Wednesday, September 1, 2010

My Life With Comic Books: Part # 147

The current cast of characters:
Paul Howley: age 45
Mal Howley: my wife
Adam Howley: my son, age 20
Cassy Howley: my daughter, age 15
Ken Carson: manager of our stores

“Conclusion of the article about our stores in Inc. Magazine.” The entire content of the original article from Inc.Magazine is copyrighted by Inc.Magazine.

Inc.Magazine writer, Anne Marie Borrego, wrote:

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.

There appeared to be little interest when the auction first went up on eBay, but as the week progressed, Kiss fans emerged in droves. And in the last ten seconds, the bidders were in a frenzy, sending the price from $800 to $1500. That’s Entertainment made $600 from the sale, at least $450 more than it would have made if it had sold the cat’s head in the Worcester store.

In 1999, Howley’s first full year of selling on eBay, That’s Entertainment averaged $4000 in on-line revenues a week. The company is now an official eBay “PowerSeller,” with more than 1000 transactions to its credit. The company’s sales have now hit a new record.

There are, of course, the obvious growing pains that come with a new revenue model. Take inventory, for one. With new auctions going on-line daily, That’s Entertainment has to stock more merchandise, much of one-of-a-kind items of all different sizes. That’s being handled now with an inelegant mish-mash of adjustable shelves in the back of the Worcester store. At first, a running list was used to keep track of everything. Now the store has a searchable database, but Carson says he finds it confusing and a bit cumbersome.

And then there’s the matter of shipping. It took a big bite from the $600 profit on that giant Kiss cat’s head to custom-pack the thing and ship it halfway across the country. Carson, for one, says he’ll think twice before putting another large, delicate item up for auction. He wasn’t looking forward to going through the same process last winter with a new arrival, a life-size figure of Anakin Skywalker. You don’t move a heavy thing like that by trusting the Force. So when Skywalker came in, Carson decided to put it out in the store to see if he could sell it to a walk-in customer—and in March he did.

But there’s an even darker side to That’s Entertainment’s success on eBay. Despite all the benefits of Web auctions, Howley and Carson worry that they could be selling the business’s soul to an on-line devil. Every item sold on eBay is removed from the hands of the customers they see every week, the ones who count on them to find great new stuff. “Our business is not a business that’s based on people’s just buying things for their own enjoyment,” Howley explains. “This is almost an obsession for some.”

The tenor of his collectibles stores is different from that of, say, your average retail-clothing store. “People don’t come in to buy comic books or toys and just leave. They talk about it with each other. It reinforces that they’re interested in an exciting hobby,” Howley says.

That’s also a huge part of the joy of working in the collectibles industry—the opportunity to hang out with customers who also love baseball cards, Green Lantern comic books, or vintage Atari video games. It’s those excited hobbyists that Carson worries he could alienate should the business go all the way on eBay.

Earlier this year Carson stumbled upon a box of Sunday funny papers from the 1930s and 1940s, including some old Flash Gordon comic strips. He eventually listed one of them on eBay, and it sold for $20 to a collector in Ohio. “But afterwards I realized that a customer here probably would have really liked to have had the chance to buy them,” Carson said. “So now I’ll run them by that customer first.” Carson plans to price the comics from $9 to $15 in the store—less than they could fetch on-line. “But we might get more value selling them to our store customers than we would by putting them on eBay,” he says.

That’s Entertainment has spent 20 years nurturing what is arguably its most valuable collection—its loyal customers, many of whom are friends who return week after week. Every Wednesday, when the new comics are released, a handful of employees unpack the boxes of comics and distribute reserved copies to the individual mailboxes of some 600 subscribers, customers who signed up for the free service. That’s presold merchandise. And while other comic book collectors may come in occasionally, most of those loyal readers show up every week to pick up their subscriptions, chat with fellow collectors, and take a gander at the rest of the merchandise. For Carson, those customers are the heart and soul of the business—not the anonymous bidders at the other end of a broadband connection.

And when you check out the numbers, he’s right. Unlike the band of repeat customers in the stores, on-line buyers rarely return to buy That’s Entertainment’s offerings. In fact, more than 90% of the company’s eBay customers are onetime buyers. “People search for the item, not the auctioneer,” Carson says.

The irony is that something about doing business on eBay, the celebrated paragon of on-line community building, violates the spirit of the community of collectors who gather in the brick, beam, and cement-floor store in Worcester. And it’s in face-to-face encounters that Howley and Carson find so much satisfaction. “Our store is like a party,” Howley says. “One of our favorite customers got married to somebody he met at the store, and they’ve been married for seven years.”

That’s just one of the reasons that Carson can’t figure out just what to do with eBay. At the end of 1999 the store’s original eBay full-timer left. That has given Carson time to reflect on just what this bold new on-line world will mean for the company’s future. What he knows for sure is that he wants to maintain the vitality and viability of the That’s Entertainment stores. “We’re trying to remain a destination,” he says, “a place where people still say things like ‘I came in today because I knew you’d be here.’”

Howley and Carson can honestly say they’ve faced the power of eBay, harnessed it, and survived—for now. That’s Entertainment will be around for its customers, both real world and virtual, for the next few years at least. Yet so much has changed, and it’s happened so quickly. Who knows how easy it will be to keep having fun in such a fast-changing world? That’s a question even Spider-Man can’t answer.

Well…that’s the end of our big-time national article in Inc. Magazine. We certainly appreciated that our friend Michael included us in this magazine! Things have changed quite a bit since this article was originally written. Although our involvement with eBay has decreased, our in-store business has increased, mostly due to the hard work and long-range planning of our quality employees.

We initially thought that most collectors would begin to sell their collectibles directly on eBay instead of selling them to us, but the collectors now realize that selling on eBay is not as easy as they thought it would be and there are significant costs associated with selling on-line. Serious collectors continue to enjoy the simplicity of selling their collections to us because we are eager and able to buy their entire collection and pay a respectable price for it!

Picture: Ken Carson as seen in the INC Magazine article.

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