How Come Five Below Gets Better Deals Than Comic Stores Through Diamond? A Retailer Asks…

Posted by Rich Johnston March 23, 2018

Five Below is a US chain of discount stores, numbering over 600 across the country, specialising in selling products below $5. Aimed at teens and pre-teens, it also contains adult products. Stores are typically located in strip malls and a large portion are located in college towns.

Items include trading cards, sports-related items, games, fashion accessories, bath and body related items, sweets, drinks, room decorations, school supplies and stationery, books, accessories for electronics, DVDs, computer software, novelty items and gag items, as well as seasonal items.

And, it seems, comic books. With four DC comics bagged for under $5.

And Dennis Barger, outspoken comic book retailer of Wonderworld Comics in Monroe, Michigan, has been popping into one or two. And discovering sales of comic books and comic book merchandise at price points he is unable to match. Everything here is under $5… leaving Dennis wondering why his store – or comic books through Diamond – can’t get similar deals. 2000-ish comic stores vs 600 5 Belows, how come they can get this kind of deal and Diamond stores can’t?

And writing an open letter, handily just before the Diamond Summit of comic book retailer in Chicago before C2E2. titled ‘Why Five Below is the comic book shop we all would have liked to have owned, and how our only distributor failed at helping us get there.’

I remember my first Retailers Summit, I was so full of hope an optimism. I remember asking naive questions like…

Why do the items I get from Diamond cost so much more than what Walmart sells them for?

Why do we get all the major manufacturers items 3-6 months after everyone else?

Why can’t you get us a T-shirt under $10 cost?

Why do we only get posters that are the covers of comics but every K-Mart has 20 new posters every month for 50-66% of what our posters cost? Why don’t we get posters from DC?

Sure I got good answers like…

Well. we (Diamond) are the number 5 or 6 buyer for all of these items and get filled after the rest

Well. the buying power of 2,000 comic shops isn’t powerful enough to get a good price from them.

Well. they make those themselves and license them directly from the publisher.

I got these answers over and over as I asked the same kind of questions again and again.

So where are we now?

Every store is choked full of non-returnable overpriced items that are going for roughly our cost on Amazon the largest global retailer. Well in a matter of months we will be losing Toys R Us, we’ve already lost most Kmarts, we lost Kaybees, Blockbuster and Borders in the last 13 years. Surely that has brought our survival buying power up a few notches, right?. I mean, if the huge losses in store numbers annually mean we still actually have 2000 stores, that is. You’ve lost millions to Borders, Hastings, Nerd Block trying to increase that reach beyond us locked-in retailers. Lord only knows how much TRU owes you for those Diamond Select exclusives. And in the process, these young hungry kids at 5 Below are making deals to get all 600 locations cheap geek related items better and less expensive than anything you’ve been able to offer us. On top of all this merch (again, all at $5 or below and still making enough profit to pay 12 per sq ft plus triple net) they get relevant amazing closeouts, why because they’re hustling, they care. As I visited 2 comic shops today mostly dead, as I hear meltdown is closing this week after 25 years and as I read that we’ve lost over 100 shops and know that we’ll probably lose 100-300 more over the next year. I have to wonder if diamonds current management has a grasp on it or are they just Kevin Bacon screaming all is calm, everyone relax.

I can’t help but wonder how hungry Diamond is for getting us what we need to survive. You can’t unscrew a pregnant lady, Walmart is where millions go for $5-$10 shirts, PJs, sneakers, toys, all superhero Blu-ray and DVDs there and Best Buy, Target and regionals like Meijers for Marvel Legends and Star Wars Black. $5 below, Spencer’s, Barnes and Nobles, BoxLunch, Hot Topics, FYE for Funkos, clothing, gear, posters, hats and everything else. DC’s dumping Gaylords full of trades and hardcovers to Ollies. All of these could have been us, we could have at least been one of the 600 “5 Belows”.

What do we have left to fight for Diamond?

DC is going to open a boutique in “your cities comic con”, most of the creators run a Kickstarter to bypass you and subsequently us.

Every Barnes And Nobles has a mini-comic shop right in the middle of their store.

What do we really have left to fight for, and are you ready to actually start fighting and stop giving us excuses???

A number of other retailers had their own take. Jesse James of Jesse James Comics in Glendale, Arizona writes,

I will always ask a LCS [local comic shop – Rich] one simple Question. “If you didn’t carry new issue rest of the year. could you stay open?” I for one can, We are working with a major company nationwide to get comics back into their stores (back issues) We have 5 projects that don’t deal with Diamond that will sustain our Brand for a long time. All along carrying new issues at the same time. With Diamond mentioned though in this conversation, I’m a HUGE supporter of the Geppi’s and don’t foresee that ever changing. I’m responsible for my Brand, I also have to look for ways NOT to rely on Wednesdays to be the saviour 52 weeks a year. WE need to find ways to feed off of these other companies, mentioned above, selling likeness items. I get you Dennis in the post, again I will always ask if we are to be successful, “If Not now, When?” I believe if you can concentrate on the Orphan customers around the world that have lost a store, We can be that Beacon.

George Chase of Hypno Comics of Ventura, California writes,

Diversification is the key. Like you, and Jesse James I have been moving on other revenue channels/opportunities that will make us more profitable and not relying wholly on Wednesday issues. I’ve discovered quite a few manufacturers that are happy to do business direct just in the last 30 days.

Brian Hibbs of Comix Experience of San Francisco, California, contrasted this, saying,

Maybe it is the cost of doing business in San Francisco (But probably not.. the store is 31, and it NEVER made sense, even when SF was cheap), but I’ve never been able to find a way to be Actually Profitable (like, I mean, “worth chasing”) on merchandise-y material. I don’t just mean from Diamond, either. Unless I can buy 1s profitably and use just-in-time ordering as my lever, I’ve never seen the expense of handling those goods as paying off until you hit a multiplier much much higher than I could ever manage without some sort of intervention.

I confess to scouring the creditor lists of Toys R Us for Diamond – they are unlisted which means they are below the $2.5 million mark. But they have been listed for Borders, Hastings, Nerd Block and more, companies that had terms of credit that seem far more generous than those given to comic book stores.

Could the balance be corrected?