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Online Auctions

By Oliver Chin     -

Reprinted with permission by the author



Oliver Chin

Comics Retailer



Online Auctions - Part One



One of my few regrets as a comics publisher was not diving into the booming sector of online auctions. Eager to test the waters, I did start some marketing (selling Pokémon comics signed by artist Toshihiro Ono for charity) but unfortunately did not wade in deeply to move old products that were gathering dust in inventory.



Nevertheless, I still wanted to explore how the comics community could benefit from web exchanges. Surprisingly, my investigation confirmed that certain parties already have made substantial progress in this field, which should encourage the rest of you to take the plunge.



Growth is Good



Auction sites abound. From Auctionwatch and Bidder's Edge to Yahoo itself. Of these, eBay continues to be synonymous with the growing movement. Their public relations manager, Kevin Pursglove, confirmed that all measured activity has doubled in the past year. The second quarter of 2000 rung in 15.8 million registered users who were selling 54 million items (5 million per day) for gross merchandise sales of $1.4 billion.



Of eBay's membership, 80% of the items sold were by 20% of the users (called "Power Sellers"). These Power Sellers were mostly retailers but also some hobbyists who had converted into being "collectible sellers." Ebay also owns Half.com, where individuals post items at a fixed price for immediate sale. Pursglove cited that many "people are crossing over" from using both auctions and this "immediate seller format."



Amazon.com also has expanded into this attractive territory. Sam Wheeler, group manager for special sales and auctions, confirmed how "Amazon wants to be the place where you find, discover and buy anything online." Amazon charges a lower commission rate than eBay (5% for items selling for under $25, 2.5% up to $1,000, 1.25% for over $1,000) and a nominal listing fee. In addition, Amazon sponsors "Zshops" where individuals can set up web storefronts. Wheeler emphasizes that zShops retailers, such as Mile High Comics (which operates their own site too), can succeed and in fact compliment Amazon "by selling things Amazon may not, such as out of print titles."



Comic Relativity



To bring auctions closer to home, Shira Levine, eBay's category manager of books, comics and science-fiction, counted 60,000 comics and ˝ million collectibles on the site currently. Drawing from her DC Comics background, Levine reorganized eBay's "categories by how people actually collect" (ex. Gold vs. Silver age), added new segments, and created a specific comic destination page. While conducting "ebay 101" seminars at the San Diego Comic Con, she partnered with the Comics Guarantee Corporation (CGC) to authenticate, grade, and seal issues for web users.



Positioning eBay as the "highway of all possible collectors," Levine stated it's "challenging for new retailers to create community greater than what ebay has concentrated and grown." She estimates that 50% of all comics retailers engage in online auctions and that it is a "known and accepted method for doing business." As an alternate channel for liquidation or retail selling, web exchanges allow retailers to clean out inventory (back issues and overstock).



If online auctions are a safety net for people who miscalculated initial ordering or experienced unpredictable drops in demand, ultimately they "allow retailers to become better business people and improve their customer service" according to Levine. Affirming that fans are "brand loyal to the experience of community center," Levine argued that online auctions do not reduce traffic to local stores, but rather act as "ancillary contacts" that satisfy both retailers and consumers interest to transact more.



Retailers new to online auctions can dedicate one employee part-time to manage sales. Also retailers can function as consignment centers for customers by taking a commission on the products they sell. On eBay, popular categories are statues, golden age comics, and original artwork. Anime and manga are scattered throughout the site (from movies to toys) and certain items' popularity are seasonal, depending on the timing of new releases and TV exposure.



Publishing means Promotion



But as always, comics find it difficult to expand from its niche. For publishers who want to compete in this digital age and become more entrepreneurial, online auctions are great places to launch projects.



However, most publishers have not auctioned new products to any great extent. Even though the secondary market revitalizes the primary market, publishers can't immediately auction new releases since it conflicts with their direct retailers. Despite this, Dark Horse has progressively marketed to their cultish fan base, such with as with Buffy auctions. Recently newcomer Thunderwave Studios has pushed their debut title "The 10th Muse" (Reno Mero, aka Sable from World Wrestling Federation) in conjunction with Dynamic Forces on eBay, where Publisher Darren Davis was willing to pay for better placement to generate the necessary buzz.



On the magazine end, Dan Haggerty, VP of www.wizardworld.com, has launched their online price guide to be a market for 150,000 comics. Without listing fees, fans can open a free account to buy or sell titles. People can change the grade of an issue to get a different price estimate, add comics to their personal portfolio, and select ones they want to acquire. Purchasing will be on a first come, first served, where buyers and sellers communicate via email. Now that the Wizard Mall (formerly affiliated with Another Universe) is a compendium of links to comics retailers who are online, Haggerty wants WizardWorld to be a complete resource where customers can have an "online inventory, Merchandising, and sales system" in one place.



Beyond promoting of original art and collectibles (such as eBay selling Mark Waid paintings and Stan Lee's desk), publishers can be enormously creative online. Amazon's Sam Wheeler specializes in producing "high profile events, such as for movies, TV, and theatrical events." Maximizing consumer awareness of entertainment for film studios and record labels "is integrally important" Wheeler states. Amazon's core competency is selling books, video, and music, so that if he can get "more people looking for them," the better his chances are to successfully "migrate them to online auctions."



State of the Sale



Users are redefining the web as a trading platform to suit their own needs. New auction categories evolving by the day, as eBay has just opened up autos, real estate, and a business exchange for Sun Microsystems.



However, one thing remains constant. Avid collectors are more unique than the general public - they are "completists" who want to add things to their lineup. Retailers' challenge is to extend their relationships with regular customers, so that consumers can deepen their association with nostalgia and memorabilia.



More people are coming around to the idea where you can find anything online. Isn't it time you took the swim too?



Online Auctions - Part Two



Delving deeper into selling online, people can engage in many forms of auctions:

· Reserve: bids must equal or surpass a minimum price set by the seller.

· Dutch: 2 or more of the same item is for sale; bidders submit both a quantity and a price.

· Barter: seller and bidder trade items of agreed upon and equivalent value.

· Proxy: bidders submit their maximum bid; the web site (as a proxy) automatically bids higher on their behalf to counter the bids of other bidders.

· Private: seller and bidders' identities are secret; the identities of the seller and the winning bidder are revealed at the end.



However, rather than explaining each type in turn, I'd rather share some varied examples of retailers' success.



Collections



For the souls who want everything (and I mean everything) associated with a particular comics character, series, or creator, you can try to satisfy your desires by searching for what others have collected and willing to part with...for the right price.



A case in point is www.thespidermancollection.com, which states that it is the "largest collection of Spider-Man memorabilia for sale" and that it is valued at over $200,000 by Butterfield & Butterfield (a traditional auction house that was recently bought by eBay). This entire lot (no separate individual items) was sold on eBay on October 20, 2000.



Consignment



Selling on behalf of others for a commission remains as lucrative as ever. Nadia Mannarino runs All Star Auctions (http://allstarauc.com) which sells collectibles and comic-related art through its catalog. These range from comics from books and newspapers to toys and movie posters.



The company also acts as an agent for artists such as Frank Frazetta, Carmine Infantino, Mort Drucker, Joe Simon, Jim Steranko.



Having sold through regular houses like Christies, All Star combined internet auctions with conventions into a "Simul-con." Starting in 1999, they hosted an online auction during the San Diego Comic Con. Conventioneers could view products at the company's booth and bid on them against eBay members worldwide.



Retail



Barry Short from 21st Century Comics (Fullerton, CA; 714-992-6649). I thought it was best to use his response verbatim to do his experience justice. He wonderfully illustrates how an active retailer can generate positive results.



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"I don't know that what I'm doing is particularly innovative, but I've had good success with eBay in several different ways.



"Initially, I found it a good way to recoup my investment in leftover items. Not necessarily single comics - it's not really cost effective there. But extra boxes of trading cards, leftover t-shirts, statues, general merchandise - I've been able to sell all of those, almost always at least reclaiming my costs, often getting retail or close to it. This means fewer losses due to unsold merchandise - always a good thing!



"I've also used eBay extensively to sell unusual collectible items, where having a larger pool of buyers than I have in my store has resulted in significantly higher selling prices. Things like old toys, movie memorabilia, high grade key issues of various comics - all have sold for me at well above what I would expect to sell them for in my store. For instance, a while back I sold a VT-1 SuperOstrich - a big transformable Valkyrie from the Macross motion picture, mint in a very fine box. I'd been selling these here at 21st Century Comics for around $250-300, but I'd sold two recently and knew it would take a while at least to sell another. So, I put it on eBay, started it at $150, and sat back and watched as the bids came in - until it finally closed at $960.00! I would NEVER have sold it for that much in the store - and most people would have thought I was insane if I'd ever asked that much.



"A sale like that is of course the exception, not the rule. The biggest

adjustment to selling on eBay is that you have to be willing to accept low prices on some items. Understand that you may well sell that item for the minimum bid, and decide what your minimum is, based on that knowledge. Sometimes you'll be disappointed, sometimes you'll get a thrill.



"One other way that I've received some good value from eBay is in providing me with a way to sell items that I don't normally carry in my store. From time to time I get merchandise, such as when buying a collection, that's outside my normal inventory parameters. Most of it goes on eBay in one form or another - and I often get very good return. Recently I sold a bunch of Dragon Magazines that way - we don't carry RPGs, but these had been in a comic collection I'd purchased. They were relatively early issues, mostly in really nice shape, and sold for an average of close to $20 each - in fact, they ended up covering the cost of the collection. Pretty amazing, as we hardly even took them into consideration when buying the collection. (Shira Levine probably remembers my amazement at the prices on the Dragons - I had them up for auction during the San Diego Con, and kept going back to check the progress!)"



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Short's experiences are very instructive, since only by experimentation can retailers gain the necessary confidence to make auctions a meaningful part of their business.

· Be flexible, pragmatic, and opportunistic to roll with the unpredictable ebbs and flows.

· Be pleasantly surprised with high sales but not devastated with low ones.

· Be dedicated to maximize the return on sunk costs



So let the last word on auctions be "action." You need to take it, and engage your customers wherever they are to give them whatever they want, whenever they desire it.

Don't be afraid to meet them online, and on their terms. The conjoining of interests is what retailing is all about.

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