his unassuming store on Worcester’s Park Avenue has the usual floor-to-ceiling shelves with a huge variety of comic books: X-Men, Pokemon, Batman, Jay and Silent Bob. But there’s also a sprawling section offering sports memorabilia, a hugely important addition to the store’s product mix. You name it, Howley’s got it, and chances are it’s signed by Ted Williams.

In the mid 1990s, Howley began propping up his business with a profitable selection of photographs, game balls, jerseys, trading cards, bats, and hockey sticks—many of which are autographed by idols like Drew Bledsoe, Nolan Ryan, and Scottie Pippen. Still, despite the success of that effort, That’s Entertainment just couldn’t get back to the kind of numbers it had had when Superman died.

So that’s where Howley was when he first encountered the power of eBay. When he was fighting for that THRUSH gun, he was up against collectors from everywhere—Asia, South America, and just down the street in Boston. The same was true for any item he could think of, from out-of-print laser disc movies to old Archie comic books. Why would collectors bother with a store when they could find anything they wanted on the Net?

It wasn’t that he couldn’t keep selling stuff. The question was, Where would he get it? “I didn’t see eBay as a threat sales-wise,” Howley remembers. “But it is so easy to use, why would somebody sell their collectibles to a dealer that would pay roughly 50% of the value when they could get 100% on-line?” Howley had always depended on his ability to buy entire collections, like the 30,000 comics That’s Entertainment recently bought from one fan to bolster its selection of vintage funny books. Suddenly, any customer could instead sell his or her treasures on eBay, and probably for a better price. Howley’s stores and all others like them were becoming obsolete.

But Howley, like Spider-Man, experienced an epiphany after that initial shock.

Just as Peter Parker discovered that his new superpowers could be harnessed to prevent tragedies like the murder of his uncle, Paul Howley realized he could use the newfound power of eBay for good. He saw an opportunity wrapped inside the on-line threat, one that he could exploit. As an option, it sure beat closing up shop on the spot.

So Howley set up a new computer on a landing in the back of his Worcester store. He even dedicated one employee to the full-time job of eBay auctioneer.

The eBay connection turned out to be a gold mine for That’s Entertainment, a whole new source of revenues. Even better, the explosive growth of eBay did little to erode the stores’ traditional base. The majority of Howley’s suppliers continued to come in to sell and trade their wares, so the revenue boost from eBay represented real growth.

For starters, That’s Entertainment could move items that didn’t have any particular regional appeal. It’s easy to sell Ted Williams stuff in the shadow of Boston. Moving a Stan Musial bat is another story. In Red Sox country, fans of the old-time St. Louis Cardinals great are rare. For months a bat autographed by Stan The Man sat in the Worcester store, its $150 price tag attracting no buyers. So in February, Howley’s staff decided to auction it off on eBay. A fan in San Diego outbid all rivals and got it for $175. “There was some pretty intense bidding,” recalls Ken Carson, manager of That’s Entertainment’s Worcester store. “And the great thing is, we would have never had that connection with that guy.” Not to mention the 16% boost in price, thanks to the auction process.

The beauty of eBay is its power as an outlet for some of the more obscure items that walk in the door. Last year a regular customer brought in a giant stage prop of a cat’s head from a concert by the 1970s glam-rock phenomenon “Kiss.” The seller offered it to the store for $250, but Carson wasn’t confident it would sell for the 60% markup needed to justify the purchase. After some bargaining, he and the seller made a deal: That’s Entertainment would auction the prop through its eBay account and take a 40% commission.

Next chapter: The conclusion of the Inc. Magazine article.
Picture: Paul Howley, owner of That's Entertainment (from INC. Magazine article)

1 comment:

  1. *Grin*

    9 years I was the top seller of Christian Music on Ebay. I paid my dues though... Ebay fees of $400 - $2000 PER MONTH... still, it was incredibly fun and worth it. And boy the stories I could tell. (good and bad...)

    Thanks for posting all this up, Paul, it's been wonderful to read through start to (near) finish.