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dmh_3000
01-14-2017, 12:44 AM
While 2016 may not have been great for everyone, I was able to get into a financially stable spot that will allow me to start up a new mini-series by a pro company. At least that's the goal. The problem I'm having is that I'm running the numbers on what I could possibly achieve with the level of quality I'm looking for and I'm nearly dead certain I've screwed up somewhere.

So here's my thought process: According to Jim Zub the creators usually only get 11% back (http://www.jimzub.com/the-reality-of-mainstream-creator-owned-comics/) (Yes I am aware he made an updated graph (http://www.jimzub.com/creator-owned-economics-the-changing-market/) saying it's 25%, but that's for higher sales that I'm not sure I'd get) which doesn't include advertising or publishing fees but since I'm not sure of those numbers yet, let's be optimistic and assume I get all 11%

Using that as a guideline, let's say you have a six issue series that sells an average of 10,000 copies per issue, so about 60,000 total. You'd make $239400 gross and actually get back $26334. Add onto that a 1000 print run trade collection, at $14.99 that would give you $14990 in sales and $1648.90 in profit. Totalled together, you're likely to see $27982.90

Now let's work out how much I can pay a team. Since it's only a few dollars off, I'll round up the profits to $28000. 132 pages plus 6 covers and the trade cover, we divide $28000 by 140 and come up with $200 per page. That's $200 to pay for pencils, inks, colours and letters. For simplicity, let's assume the publisher will provide an editor, the book's design, etc. and my only job is to get the art team paid.

So my question to everyone else is: where did I screw up? Am I expecting the sales to be too high? Did I screw up the numbers? Am I forgetting something important? Where did I go wrong?

NOTE: I am intentionally ignoring digital and con sales for the moment since I can't get find any digital sales reports and cons tend to be unpredictable. Also, I live in Australia and only have access to a few conventions compared to you American folks.

ayalpinkus
01-14-2017, 08:44 AM
Your calculation looks about right, but it is the best-case scenario. Selling 10,000 copies means each of the approximately 1,500 direct market stores needs to sell 7 copies on average.

So what's missing in your calculation is
1) what kind of initial investment is needed for all expenses? Not just artists, but also printing costs and such.
2) what are the odds of either best-case or worst-case scenario happening?

The worst case is of course that no copies are sold. In that case, you lose all the money that had to be invested up-front to pay for expenses: paying the artists and writers and editors and lawyers, printing costs, warehousing, public relations, marketing, sales, shipping, et cetera.

Someone has to put up the money up-front to pay for these expenses, and that person is going to want something for it in return. For that investor, you need to devise an investment proposal: Say he invests InitialAmount, and gets back BestCaseReturn in the best-case scenario and WorstCaseReturn in the worst-case scenario, and the odds of success are p, then his expected profit will be:

ExpectedProfit = BestCaseReturn*p + WorstCaseReturn*(1-p) - InitialAmount

And his rate of return will be ExpectedProfit/InitialAmount.

Even if you are the investor yourself - and I imagine this may be true, as you write " I was able to get into a financially stable spot" - you still need to consider whether this is a vanity project, or an honest to god investment. Because if it is the latter, you have to consider if there are better investment opportunities out there. There's a reason it is hard to find funding for comics projects.

As an example calculation, imagine the best-case rate of return you promise your investor is 20%, and suppose the odds of success are 80%, worst-case he loses everything. Indexing his initial investment to 100:

BestCaseReturn = 120
WorstCaseReturn = 0
p=80%
InitialAmount=100

then

ExpectedProfit = 120 * 80% - 100 = -4

Even with a 20% rate of return, and a 80% chance of succeeding, the investor putting up the money to pay for up-front investment loses money on the deal. 4%, on average. I believe that's a reason banks, publishers, or other deep pockets hesitate to invest in comics.

So this is what I think is missing from your calculation:

1) What is the total initial investment (not just the artists and writers) needed, upfront?
2) What are the odds of the project succeeding?

And then you need to work it out as an investment proposal, to raise money to pay for all expenses up-front - not just the costs of hiring artists and writers, but also printing and legal and shipping and marketing costs and such.

aaimiller
01-14-2017, 11:42 AM
I would add in a significant budget for advertising and marketing for each issue. Selling 10,000 seems unrealistic with a budget of $0 for marketing and most creator-owned publishers provide almost no marketing service. They provide editing, printing and coordinate with distributors, but advertising and marketing is left to the creators. Unless you hire a rock-star artist to sign on, with a well established fanbase, you will have a difficult time reaching the 10,000 per issue. Even if the comic is absolutely brilliant, you still need to get the word out.

Also there is generally a pretty significant drop in sales after the first issue of any monthly comic, sometimes as much as 50% for issue #2, which means you typically need to increase your marketing outreach, rather than decrease it.

You should budget enough to design and run a variety of ad's, table at all the conventions (an get the creative team to tag along), and produce some sweet swag if possible (everyone is into pin's at the moment)

Most of my direct experience is with indie publishers, but my understanding is that most creator-owned publishers operate in a similar fashion.

Bishop
01-14-2017, 11:55 AM
aaimiller beat me to it. To sell 10k copies you will need a significant advertising budget as well as spending a lot of time pushing the product on social media, etc.

ayalpinkus
01-15-2017, 03:30 AM
In his calculation, marketing was implicitly taken into account as being part of the 89% of cover price the artists weren't getting. He was assuming the publisher would take care of that, or at least that the marketing budget would come out of that other 89%, which is not unreasonable, I think?

Of the 100% cover price, 50% goes to the store, 10% to the distributor, leaving 40% for the publisher. This 40% is in up-front expenses though. 12.5% goes to printing the comics, in this calculation 11% goes to paying the artists up-front page rates, so that leaves 16.5% for marketing but also warehousing, shipping, legal and other expenses.

40% is equal to 102.000 dollars in his calculation. It's the amount that needs to be invested up-front. If he pays the artists the 28.000 out of his own pocket, he still needs to find a publisher willing to pay the remaining up-front investment amount, 74,000, required for printing, shipping, marketing, et cetera, costs incurred up-front.

Or he could try to come up with the total initial investment sum himself. In that case, he should consider that this may not be the best 100K investment opportunity out there, because of the odds of failing - and losing a large chunk of the initial investment - and the limited upside potential: the total profits if all copies are sold.

I think the calculation is about right. Marketing costs have been incorporated, I think, into that other 89%. The calculation just doesn't take into account the cost of potentially failing, and the resultant reluctance of a publisher to make the initial investment needed on their part, as he is assuming the publisher will, as he states "For simplicity, let's assume the publisher will provide an editor, the book's design, etc. and my only job is to get the art team paid."

The cost of potentially failing, and the effect of that on this project as an investment proposal to publishers, has not been incorporated into the calculation.

aaimiller's suggestion is a good one: hiring a rock star artist with a well-established fanbase could mitigate the risk of failing considerably.

Scribbly
01-15-2017, 02:41 PM
I think you are putting the cart in front of the horses with these maths.
First you need to get story and artwork done. Knowing what you get on hand start looking further. Regarding what you made maybe someone would like to sponsor the product or help on having it financed . IMHO.

Marta
01-15-2017, 02:44 PM
You mentioned a new mini-series with a pro company. What that company is (how big of a market it has, how established, how it sells books) will matter a lot. If you're relatively new and don't have a built-in market, you're very unlikely to sell anywhere near that number of copies. Your expectations of the selling price might be slightly optimistic, too. Sales of even 4,000 copies of a new mini-series can be unrealistic, and sales tend to drop off with each successive issue. Though digital would cost essentially nothing to distribute, print doesn't. I'm assuming the other 89% you're not getting would cover the printing costs. Does it also cover your expenditures to help sales along?

RoboTwin
01-24-2017, 01:40 PM
10,000 in sales is a tough nut to crack. Even major IP like Transformers and James Bond barely make it. Zub's Wayward was just below 5000 last month.

http://icv2.com/articles/markets/view/36511/top-300-comics-actual-december-2016

nams
01-25-2017, 06:09 AM
...Of the 100% cover price, 50% goes to the store...



I don't know how are thing today, but In 2007/2009 I was a small comics store owner and My margin was 35% sometimes 45%... just trying to add something to the conversation.

Scribbly
01-25-2017, 06:52 AM
10,000 in sales is a tough nut to crack. Even major IP like Transformers and James Bond barely make it. Zub's Wayward was just below 5000 last month.

http://icv2.com/articles/markets/view/36511/top-300-comics-actual-december-2016
I would like to use your posted chart to reflect this:
The production cost of making and printing a comic book is irrelevant compared with the content and authors working each book.
Having similar cost of production for 2 different comics books. Then , 1 book would sell 35,000 copies while the other book sells 3,500 copies.
The amount of printing copies is based in retail solicitations.
Example:
REBORN #3 from Image, 36,718 copies sold,or SURGEON from image, 4,234 copies sold.
As long each book can make it to the charts its all OK.
Also, any comic book that is not M or DC with superheroes should sell along time beyond charts. Point high and you'll match the middle. Point low and you'll match nothing.

ayalpinkus
01-25-2017, 07:49 AM
I don't know how are thing today, but In 2007/2009 I was a small comics store owner and My margin was 35% sometimes 45%... just trying to add something to the conversation.

Hi Nuno Sarabando,
that is quite a deviantArt page you have, your art looks really, really good!

About the 35%-45%, that's interesting, I didn't know that! Was that possibly due to shipping costs, the comics having to be shipped to Portugal? Or were these comics on consignment? Or where did that lost 5%-15% go?

Thanks for those factual numbers, I didn't know that.

Scribbly
01-25-2017, 12:00 PM
Hi Nuno Sarabando,
that is quite a deviantArt page you have, your art looks really, really good!

About the 35%-45%, that's interesting, I didn't know that! Was that possibly due to shipping costs, the comics having to be shipped to Portugal? Or were these comics on consignment? Or where did that lost 5%-15% go?

Thanks for those factual numbers, I didn't know that.
Mainstream comics are released and distributed all over the world. International distribution. Not just only local and for America as many people here would think. The same day or with few days difference. The distributor, Diamond, takes the same cut . The Previews books are sent to any comics store in the planet on regular schedule. The difference is the shipping cost to comic stores, in Brazil , Portugal, Australia or any other country. Is not the same shipping cost to New Jersey than Buenos Aires. Problem is, sales for overseas comics stores are not in the charts.
Charts count only for American sales.
Check on Diamond's website, store locator, how many comics stores are around the world. More than 50 countries buying comics. Australia only has more than 30 cities with almost one to five comics stores each!
Those sales sometimes can duplicate the whole sales in America. So, 4,000 copies sold in the States could mean you are selling another 3,000 overseas as well.

So, if you can make to the 300's chart, even in the last place, you are making business.
Only need to create something good enough to deserve be part of it.

nams
01-26-2017, 08:17 AM
I don’t want to derail the main issue of this tread because I am really enjoying reading everyone’s view about the subject but:

Well Like Scribby said… I worked with Diamond and it wasn’t on consignment, I paid for the comics with 35% discount whether they sold or not it is always a risk for the retailers. I know I could get better discounts if I purchased more merchandise. But Like I said I was a small comics store owner and I was on the bottom tier for discounts… I guess.

I never thought much of shipping costs because Diamond distributed their European comics trough England… and not from the USA. I always thought they had a printing house somewhere in Europe (since printing costs in eastern Europe are ridiculously cheap)… I don’t know why but at the time I had the impression that Diamond also controlled printing of comics… don’t know if that is true today or if it ever was I just got that idea from something I have heard or read in those days.

Most likely those costs came to account when Diamond gave me the prices to work with… so yeah 35% were also probably do to shipping costs but mostly because I was a small retailer.

PS: Thank you, ayalpinkus for your comment on my DA page.

RoboTwin
01-26-2017, 05:07 PM
nams,

If your store was in Portugal, was your inventory in Portuguese? Or how many different languages did you stock, and what was the approximate percentages of each? Did you sell more European titles than anything?

I ask because a publisher might have to solicit a different translation of the same book for each non-English-speaking country they target, which would add significant costs in translation and lettering and printing lower runs in alternate languages.

Anyway, I thought it might be great to export comics to China, if you could get past the censors and the old boy's club.

nams
01-28-2017, 09:52 PM
RoboTwin
The books I bought From Diamond where only in English. And the books I bought from them were 60 to 75 percent of the total amount of books I had in my store. Most where TPBs and hardcovers collecting comics however I had Standing orders of comics for some faithful costumers and bought the most popular comics from the major editors and some indies for the store hooping someone would pick them up( every time there was a Book from DW I bought copies to have in my store for example)… But I sold mostly TPBs, and Manga. Plus there was new books arriving from Diamond every two weeks.

I had other suppliers that were Portuguese some were translations of American Comics and some were translations of European Comics…But the editions were occasional, sometimes tere could be months without a new Book in Portuguese.

I think now that one of my major mistakes was not to import French/Belgium comics in the original French language …older costumer preferred to buy European/French comics... people with 25 to 35 preferred American Comics mostly in English, because they already had most of their collection in English and they preferred to read in the original language( plus when a translation in Portuguese of an American Comic was published it was with a delay of two to four years so they probably already had the book in English). Young people( 15 to 25 years) preferred Manga and very young people( less than 15 years) preferred American Comics translated in Portuguese.

That being said the costumers with more money 25 and older were the ones that bought the most… so it is hard to say If I sold more European Comics or American Comics, but most probably American comics.

I thing Exporting to China you would have a great cultural difference and above all an enormous difficulty with the language… unless your comics goes translated to mandarin ( and I thing that there are more than one dialect depending on the region of the country) there are very few chances anyone can read it in English.