From Fortune:
I own two comic book stores in San Francisco. Despite being in retail for over 30 years now, I have to admit I’m worried the future of businesses like mine.
As Americans continue to do more of their shopping online, local brick-and-mortar retailers are suffering. I can already see the impact in my neighborhood, where there are fewer businesses that sell goods, and more that sell services. The four-block commercial corridor near my home is packed with restaurants, cafes, nail salons, and businesses offering financial services. Many of these spaces used to be retail stores.
If there’s any solution to reverse the trend, crowdfunding efforts and patronage programs may be it. In my immediate vicinity, a number of bookstores are already doing this, giving away benefits such as priority seating at author events and dedicated Wi-Fi to customers who participate. Beyond ongoing patronage, there are a tremendous number of “one-time” crowdfunded cash infusions, like this campaign to raise money for Video Wave, a local video store in one of San Francisco’s wealthier neighborhoods; this one to save G&O Family Cyclery, a bike shop in Seattle; and this one for Ray’s Ragtime, a used-clothing store in Portland.
. . . .
Despite the ease of online shopping, I believe many people still prefer shopping for physical goods in physical stores. In many cases, they’re even willing to pay a premium for the experience (I don’t sell a single product that can’t be found for a less expensive price online, and yet our customers and gross sales have strongly increased over the last 10 years). Still, none of that is enough to cover our rising costs. In San Francisco, where the already notoriously expensive rents continue to climb, the minimum wage will soon be increased to $15, a one-two punch for stores like mine.
Link to the rest at Fortune
The ” dedicated Wi-Fi to customers who participate” is not much of a benefit, most customers now have a data plan that lets one use the internet without fear of going over limits. Also when you use your data plan you do not have to give access to your data and machine to a unknown network.
>crowdfunding efforts and patronage programs
If you have to beg your customers for subsidies, you’re done. If you can’t figure out a sales-based plan that will significantly turn your income around over the next few months, it’s time to begin planning how to wrap up the business as cleanly as possible.
Sadly, the only comic book store in America that can pay a $15 wage to someone would be Midtown comics in NYC. None of the other things he spoke of would put him out of business. Curated subscription boxes and wi-fi could help him with the rent, but nothing will overcome that $15/hr. He is probably going to have to fire all his employees and work nearly for free. Why? Comics, like books, have the price printed on them and you can’t charge more. There is such a slim profit margin on them you have to make up for it in volume. I love comic book stores, I wish they all didn’t have to close. However, even store that don’t have to pay $15/hr have been closing.
Comic book stores don’t survive on floppies anymore. At best they might pay the rent. If they’re lucky. Their bread and butter is graphic novels and collectibles. As for employees they might employ one “full-time” and one part-timer and be open maybe 4 days a week.
For that matter, Marvel and DC don’t make much money off the comics; for decades, licensing was the cash cow. These days it is the movies (for both) and TV shows (for DC, mostly) that are gold mines.
It must be terrible to have to pay your employees a living wage.
It must be still more terrible to think that merely being an employee entitles you to take home more money than your employer. If you define ‘living wage’ as the proposed $15-per-hour minimum in San Francisco, many millions of Americans don’t make a living wage, and billions of people worldwide. I don’t make one myself; but I don’t go crying to the government to force somebody to pay me more.
You do realize that some unskilled jobs are not meant to support a person as their sole source of income, right? Because, if they did, then the cost of goods and services would go up, thereby increasing the amount needed to constitute a “living wage”, thereby necessitating yet another increase in the cost of goods and services to pay for those jobs, etc, etc…?
They could try blending online into their business.
Many do.
Quite a few comics shops operate online operations on the side.
After my last move I still get my comics from the same shop I used to for years. He emails me the list of new releases and I email back a pull list. He’s got my CC data and once the pile justifies the shipping it goes out.
He still keeps the storefront but the online helps him stay in business. (He was also an early Kindle and iPad adopter. No luddite pining for the old days.)
+1
After all, even Amazon is experimenting with blending brick-and-mortar into online commerce. 😉
“If there’s any solution to reverse the trend, crowdfunding efforts and patronage programs may be it.”
Comics appeal to teenagers and families. I’d say his problem is also tied to the city’s refusal to build desperately needed low-income (or even reasonably priced) housing that would keep families in the city.
You mean the city’s refusal to subsidize housing sufficiently to make it affordable for poor people to live on scarce and expensive real estate. Land in San Francisco isn’t exactly abundant, and they are not manufacturing any more of it.
Unfortunately, people who don’t have families can afford to bid higher prices on the land that is available, and the cost of housing goes up and up. Then, of course, they don’t want to lose money on the luxury good that they fondly imagine to be an investment; so they will vote against any initiative or any politician that threatens to make housing less expensive. Their compassion for the poor is trumped by their urgent desire not to become poor themselves.
I apologize for going terribly off-topic here, but the root of the problem is simply that San Francisco is a desirable place to live, or at least perceived as so by enough people to make that perception an economic force. The result is insanely expensive real-estate and sky-high rents. You can’t “build” affordable housing in San Francisco – if it is subjected to market forces, it will quickly become unaffordable. Thus, Tom is right in that new housing has to both be subsidized (in order to be built at all) and subject to restrictions (such as San Francisco’s byzantine rent control laws) in order to stay affordable, such as it might be. (Many casual readers here would be floored by what “affordable” means in relation to San Francisco housing prices.)
The question that inevitably arises, and not just from the wealthy but from all levels of society, is, why exactly do poor or even middle class people think they have any right to live in San Francisco just because they want to?
There are plenty of expensive enclaves in the Bay Area that I would like to be able to move to, but I can’t afford it. I’m pretty sure I wouldn’t get very far by approaching them and demanding they build housing I can afford. If San Francisco builds housing affordable to someone defined as being middle class, who determines what middle class people get to live there? *I* might like to live there. Do I enter a lottery, or what? A result is that this sort of subsidized housing is pitched for public servants such as fire, police and teachers, which transforms it into just another expensive benefit for those groups. A lack of some economic classes in the City poses some ongoing problems (for example, there is a shortage of short-order cooks in the city) but those problems are not ones people want to spend many their tax dollars to try to fix.
tl;dr – People don’t have a right to live wherever they want. They have a right to live wherever they can afford to.
Housing obeys the same laws we have seen apply to books and bookselling. If a good is in demand, the price will find a way to go up. If it isn’t, it will find a way to go down. Not everyone votes in elections, but everyone does vote with their money, every day, and that makes those billions of economic votes an immensely powerful force.
Exactly.
Housing and retail space in SF isn’t expensive simply because it’s desirable or rare. To have lower rent/ownership prices SF just has to start allowing people to actually build new and also rebuild buildings in denser versions. The issue is that the City’s residents elect representatives to not allow that.
You can argue about whether they are wise or not to restrict development like that, but the economics of the situation isn’t the subject of much factual dispute. The issues are zoning, rent control and building permits.
It averages 10 months to get a building permit in SF (and they require permits for simple things, like building a deck). Building permits are also discretionary. If your neighbors don’t want something built, or an environmentalist doesn’t like it, expect to either pay a lot more money fighting it or not get your permit. It’s illegal (don’t even apply!) to build most denser structures based on the zoning laws. There is plenty of room for more people to live and work in SF, but it’s effectively not legal for them to do so.
So artificially reduced supply means higher costs and less people who can afford it, like this store owner, eventually. But there aren’t a lot of incentives for the people who already live there to change their laws, because that would reduce the property values which they’re keeping artificially high.
I’ve been out of the retail comics business for quite a few years, but the problem in my day was that comics *didn’t* appeal to children and teenagers. The customer base was made up almost entirely of aging men who had gotten into comics in the 1970s and 80s. Younger people spent their disposable income (and time) on video games.
Despite the ease of online shopping, I believe many people still prefer shopping for physical goods in physical stores.
In other words, even though people stop shopping in retail establishments in his area, and they go out of business, he still believes people really WANT to shop in those retail establishments — evidence be damned — and we should pass the hat so those establishments can continue doing some sort of business.
Whatever.
I do. I’d rather buy something from a local store than order online from a giant conglomerate and have to wait for it to turn up.
The problem is, the local stores rarely have the things I want in stock. Which rather defeats the point.
I personally love shopping online. I hate stopping what I’m doing long enough to go to the store and get something. If I need something faster than Amazon can get it to me, I feel like I’ve failed at something. Of course, I don’t buy the daily essentials in our house, like milk, eggs, cheese and fruit.
He gave evidence by his own store, which has seen increasing profits, in spite of having higher prices. He’s claiming that in his area, the problem is as much the increase in rent and the upcoming increase in minimum wage that has him scared for his own business.
his rising profits are because his store
is in san francisco, where locals who
shop there have discretionary income
which has been exploding, which is
why the rents are shooting sky-high,
which is a vice that will squeeze him
and his store out to a location where
people will be too poor to subsidize it.
services are different! but for products,
we want endless variety at low prices.
online gives it. brick-and-mortar cannot.
(well, unless it becomes a delivery hub.)
-bowerbird
It’s always good to face reality.
@ Barbara
But, but… ignorance is bliss! 🙂
At least until reality rears its ugly head and can no longer be ignored! 🙁