From: [c h riscade] at [aol.com] (Chriscade) Newsgroups: rec.arts.comics.misc Subject: News from Diamond/DC (II) Date: 2 May 1995 16:27:05 -0400 Questions & Answers With the DC & Diamond Management Teams Effective in July, Diamond will be DC's "exclusive sales agent." How does this relationship differ from the traditional publisher/distributor relationship? Paul Levitz, DC Comics Executive Vice President and Publisher: As our exclusive sales agent, Diamond will continue to handle traditional distribution functions: soliciting orders; order processing; physically pulling, packing and shipping orders; invoicing; credit and collections. However, Diamond will no longer actually purchase product from DC for resale. Instead, the actual transaction will be between DC and the retailers. We'll set our own prices and terms of sale, and Diamond will act as our exclusive sales representative in the transactions. Steve Geppi, Diamond Comic Distributors President and CEO: One very important thing that doesn't change is that Diamond remains an independent company, wholly owned, operated, and controlled by me. We'll continue to run our business according to the needs of our customers, while offering products from the widest possible range of suppliers. Why have DC & Diamond chosen to enter into this relationship? Levitz: In our view, Marvel's new distribution plan can limit choices for retailers and fans, and access to comic book specialty shops for creators. That's why we set out to find the best alternative, one which would ensure that DC comics are reliably and efficiently distributed while preserving the healthy diversity of our industry. Our search led us to the unique relationship we have established with Diamond, a strong company which has competed on a level playing field over the years and emerged as our industry's leading distributor. Geppi: When DC came to the conclusion that exclusivity with an established distributor was their best option for answering the recent changes in our industy, Diamond was very much interested in providing that service, provided we could maintain the independence which has enabled us to serve our customers and all our suppliers well over the years. By gaining DC exclusivity while maintaining our independence, we've put ourselves in a position to become an even better company, with even more to offer retailers and suppliers alike. DC has long been an ally of our entire industry, and in putting this deal together, they've once again demonstrated a willingness to look beyond just their own self-interest. Our two companies have always worked well together, and that gives us an excellent foundation to build on for the future. Will Diamond be offering other suppliers exclusively in the future? Chuck Parker, Diamond Executive Vice President and Chief Operating Officer: To be quite honest, that remains to be seen. When Marvel moved into distribution, we started talks with our other suppliers about how to best work together in the future, and those talks are still ongoing. How do I open an account and place a May order (for July shipping) if I'm not already a Diamond Customer? Roger Fletcher, Diamond Vice President of Marketing/Customer Service: Our objective is to make becoming a new Diamond customer as easy as possible. Diamond is currently mailing a May Previews Catalog Pack (for July shipping product) and an Account Application to every comic retailer in our data base, along with simple instructions for becoming a new Diamond customer. If you don't receive these mailings by May 9, or if you have questions of any kind, please call 1-800-362-6421, or 410- 560-7100 from outside the U.S. & Canada, from 9:00 am to 9:00 pm, Eastern Time, or fax us at 410-560-7148. Do I have to fill out a massive questionnaire about my store just to open an account? Fletcher: No. Just Diamond's standard Account Application. Will I be able to order electronically? Fletcher: If you call 1-800-362-6421, one of our new Account Representatives will be happy to send you a copy of "Previews On Disk" in either IBM or Macintosh format. "Previews On Disk" makes monthly ordering easier, and gives retailers three extra days - until May 25 - to turn in their orders. Retailers with computer modems can also download Diamond's May Order Form by connecting with Diamond's electronic bulletin board at (410) 560-7155. With Diamond as DC's exclusive distributor, what will my discount be on DC products? Bob Wayne, DC Director—Direct Market Sales: Although we haven't finalized our complete trade terms yet, because we are covering many areas that are totally new to us, we can tell you the principles which are guiding us. We want to allow retailers to maintain (or improve) their current discount levels on DC product. We want to continue to offer co-op advertising to allow retailers to attract new customers to their stores. We want to allow retailers to choose which titles they carry, and in what quantities, rather than forcing them to carry titles which may not sell in their stores. We want to maintain a competitive posture vis- a-vis other publishers. We are confident our terms will accomplish all these goals, and we plan to announce them as quickly as possible, hopefully within the next two weeks. In the meantime, on your May orders for July shipping products, we will match whatever DC discount retailers qualified for in April, either with Diamond or another distributor. What will my discounts be on non-DC products? Parker: Diamond is committed to doing our best to maintain the overall pricing we offer. On May orders for July shipping products, Diamond will give our current customers the same discounts they qualified for in April, unless they qualify for an even higher discount under our current discount plateaus, despite the absence of Marvel comics. (The latter may be true for retailers who, in the past, split volume between multiple distributors, but now order all their non-Marvel products through Diamond.) For May orders from new Diamond customers, Diamond will match the maximum discount you received from the distributor you bought from in April, provided you forward a copy of an April invoice from that distributor when you send in your Diamond Account Application. After May, Diamond will be implementing new discount plateaus which will take the absence of Marvel comics and other factors into account. These new plateaus will be part of an overall review and restructuring of our wholesale prices. Our goal will be to offer the best overall pricing possible, and we've already committed to significant new saving for retailers on trading cards and toys. I wish we could be more definitive at this time, but industry dynamics are still evolving, and we need to wait for the dust to start to settle before finalizing all our pricing. Look for more announcements on discounts, minimums, and related topics in the coming weeks. If I'm a new Diamond customer, what will my credit terms be? Larry Swanson, Diamond Vice President of Finance: If new Diamond customers enclose a March Billing Statement from another comic distributor when they return their Account Application, Diamond will match the payment terms they've been receiving. Retailers not forwarding documentation of current payments terms will be set up either C.O.D. Check or Net 7 Certified if they're located in the U.S. and Canada, or prepay if they're located outside the U.S. and Canada. How will retailers receive product under this new arrangement? Cindy Fournier, Diamond Vice President of Operations: To allow retailers to compete on a level playing field when it comes to speed of delivery, Diamond's goal will be to distribute products to retailers in close proximity at approximately the same time. Depending on where a retailer is located, products will either be available for pickup at a Diamond Distribution Center, delivery by Diamond, or distribution via UPS or another third party carrier. The cost and availability of Diamond Delivery will be determined according to the volume of products a retailer orders from Diamond, and the total number of retailers in a given geographic area. UPS and other third party delivery charges will be billed according to the carrier's rates. Diamond delivery charges will be comparable to UPS. With the above in mind, after May orders for July shipping products are processed, Diamond will evaluate how to best and most economically make new releases available to retailers worldwide. Our local Distribution Center crews will then be contacting individual customers to discuss their specific situations. Can Diamond really handle this many new customers by July? Fournier: Yes. We're already dealing with a majority of the retail base, and we have the best distribution systems and infrastructure in the business. What's more, we have a history of successful expansion, so we know how to service many new customers quickly. What about countries or areas where Diamond doesn't currently have a distribution center? Fournier: Our plan is to continue to sell to subdistributors outside the U.S. & Canada, or directly to retailers in these other countries if individual retailers so desire. For areas in the U.S. and Canada where we don't have a Distribution Center, our goal, again, will be to ship new releases so they arrive to every retailer at approximately the same time. What if I have trouble getting DCs or other products from my current distributor before July 1st? Fletcher: Within a few days after we receive your Account Application, you'll be able to start placing orders with the Diamond Distribution Center which will be serving you in the future. You'll also be able to order best-selling backlist items from the Diamond Star System. We encourage you to honor your pre-May DC orders with other distributors, but if you have a problem receiving those orders, we will do everything possible to make sure you get the merchandise you need.