Shop Owners: How much $$ to start up??

[precodekeith]

I was daydreaming, as usual, about opening a brick&mortar comic shop. I bet we all have occasionally. Surely there are current &/or former shop owners on the boards here. (I can think of one right off the top of my head)

 

So here's my question for you current/former shop owners: how much jack would you SUGGEST one have as starting capital for opening a shop? I'm sure it would vary be geographics, size, and any number of factor, but as a basic ballpark figure what would be a good starting point. Let's say the potential owner already has a meager back issue supply of about 15 long boxes, mostly 80's, but a sprinkling from every age.

[drsone]

I was daydreaming, as usual, about opening a brick&mortar comic shop. I bet we all have occasionally. Surely there are current &/or former shop owners on the boards here. (I can think of one right off the top of my head)

 

So here's my question for you current/former shop owners: how much jack would you SUGGEST one have as starting capital for opening a shop? I'm sure it would vary be geographics, size, and any number of factor, but as a basic ballpark figure what would be a good starting point. Let's say the potential owner already has a meager back issue supply of about 15 long boxes, mostly 80's, but a sprinkling from every age.

 

I'm not an expert, but having a deeper back issue selection wouldn't hurt.

 

Also, you'd have to be prepared to suffer losses your first few years, due to ordering a wide selection of current books every week, you can't count on subscribers, they're pretty fickle in my experience.

 

TPB's seem to sell quite well now if you have them in stock, I've noticed at my LCS that are willing to pay full price on tpbs but only if they're in stock.

[shrunkenhead]

15 longboxes doesn't sound like very much for a whole store... My LCS just bought a new collection last week that was over 15 longboxes worth. I would think you'd need at least 5 or 6 times the size of your current inventory (and sellable stuff, naturally) before ya start thinking about paying rent.

 

But I've never owned a store, so I admit I'm no authority.

[DawgPhan]

I think that ole Chuckie lays it out real simple like in one of his database tales..seems like a good place to start. you might not like him but he is the most successful comic shop owner in history.

 

Oh my advice would be to sell comics to people in your store with cash in their hand. Dont wait to sell a book to someone else that way or may not ever come in just because you think you can get a little more. Buy comics for a nickel and sale them for a dime. Turn your inventory over ever few months. I am far more likely to keep coming back if everytime I come in you have something new..

[swordsandrockets]

Part of it would depend on how diversified you planned to get. The more product lines you carry (comics, games, toys, DVD's, manga, etc) you carry, the better chance you have of developing a store with a prospect of providing a living wage for you. If you are looking at just a comic store with only limited amounts of non comic product, I would still take a wild guess at over $100,000 to make sure that you have enough to cover bills, inventory, store set up/fixtures and paying yourself a little bit to live on for the first year or so.

[ComicSupply]

Operating Costs:

What you should focus on is a 2 year plan. Figure out how much your bills are going to be like Rent, Taxes, Insurance, Phones, Internet Access per month. Times that by 24 months and you should have that much in the bank plus 10% as a cushion.

 

Store Inventory:

Depending on the focus of your store this could be very easy or very difficult. If you are going to have one of those shops that has everything from Backissues to Statues this might be hard. It is very hard to determine what you will need, or what your customers will want. The comic stores that buy the most supplies from me have a $3-5k weekly comic bill.

 

Your best case scenario would be to buy a shop with a lot of inventory that is going out of business.

 

If you intend to focus mainly on comics, you probably will require about 30-50 long boxes and MUST have a good selection of Silver/Bronze age. The majority of collectors will go to check out a new store at least once. If they aren't impressed with the selection or pricing they will most likely not return. You also will need to consider how you will continue to get new collections in, and what the costs of that are going to be. Always keep in mind that you will be spending money to spend money through advertising costs.

[drsone]

Operating Costs:

What you should focus on is a 2 year plan. Figure out how much your bills are going to be like Rent, Taxes, Insurance, Phones, Internet Access per month. Times that by 24 months and you should have that much in the bank plus 10% as a cushion.

 

Store Inventory:

Depending on the focus of your store this could be very easy or very difficult. If you are going to have one of those shops that has everything from Backissues to Statues this might be hard. It is very hard to determine what you will need, or what your customers will want. The comic stores that buy the most supplies from me have a $3-5k weekly comic bill.

 

Your best case scenario would be to buy a shop with a lot of inventory that is going out of business.

 

If you intend to focus mainly on comics, you probably will require about 30-50 long boxes and MUST have a good selection of Silver/Bronze age. The majority of collectors will go to check out a new store at least once. If they aren't impressed with the selection or pricing they will most likely not return. You also will need to consider how you will continue to get new collections in, and what the costs of that are going to be. Always keep in mind that you will be spending money to spend money through advertising costs.

 

Great advice, I was always more impressed with a store if they had a deep back issue selection over manga/statues/etc.

 

Please don't invest in manga/anime if you open a store. A comic shop that had been in business for 20+ years in Tampa did that and was done 4 years afterwards.

[ComicSupply]

Another thing I should mention is to pay close attention to profit margins. If you stick mainly to comics you don't have to sell as many of them to make the same $50 profit that you do on a $100 statue.

[drsone]

Another thing I should mention is to pay close attention to profit margins. If you stick mainly to comics you don't have to sell as many of them to make the same $50 profit that you do on a $100 statue.

 

This is where back issues can be your bread and butter if you have a large selection and are willing to make small deals.

 

I'm only speaking from observation here, please correct if I'm wrong if you're in the know, but getting and keeping a steady supply of new issue subscribers and a loyal back issue base who knows you have a decent selection and fair pricing seems like a winning plan to me. Most comic shops I've been to seem to cater to one of the other near exclusively.

[Scrooge]

Shadrock posted this in Late 2003:

 

"Here's a couple of quick figures for your consideration-The average store buys 2,465 comics a month. These copies have a cover price of $7,140.

the average comic cost$2.90,and the average best selling comic sells for $2.81 cents. If you sell 90% of your books each month, yu will have 246 left at an average cost of $2.85. Multiply those two, ten subtract that from the cost of your books. You would have $7,140-cost of books(your discount,maybe 40%),-(246x2.85),-rent,advertising,staff,insurance=profit

Now understand that you'd be ordering blind for around two months since you need to order ahead of time so you might not come clse to a 90% sell thru for a few months.

 

You need to buy fixtures,signs, a register,pay rent and maybe a real estate commision. Lets budget 10gs,and thats low

You need a decent stock of tradepaperbacks,graphic novels,comic bags,comic boxes,a few action figures and t-shirts and such.Three copies of each of the top fifty trade papebacks will set you back $1500 to $2000,a couple of Gs for supplies,a grand for the rest- lets say 4,000

 

So for two months comics and supplies you need to lay out almost $25,000 without rent,and advertising.We have not even mentioned any expenses for sports cards,role playing cards,gaming.You are not going to work 7 days a week so you need some staff. You need an alarm system.You need a computer system.

I'd be prepared to drop at least $50,000 into a new store in the first two months and you'd still have no client base,nor a clear plan. "

 

and Lighthouse edited a reply that went as:

 

"Also how prevalent is new issue discounting? Wars between stores with discounting is the reason I sold out

 

New issue discounting at the 10% level is very common, just as you will find membership discounts available for everything from bookstores to yogurt shops. The heavier discounting isn't as prevalent as it once was... thank goodness...

 

Is there such a thing (as a comic book store) anymore?

 

Perhaps not as you imagine them. But if your typical pop culture retailer, with his games and t-shirts and toys and statues and anime DVDs and trading cards and gatchaman machines, were to stop selling comics his business would fold quite quickly. You could easily take away any of those other product lines and the store would stay open.

 

Your typical gas station carries thousands of products and makes nearly all of its profits from things other than gas. Yet we call it a gas station anyway...

 

Local comicshops here average 20% new comics, 10% manga/dvd/video, 20% sportscards/sports collectibles, 20% bisques, action figures, 20% non-sports (Yu-gi-oh) cards, 10% back issue comics/mags.

 

Man, I knew I was missing the boat by not selling soup...

 

I don't think that whole CD/Videos genre mixes in well like some shops try. I'd just stick with toys, cards, comics, books, etc etc.

 

The advantage of selling CD's and DVD's is that it is another reason for customers to come in on a regular basis. You want to be a part of their daily lives, not something they have to remember to do. The huge disadvantage is that the more your store resembles a Borders, the harder it is to compete with them. You can carry the same product lines, but your SKU mix better be different or they will kill you on price...

 

It looks like the shops that sell both sports cards AND comics do well. Obviously the downfall there would be you'd have to have a knowledge of both..

 

And that's the single biggest barrier to entry in this market. The supplier contracts, lease availability, labor regulations and capital requirements are all easily met. The governmental red tape is almost non-existent and there are no exclusivity agreements to get around. But the specialized knowledge requirements are much higher than for someone opening a convenience store. If you get into variations of grade, I have more SKUs than a Wal-Mart in less than 1/20th the footage...

 

Depending on the size of building you're looking at, I'd guestimate you'll need like 50,000 for inventory purposes starting out?

 

That's actually a pretty good estimate. Stores have certainly opened on less inventory and done well, but that's a good ballpark. A rough guess would be $35K dropped on inventory before the opening, with another $15K held back to fill the holes over the first 8 months. There will be items that your customers will force you to carry, and you won't know all of those until you have been open a while.

 

I looked into ordering direct from a few of the toy companies but the markups seem weak especially when only a few rare or variant figures sell then you have to dump the commons. I doubt I'd go too deep into that.

 

There is no money to be made in toys. There just isn't. But you probably have to sell them anyway. Every major release toy will be available at Wal-Mart and Toys R Us and KayBee for about 5% more than your cost from your supplier. So you won't have a margin to play with. But they DO generate traffic, and the guy who buys 2 toys a month from you may have friends who will hear about your store and come buy things that add to your bottom line.

 

What kind of discounts do most shops give these days?

 

This is very regional, and it's probably best to scout your local competition (which you should do anyway).

 

One of the things that I did before I opened my first store that has served me well is this. I went to about 40 comic shops and made a list of every single thing I didn't like about them. I then tried to avoid doing as many of those things as I could. I knew full well I was going to make other mistakes. But why make the same ones I already knew?

 

I'd suggest "trending" the gaming group by offering the hot items for sale.

 

This comes back to listening to your customers. Ask them what they want. Listen to what they say. Funny how simple that sounds and how many businesses of all kinds ignore it...

 

I really like the idea of having a membership based program where you receive discounts on back issues based upon tenure of membership and amount of purchases. Not only rewards long-term customers, but also keeps people coming back.

 

A very common and very successful practice. In addition, the simple fact that you are tracking purchases means you are paying more attention to what your customers are buying. One caveat... Decide how your "rewards" system will be handled VERY early and make sure it is something you can live with forever. Customers have long memories about the things they are promised...

 

What's really important is your Diamond discount. For that, you're better off buying an existing store with a Diamond discount instead of starting a new account.

 

This actually depends on your personal credit rating. If it is exceptional, you should absolutely avoid buying an existing entity. Diamond starts all new accounts on COD Certified for six months. You'll be paying for your inventory in advance, and getting an extra $6 in freight charges every week in COD fees from UPS. But after that six months, they will adjust your credit terms based on your business' performance AND your own credit rating. If you have excellent credit, you can jump straight to Net 14 terms after the six months has gone by, and eventually get Net 21. It's a wonderful thing to be able to sell merchandise you haven't paid for yet and not have to scramble for cash when a big order of merchandise comes in.

 

If you can buy a shop with Net 14 already, fine. But don't buy a dog til you know if it has fleas...

 

The average store buys 2,465 comics a month. These copies have a cover price of $7,140.

 

Now understand that you'd be ordering blind for around two months since you need to order ahead of time so you might not come clse to a 90% sell thru for a few months.

 

Clearly you will not make your first two orders at that level. And you can expect to have a sell-through around 40% the first three months unless you have done a LOT of advertising. Your initial orders will be much smaller, just getting the shelves to look full, and then adjusting your orders upwards as customers arrive. The first few months you are very reactive, and have to make a lot of reorders to match your customers wants, but that transition settles down after a while...

 

f you are serious, here are two people to contact

Mel Thompson at www.comtrac.net

Bruce Costa at brucecosta@compuserve.com

They both run excellant consulting firms and are worth their fees.

 

I don't know how much their fees are running these days, so I can't speak to that. But I do know that the most likely reason your shop would fail is inadequate preparation. It is absolutely worth the time to do your research beforehand. If you haven't run a retail store before, I would suggest picking up four or five books on retailing first, and THEN learn the specifics that you will need for comic shop retailing. On the shelf above my Overstreets, I have forty-three books on retailing, small business marketing, and store design. I will be happy to recommend some titles. Just as it's better to study Calculus 101 before you take a class on LaPlace Transforms, you will be well served to have some good general retailing background before you spend a lot of time learning why comic shops are different... Learning all the exceptions before you learn the rules is not such a good idea...

 

After you have spent some time on Retailing 101, you would certainly be wise to seek out assistance...

 

The guy that sells the toys and such along with his comics has a MASSIVE back room, with floor to ceiling shelves of books, probably a couple hundred thousand.... But, the problem with him is that he's so disorganized that half the books don't even have prices on them, and I don't feel like asking him what they cost, and then haggling with him over it.

 

This is one of the easiest traps to fall in to as a comic retailer. But it's almost inevitable unless you are willing to charge high prices on your books... To do even a cursory grading of a book and slap a price sticker on it takes 15 seconds. That's an hour per long box. If he has a couple hundred thousand books, that's someone working forty hours a week for SIX months just to get them priced. That assumes they are already bagged (and boarded) and sorted. If theye aren't you are looking at four to six months to get them prepped, plus six months to price.

 

Given that about 1/3rd of the books will need to be repriced the following year (figure 2/3 of them have no real change) you're looking at someone working full-time for about three months the next year (and every year after that) to go back through them, find the ones that need new prices and price them...

 

Figure that a typical employee costs around $9 an hour including payroll taxes, and you're talking about a $9,000 investment to get those books priced if they are already prepped, or a $13,000 investment to get them prepped and price.

 

Your shop owner has to have a lot of confidence in how well those books will sell to justify pricing them... Most retailers will look at $13K in their hands and decide they can turn that money four times over by buying new inventory, rather than commit it to a six to nine month project..."

 

It's all in this thread: Good time to open a comic store?

[Scrooge]

LightHouse again from another thread: Buying a Comic Store

 

"I certainly don't know every successful comic shop owner in the country, but I know plenty of them. And the first thing that came to mind when I read your post is that I don't know a single one who bought a comic shop outright that didn't fit one of these two categories:

 

1) They bought a shop that was a direct competitor in order to increase their local market share.

 

2) They bought a shop they were already connected with for some time (such as an employee buying the store they worked in from the previous owner).

 

Plenty of successful store owners have bought out competitors for market share. And I know of several great stores run by people who bought out the owner of a store they were working in. But the idea of someone buying a shop they were not connected with as their first store? I don't know of a single example I could point to and say it has worked in the past.

 

Buying someone else's store really only makes sense if you are adding it to your own chain (and removing the competition in the process), or the store was already "yours" as far as the customers were concerned.

 

It is possible for that situation to work out for someone. But I honestly can't imagine a situation where it would work out better than just opening a shop on your own. The kind of person who is likely to succeed with buying someone else's store is probably just as likely to succeed with opening a store cold, and going it alone is the safer choice.

 

That said...

 

On the question of valuation...

 

Unless you are dealing with someone you would trust with a bag of uncounted money, assume that the comic inventory is worth 2.5 cents per book for all books priced under $20, and between 5-15% of sticker for books priced over $20. Value the fixtures at around $1 per pound if made of glass (such as display showcases) and 25 cents per pound if made of wood or metal. Doesn't really matter if you are talking about tables or counters or coloring book racks, that rule of thumb is about right. Figure light-up signage at $25 a square foot if you plan to keep it (worthless if it is name specific and you plan to change the name).

 

It's very easy for a prospective seller to fudge their cash flow records, as you would expect. A simple way to see through that is to look at their last 6 months of orders from their distributors (Diamond, Bulldog, GW, UD, WOC, etc...) The store has sales to support that level of ordering and you can backtrack from those numbers to get legitimate sales expectations. Yes, a collectibles shop also buys off the street (and probably under the table), but those patterns will change with your new ownership so I wouldn't include them at all.

 

Hardest thing to value is the customer base. We found out last week that a cable subscriber was "worth" $4400, not bad for someone likely spending around $60 a month on product. Cable subscribers are more stable than comic subscribers of course. But I think you can legitimately value the active subscriber list at a typical comic shop at around $250 each, assuming you are taking over the existing location and don't plan huge changes to the product lines offered.

 

If you are taking over the existing business's distributor accounts, there may be value to the credit terms. Net 7 Terms from Diamond are probably worth around $2K. Net 14 Terms around $5K. And Net 21 Terms around $10K. If your own FICO score is 800+ there will only be value to you for the first six months, since Diamond's typical policy is to start new accounts at Check COD and give an initial credit review at 6 months for an upgrade in terms.

 

It is highly unlikely that there will be any value to a comic shop's lease. Very few shops have leases long enough for a premium to emerge. When you are renegotiating every 3 years, you're paying FMV every time.

 

 

Quote:

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What kind of profit margins are typical for a comic book store that does annual gross sales in the range of $200,000? What do sole-proprietor shops pull in versus those managed by W-2 employees?

 

 

--------------------------------------------------------------------------------

 

 

 

There isn't any difference between what a sole-proprietor shop pulls in versus one managed by W-2 employees. What you have to remember is that if you plan to work in the shop you own, you have two revenue streams from that shop. One is your distribution of the profits, the other is your salary for working there. If your expertise justifies a $50K a year salary, your store will pull in the same sales as if you hired someone who justifies a $50K a year salary... Too many people who go into business for themselves forget that there is a substantial opportunity cost in running a business, and you can only legitimately define your business's profits if you are being paid the salary commensurate with your own performance.

 

If you are looking at buying a shop as an investment with the idea that someone else will run it for you, don't. You would almost certainly do your portfolio better by calling Monex and buying gold...

 

If you are looking at buying a shop as a career change with the idea of running it yourself, you would nearly always be better off just opening a store on your own. There IS one exception I can think of... If you really wanted to own a shop in a particular town of say 50,000-75,000 people, and there is one and only one shop in that town, it might make sense to buy out the existing store (with an ironclad non-compete agreement of course) rather than opening a competitor. But with that exception, you would nearly always be better just opening one on your own...

 

As for whether it makes sense for you to buy a store, no one knows that but you. There is a lot to be said for following a dream, and there is a lot to be said for doing what you truly love. But before embarking on a career as a comic shop owner, I would suggest going out and buying 8-10 books on retailing and read them all. As odd as it may sound, Retailing for Dummies is a good place to start, especially since much of the book tries to talk you out of doing it in the first place. Anyone who can be talked out of opening a retail store didn't belong opening one in the first place... There are currently 35 books on retailing and store design on my shelf, and I still buy new ones about every other month... Comic Shop Retail is more about Retail than it is about Comics, and shop owners that don't recognize there go out of business very quickly..."

[FlyingDonut]

Lighthouse and BassGMan from another thread I Miss Lighthouse

 

In a properly run store there is no such thing as a bill for new comic inventory... Your sell-through should always be high enough that you are happy to see another shipment from Diamond. And once you have been open for a year or so and have net 7 or net 14 payment terms, those books are sold before you pay for them anyway. Diligence is required in ensuring that money stays there until the check is cashed, but your customers should always be paying that bill no matter how high it is...

 

Rent and electricity sure... but those shouldn't cause you any more concern than your home electric bill or mortgage payment. If you live your life so that your personal housing payments are a strain, you shouldn't even consider having a business of your own. It's the same with store rent. Coming up with 5-10% of your sales count to pay rent shouldn't even be an issue...

 

Employees are far more of an issue, since you often don't know what you are getting until you have already sunk a fair amount of cash into them. Comic shops aren't subject to most of the laws that apply to larger firms, but it's still a pain to fire someone. That's why it makes sense to devote more effort than you would normally expect to your hiring process... to increase your chances of finding good ones...

 

Advertising is really the wild card. The successful stores all advertise more than average. But there are plenty of shops that advertise like crazy expecting it's a silver bullet and run themselves out of cash. Just as many assume they can wink in the dark, and they go back to day jobs with regularity.

 

In my own case, the vast majority of my inventory is only saleable in a brick and mortar environment. It's not as though I have $300K worth of Hulk 181s in varying grades that I can just dump any time I want. A thousand long boxes of bagged and boarded, sorted and priced comics have tremendous value as comic shop inventory and almost no value on eBay...

 

Besides... strippers love the idea of telling their parents that they work in a comic shop... I doubt they would be too excited about telling mom they work in some skeevy middle-aged guy's garage...

[Elvis]

Uhhhhhh...

 

So if i am reading the above correctly, it will cost $450k to open a comic store and you can expect to lose at least $50k a month in perpituity?

 

Just kidding.

[FFB]

Part of it would depend on how diversified you planned to get. The more product lines you carry (comics, games, toys, DVD's, manga, etc) you carry, the better chance you have of developing a store with a prospect of providing a living wage for you. If you are looking at just a comic store with only limited amounts of non comic product, I would still take a wild guess at over $100,000 to make sure that you have enough to cover bills, inventory, store set up/fixtures and paying yourself a little bit to live on for the first year or so.

 

During his interview on ComicZone, Steve Stryke made a very compelling argument AGAINST diversifying in this manner if you own a comic store. The upfront cost associated with selling statues, toys, DVD, etc. are far higher than buying back issues for cheap and selling them at 2-3X what you paid for them (or more). The profit margins on toys and stuff are not that high and you typically have to pay a lot of upfront cost just to stock the store with them.

[HouseofComics.Com]

During his interview on ComicZone, Steve Stryke made a very compelling argument AGAINST diversifying in this manner if you own a comic store. The upfront cost associated with selling statues, toys, DVD, etc. are far higher than buying back issues for cheap and selling them at 2-3X what you paid for them (or more). The profit margins on toys and stuff are not that high and you typically have to pay a lot of upfront cost just to stock the store with them.

 

And yet a lot of smart store owners are getting out of back issues because they just don't pull their weight anymore as that market has mostly shifted to the internet.

 

Dan at HiJinx Comics in San Jose is a smart guy and totally on top of everything. Yet he sold us his entire backstock because he can make more money using that space for something else. A comic store owner in Santa Cruz told me, "This just isn't a back issue town." He had sold his entire stock to Heroes a month before I found him.

 

When I saw how weak the back issue selection had gotten at most comic book stores I knew there was a place for HOC in the (online) marketplace. Okay, the other key factor was seeing how much we could easily undercut MH and LS price-wise.

 

Marc

[FFB]

During his interview on ComicZone, Steve Stryke made a very compelling argument AGAINST diversifying in this manner if you own a comic store. The upfront cost associated with selling statues, toys, DVD, etc. are far higher than buying back issues for cheap and selling them at 2-3X what you paid for them (or more). The profit margins on toys and stuff are not that high and you typically have to pay a lot of upfront cost just to stock the store with them.

 

And yet a lot of smart store owners are getting out of back issues because they just don't pull their weight anymore as that market has mostly shifted to the internet.

 

Dan at HiJinx Comics in San Jose is a smart guy and totally on top of everything. Yet he sold us his entire backstock because he can make more money using that space for something else. A comic store owner in Santa Cruz told me, "This just isn't a back issue town." He had sold his entire stock to Heroes a month before I found him.

 

When I saw how weak the back issue selection had gotten at most comic book stores I knew there was a place for HOC in the (online) marketplace. Okay, the other key factor was seeing how much we could easily undercut MH and LS price-wise.

 

Marc

 

Take a look at Phil's model at Comic Collector Shop though. He doesn't stock all of the toy/DVD/etc. stuff. His primary focuses are back issues and new issues and he seems to do well with that. Heroes in Campbell is another example. Brian's Books in Santa Clara is another.

 

I can see how Santa Cruz would not be a good back issue market. Most of the people there are either cash-poor college students, cash-poor surfers, and wealthy retirees who don't collect comics. Mountain View, Santa Clara, and the rest of the peninsula is another story though, as you have quite a few relatively young professionals with a lot of disposable income and a hankering for the comics from their youths.

[uclapeterg]

I talked to Phil on the phone once, asking him questions about a FF55 he was selling. Very professional and upfront!

 

Why doesn't LA have as many good comic shops as the bay area?

[Moondog]

A 1,000 square foot store in a good location in suburban Chicago...Starting with a vanilla box (taped and sanded walls, drop ceiling, concrete floor)...Mix of 90% new material (comics, GN's, toys, other licensec goods, etc) and 10% back issues...

 

Nothing less than $150,000.

 

Move into an existing space you can save $25,000.

 

Please note, that this is not a &^%$ hole store in an out-of-the-way location.

 

As for the 90/10 mix of merchandise...even in my "collector's" store when I had a chain of 6 - that was the best I could manage. I wanted back issues to be a larger percentage (because of margins), but the reality is that back issues sell slow in stores.

 

I've been asked a million times if I'm thinking about going back into comics retailing and the answer is always an emphatic NO! The margins are poor and the competition by discounters and the Internet is just too brutal.

[ComicSupply]

This might just be me, but ComicSupply.com opened in

 

Jun 2004 with a monthly sales of $253

 

I focused on only Comics and supplies and a year later in

 

Jun 2005 monthly sales were $16831

 

Now, the hardest part is simply sticking to comics and supplies. I personally feel that you can make a go at it with just sticking to a few things and doing them well. One can be good at a lot of things or great at a few things.

 

If someone out there is really trying to open a shop, start small, and build large on those things that work.

[lighthouse]

Wow... I don't even have to post in a thread and my words just magically appear...

 

Strangely enough, I didn't see a post where I answered the question you are asking though...

 

Assuming (and this is a VERY big assumption) that you do not need to take home a salary from your shop the first six months:

 

A very easy ballpark is that you need a grand total of 20 months rent at whatever location you are looking at. If you are in suburban America, and plan to open a 1200sf shop with a monthly rent of $1500, you can get your shop up and running for around $30K. That will be enough to pay your initial costs, buy a starting level of inventory, pick up reasonable fixtures appropriate to the market, cover your first year of advertising, and leave about six months rent in reserve.

 

If you are in a more expensive market, you obviously need more money, but 20 months rent is still about right. Your initial inventory stock won't be that much bigger, but your other costs for insurance, security, and the like are much higher. If you plan to have a 2200sf store with a monthly rent of $4800, you probably need around $100K to start...

 

It is a HUGE mistake to buy back issue inventory prior to opening a store. HUGE mistake. You will never ever get inventory as cheaply before you open as you will after you open. You need enough back issues in the store so that people will be willing to sell you collections and that's it. No more. Have a few books over $100 on the wall, a smattering of $20-50 books on the wall, and some boxes of assorted (and sorted) stuff. Your initial back issue inventory can be an absolutely pile of steaming dog doodoo and it doesn't matter. People will show up to sell you stuff cheap. Buy their stuff and sell it to someone else. Even if you have to put books from your own collection on the wall at high prices with little intention of selling them, that's fine. A presence is all you need. People will come.

 

What you DO have to purchase before you open is trade paperbacks. Customers will not be bringing those to you very often, so you will be getting them from Diamond, Bulldog, or Cold Cut. Diamond offers a program for the very first order you place with them called "Stock to the Max". Whatever the size of your first months order, they let you order a dollar amount equal to that at the maximum allowed discount of trade paperbacks. You will get a better discount than Mile High does, but only on that one time order. Plan ahead. Make it count. Shallow and wide here, shallow and wide. There aren't five TPBs I would have more than 2 copies of when you open your doors. For most of them it's strictly one to show and one to go. And many titles it's just one copy period and you'll wait a couple weeks to get the replacement copy in.

 

Your initial order of new comics goes the same way. Order 1-3 copies of every single title from the big 4, plus any other title that gets discussed in the Modern Comics threads here. If Borock and Chrisco and those guys are buying it, you should have 1-2 copies on your racks. Your first 2-3 months of orders won't sell. Live with that. But you need to have about 150 titles on display on your new book racks or people won't take you seriously. After that just add orders as you get subscribers, and use cycle count sheets (or any comparable method) from day 1. Those records are invaluable.

 

If you need the store to pay your household bills the first six months (and presumably after that as well), then I would add a year of your household expenses to the amount you need before you start the store. So if your monthly outlays are $4K, add about $50K to what you need... And frankly, you probably can't make a living in a store where your monthly outlays are more than twice your rent. At least not the first 2 years or so. Expecting a shop with a $900 rent to provide you enough income to pay your $5K a month in bills just doesn't work. These things really are tied together. Yes, the internet can skew the numbers and a store in an area with great buying can probably get a multiple of 3-4 times rent for the owner. But for the most part, if you are trying to take home an income of $4K a month, you need a shop with a rent of at least $2K (with the requisite inventory, advertising and fixtures). If you need an income of $8K a month, you need that much bigger of a store.

 

And that's not to say that simply opening a store with a $3K rent bill will net you a $6K a month income. More likely you will see and income of $2K-$3K for a while. But don't expect it to ever grow past double rent...