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The Old Order Changeth: Marvel Makes Ordering Comics More Retailer-Friendly

[Marvel]The direct market has always been something of a gamble for comic book retailers: Books have to be ordered well in advance of them arriving in shops, and second and third issues of new monthly series have to be ordered prior to the first issue arriving in stores.

As a result, retailers regularly get stuck with one of two problems: Either they buy too much stock (which cannot be sent back to the publisher in the comics industry) that they've tied money up in and cannot sell, or they under-order, and frustrated customers are unable to find the second and third issues of surprise hits, thus choking off sales for new books and new changes in direction.

"In a lot of ways, this created a system where retailers were ordering blind to what sales trends were, by as much as two months," Gui Karyo, Marvel's Executive Vice President of Operations & Chief Operating Officer, told a Wednesday telephone press conference.

On Friday, Marvel Comics passed the word to retailers that, in the immortal words of Stan Lee, the old order changeth.

Under the revised ordering system, Karyo said, retailers will be "able to lock in their orders in a weekly cycle. ... and [have] the ability to see what the previous month's sales were up to the last minute before ordering."

Retailers on Friday had received the following e-mail outlining the changes:

Dear Retailer Partners,

Marvel Comics is very pleased to announce new Terms of Sale, effective withthe February Order Form and orders placed after March 10, 2003. The newterms eliminate the need for an initial order cutoff date, allow you greaterflexibility to adjust orders all the way up to the Final Order Cut-Off date(while still receiving your full monthly Standard Discount), and change theway your monthly discount is calculated.

*****NEW ORDER FLEXIBILITY

As a result of the new terms, you're no longer required to submit orders byan initial order cut-off date to set your discount. In fact, Marvel productwill no longer have an initial order cut-off date at all!

You now have the ability to place, increase, decrease, and even cancelorders up until the Order Increase Cut-Off Date for any product, while stillreceiving your full discount for all products invoiced during the on-salemonth. This gives you the added flexibility to budget closer to actualon-sale dates, and better judge potential reader interest.

For example, under the new terms, you now have all the way up to the FINALORDER CUT-OFF (OIC DATE) of 3/13 to place, cancel, decrease, or increaseorders for the MARVEL ENCYCLOPEDIA Vol. 2: X-MEN Hardcover (on sale 4/2),while still receiving your full standard discount on those orders.

Or, for you retailers projecting strong interest in VENOM #1, the debutissue of the new ongoing series (on sale 4/23), you now have until 5/8 toplace or adjust orders on VENOM #2 (on sale 5/28). These new terms eliminatethe "ordering blind" period you face with new series, new story arcs and newcreative teams, allowing you to place more accurate orders on subsequentissues using weeks of real reader response as a gauge.

*****NEW DISCOUNT CALCULATION

Under the old terms, your Marvel discount was set each month based on yourinitial orders, with the retail value of those orders determining yourdiscount plateau for the month. Reorders and orders placed after the initialorder date would not positively affect your discount. Under the new terms,every month Diamond will use your entire monthly invoiced orders (bothinvoiced initial orders and reorders), averaged over the previous twelvemonths to calculate the average retail $ value. That average retail $ valuewill then be matched to the same discount plateaus to set your discount.

For example, for products on-sale in April 2003 (solicited in the FEB. 2003PREVIEWS), your Standard Marvel Discount Plateau for April 2003 will bedetermined by calculating your average monthly invoiced retail dollar valuefor the period of March 2002 to February 2003, with February being the last"closed" month (meaning ALL invoiced sales - including reorders) have beencaptured) in this cycle.

There has been no change to the Standard Discount Plateaus or to Net Costcoded items; only how the monthly retail $ value is calculated. Your newdiscount will take effect April 1, 2003, beginning with the FebruaryPreviews product on sale April 2, 2003, and any orders placed after March10, 2003. And with the new order adjustability, you will be able toincrease, decrease, or cancel your orders for all April 2, 2003 (FEB03) onsale product until March 13, 2003.

This new system will reward you for ALL Marvel invoiced product over thelast year, make discount calculations a less complex process, and helptemper the effect of down months you sometimes experience because ofvolatile economic conditions or changes to Marvel's own publishing schedule.

*****NEW TERMS, MORE OPTIONS

We're confident these new Terms of Sale will offer our retail partners moreoptions and flexibility in placing their Marvel Comics orders and we lookforward to working with the retail community to continue to improve ourTerms of Sale in the coming months.

Given the large portion of the direct market that Marvel Comics' sales makes up, the move is likely to be closely watched by other publishers, even those happy with the current arrangement, for its impact on direct market sales.

Outside of clarifying and explaining the changes, Marvel's press conference was light on other news topics: "Spider-Man's Tangled Web" has officially been cancelled, and Marvel representatives promised more information on the reborn Epic line in the coming weeks.

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