Starting a Comic Book Store
We’ve all been there. While inside our favorite store, a business that you not only would love to spend your day’s working at as the owner, but you also know how to make the store better. You allow your mind to wander, taking the risk of leaving your comfortable, boring job to build a business of your own, appreciating the reward of every dollar you earn through your hard work. Most of the time, these dreams die as realty gets the better of you; your mortgage, bills, insurance, and family kills those dreams.
You loved comics as a kid and you got back into them now that you’re settled and have discretionary income. However, the closest store is a good drive away and you know that your town would welcome its own comic book store. You’ve now taken another step from dream to reality.
Then one day you become frustrated with your job, working hard to make someone else rich, and you decide to take the step of turning the dream into an actual discussion with your spouse, your family, and seriously begin figuring out if starting your own business can become reality. You examine the pros and cons – the late nights, the weekends, the time away from family, the financial burden of starting a business.
Finally, you made the decision; you’re going to go for it. You’re going to open your own comic book store. While it may seem relatively easy to begin, there’s a lot of work that goes into opening a store and a lot of information you’ll need to know prior to committing to opening the store. You can waste a lot of money going into it blindly. The purpose of this case study is to avoid wasting time and money on avoidable mistakes and determining the best use of your assets to allow your business to succeed.
Determine Your Capability of Being a Business Owner
Becoming a small business owner has many benefits. You don’t have to endure the embarrassing and discouraging process of applying and interviewing for jobs, only to be turned down and left feeling worthless. Or you’re in a steady job, but you have to deal with overbearing superiors, gossiping peers, and more work than you can handle all to make someone else rich, someone who took the chance to start their own business.
Owning a business of your own can be great. You can do things your own way, you only answer to yourself, and can choose your own hours. However, there’s many drawbacks that you’ll need to examine prior to committing to starting your business.
- How much money are you willing/able to invest into the business?
- Can you afford to go without a paycheck for up to a year?
- What amount of time are you willing to commit to the business on the average week?
- Are you willing to accept the risks of owning a business?
- Do you have the support you need to run your own business? What if you’re sick and can’t work?
These are the most important issues to consider when determining if it’s right for you to start your own business and they will be discussed more later in the case study. When asking yourself these questions, do not allow your excitement to overshadow your ability to answer these questions. For instance, truly determine if your bills can be paid for a year, which is the projected time before you begin to pay yourself. Do not think that it will all somehow come together, or this timeline is too conservative and you’ll make money sooner. If you are wrong, it will affect your ability to maintain your business long-term.
If you’re married, make sure all of these points are fully discussed with your spouse and that they are fully behind you. This process will be as hard on your spouse as it will you. They will be the ones picking up the slack at home while you’re working additional hours. They’ll be the ones sitting at home alone when you normally spent it together, discussing your days. They will be raising the kids alone while you’re only home to sleep.
If you’re single, you can avoid this hassle, but then the question is asked again – are you able to afford going without a paycheck for up to a year? Your spouse is typically who would support the household finances while your business grows. If you live with your parents, awesome, you don’t have to worry about any of these struggles.
You’ve gone through the checklist and you’re ready to begin the planning stage of your business. The first thing you’ll need to determine is the first item on your checklist, how much money you are willing/able to invest into the business, both with initial startup costs and how much you are willing/able to pay for the mandatory monthly expenses (rent, utilities, inventory, etc.)? A comic book store will likely cost between $30,000 – 40,000 in startup expenses. This can vary based on how much you want to put into the business. A really good location, with expensive store fixtures/décor with large inventory will cost more than a poor location, creating your own store fixtures, and low inventory.
Startup expenses will likely include the following:
- First and last month’s rent and possibly a security deposit – Not all landlords demand either or both last month’s rent and security deposit, but likely one will be needed, and sometimes can be negotiated
- Repairs and maintenance – Once you find you location, you may need to make changes that the landlord does not pay for, include painting, new flooring or carpeting, and any other structural changes. If you’re looking to make significant foundational changes, you’ll also need to pay for permits.
- Point of Sale (POS) system – You can always go with a cheap register, an inexpensive credit card machine, and do inventory, sales, and taxes by hand, but it may be wise to get a good POS. If you have the money, I recommend going with Diamond Comics (you’ll get to know them well) POS system called ComicSuite. It comes with everything you need and you can do all your ordering, pull lists, inventory and all sales and taxes on it. Plus, they include free comics with the purchase.
- Store fixtures and displays – You’ll need somewhere to display your inventory. This is where you can get creative. Look up different comic book stores displays and decide what you want to use. If you’re handy and creative, you can get used fixtures from resale stores and garage sales for minimal cost. Or, you can find businesses and websites that sell retail store fixtures.
- Inventory – This will likely be your biggest startup expense. We’ll discuss this more later, but you’ll need to decide what you want to carry and how much of it you want to carry. At minimum, you’ll need to have the new comic book releases for the week that you open, which will likely cost around $1,000.
- Security devices – Security camera and mirrors should be installed. You’ll have many kids in the store, kids without money, in a store filled with things they want and are often easy to pocket. Even if you use dummy cameras, this will help prevent theft.
You’ll also need to determine your monthly costs. This won’t be finalized until well after you find your location, but you’ll need to consider the following:
- Utilities – Gas, electric, water, phone, cable, and internet
- Employees salary – You will likely do most of the work yourself early on, but we’ll discuss later how to keep these costs low.
- Weekly inventory – As a comic book store, you will always have new weekly inventory. Depending on what else you carry, you may have other heavily cost inventory items.
- Marketing – You can do this for low cost if you’re marketing savvy or have someone who can help you with marketing support.
- Supplies – Price gun and stickers, bags and boards, comic boxes, receipt paper, cleaning supplies, business cards, etc.
- Security system – Not always necessary, but you may want to consider installing one to protect your investment.
- Business insurance
You’ll need to determine what types of items that you want to carry. Comic book stores rarely only carry comics anymore. They typically carry a wider array of products to meet the demand of the customers in your community. If you’re in a bigger city, you’re more likely to be able to get away with simply selling comics, but smaller towns will likely need other products to carry to succeed.
Comic book stores have become a front for gamers, both trading card game (TCG) gamers and board gamers. While comics do still sell, it’s difficult to sell only comics and pay your monthly bills. Comic book fans now have the outlet of the increasing number of TV shows and movies to replace their comic needs. Those who do read comics often purchase them digitally, find them on illegal sites for free, or wait until the comics come out on trade paperback and then buy the trade paperback on Amazon for a fraction of the cost. A good number of your comic book customers are speculators who are only looking for issues that have or will have value in the near future. Then you have your regular customers who will purchase comics consistently. Those are the customers who will be your source of consistent revenue and you will want to keep happy. While you want to keep all customers happy, your consistent comic book readers who pick up their pull lists weekly are who you can pencil in as guaranteed revenue each week.
The demographics of your comic book customer have changed over the years. Few customers under the age of 20 purchase comics; those who do are typically young kids whose parent buy them an age-appropriate comic. Your typical customer is in their 20’s and 30’s, with disposable income. It will likely take several months before you truly understand what comic book readers in your community are interested in purchasing. At first, you may want to get a little of everything, while loading up on comics that are making noise in the (comic) news or would appeal to speculators.
Determine how much you want to invest in back issues. A good selection of back issues draws customers into the store, but they take up a lot of space and can be difficult to move. If you are planning on being a store with a good assortment of back issues, you need to have a good selection available on day one. Comic fans will travel to check out a new comic book store and if you don’t have a good selection, they may dismiss you as a comic book store with a poor selection of back issues. You’ll be solicited by people off the street to buy their comics at least three to four times a week, which can be a good way of adding to your back issues, but if you’re sitting back and waiting to be sold to, it will hurt some long term business.
There’s different ways to build up your back issues inexpensively.
- Visit local comic cons and expos – They’re always loaded with vendors looking to sell quality comics for cheap.
- Craigslist and garage sales – These are more hit or miss as many others are looking to score big with the hopes of finding the old woman looking to clean out her attic with thousands of dollars in comics that she knows nothing about, but more than likely you’ll find others looking to sell their comics for more than they’re worth.
- eBay – Many sellers will sell blind boxes or long boxes for cheap. You can get a long box filled with Marvel and DC comics that you see before you buy for $100 with shipping included. This is a great way to add to your back issues.
- Your own collection – If you’re committed to making your comic book store successful, you’ll have to dig into your own collection. You can set aside a few issues that are irreplaceable to you, but you should use a good majority of your own.
Graphic novels are important to any comic book store. As mentioned earlier, Amazon will usually undercut your sales on graphic novels. However, customers still do buy graphic novels in store so it’s important to have a good selection. Diamond Comics will be your main distributor for graphic novels. As you grow, you can always develop a used graphic novel buyback program to sell used graphic novels at a cheaper cost.
When deciding what to buy to start off, stick with the basics. Only purchase trade paperbacks at first. Hardcovers don’t sell well. Only purchase hardcovers if it’s a really popular series and the trade paperback won’t be available for months out. Collection books should be gradually added, but don’t load up on too many at first. Customers love knowing they’re there and to look at them, but they really only sell well around Christmas as gifts.
Collectibles are essential to carry. There are three different types of collectibles you’ll want to carry:
- Impulse buy products – Items are typically small, affordable, and eye-catching and kept near the register. This includes keychains, small figures (mini-Funko Pops, HeroClix, Dice Masters, etc.), magnets, and buttons.
- Affordable collectibles – Funko Pops are the most common and most popular items to stock up on in this category. Also, Dorbz, Mystery Minis, action figures, and plushes are all fun collectibles that customers may add to their purchase.
- High-end collectibles – Character statues are expensive and aren’t sold too often, but collectors do seek these out and they do sell well around Christmas as gifts. Model kits and collection books should also be in stock.
Avoid selling graphic shirts, hats, and apparel. The price margins are terrible and prices themselves are higher than what customers are willing to pay. I made the mistake of loading up on apparel when I first opened. The average price margin for a shirt was 35%, not including shipping, and the average shirt was retail priced at over $20. Meanwhile, Wal-Mart sells decent graphic shirts for under $10. Hats had the same margins, with a retail cost of $30-40. Customers often looked, but rarely bought apparel. The few who were interested in paying the prices and found a shirt they liked, we didn’t carry the right size or it was the wrong gendered sizing. Between kid’s sizes, adult sizes, and sizes for both genders, you’d have to carry about 20 different sizes to meet each size per shirt style. After about six months, I ended up putting all shirts in a bin and selling them for $5 each, taking a large loss on them. However, even then they barely moved. I ultimately kept whatever fit me and donated the rest to make room in the store for other products. I ultimately took a large loss on shirts. Hats sold a little better, but the margins were still poor and everyone wanted fitted caps, not snapback caps. Fitted caps too come in many different sizes, and I would always offer to order the right size for customers, but they were never interested in waiting. Other apparel, such as socks, jewelry, gloves, winter hats, also didn’t sell. Jewelry always flew off the shelves, but it was almost never paid for.
Consider selling games in your store as well. Games don’t always sell easily, but they do draw people into the store to look at and add a diverse customer base into your store. The problems with carrying games is that they’re often expensive to purchase and there’s so many different games available that it’s difficult to know what customers are looking for. Often times I see customers looking at games in the store for ideas, then price check them with the same game on Amazon or other websites for better deals. At first, only get in a few popular games that you are sure will sell, and then increase it based on your customer demands. Wait until you become established in your store and then see what your customers are into before investing too heavily into other games.
The big decision you’ll need to make is if you want to also be a gaming store, and if so, how far do you want to go with it? As mentioned earlier, kids under 20 years old don’t often read comics. They’re main purchases are trading card games. Kids 12 and under are primarily into Pokémon cards. When dad comes in to look around or pick up his pull list and brings his kids, more times than not they’re picking up a pack of cards for their kids. Or kids will bring their allowance or birthday money into the store to load up on Pokémon cards. Whenever I was a vendor at a comic book show, I would always bring a few boxes of Pokemon cards and they would always sell out before it was over. Teenagers over the age of 12 were typically into Yu-Gi-Oh and ages 18 – mid ’20’s were heavily into Magic the Gathering. I do recommend carrying, at minimum, TCG booster packs. However, the best way to sell TCG cards is by hosting events, which is an entire other big decision you’ll have to make. Events typically are held nights and weekends, so if you plan on running the store by yourself for a while, understand that you’ll be working well into the night on game nights. You can always find volunteers to run the events for you, but will you be able to trust them with your store while you’re not there?
When looking for a location, decide ahead of time what you’re looking for and how much you want to spend. A downtown storefront will cost you more, but there’s better foot traffic. Being in strip mall may cost a little less, but there’s often less foot traffic. You may want to find a location within walking distance to schools, as most kids can’t drive or have access to your store very often. If you’re looking to host TCG events, you’ll want room for tables and chairs. Are you looking for an open space or multiple rooms? Having plenty of free parking available is important to drawing customers in.
Like with home buying, be selective, and do not commit to the first place you see before looking at other venues. Do not sign a lease until you are 100% certain that you are comfortable with the location and everything included in it. You may even want to have an attorney to look over the lease before you sign it. Fully understand everything in the lease, including:
- All monthly costs due – Including any utilities such as water or taxes
- All money due at signing – First month’s rent, last month’s rent, security deposits
- Length – When are you first allowed in the building and when does the term end?
- What penalties, if any, are incurred if you have to break the lease
- What cosmetic changes you can make to the building, if desired
If there is anything that you want or need from the landlord or the building that you are unsure of being allowed to do, make sure it’s clarified prior to signing. For instance, if you want a section of a wall removed, clarify it before signing.
Starting a Comic Book Store Part 2