Readers of this site have surely heard of Lunar Distribution by now; since this past January, Lunar has been the sole distributor of DC Comics periodicals to North American retailers. However, Lunar has been steadily adding new publishers to its distribution roster, including a number of art-focused small-press houses. In the following roundtable discussion, former Comics Journal managing editor RJ Casey speaks with Lunar co-owner Christina Merkler and representatives of three comics publishers that have recently begun non-exclusive distribution arrangements with Lunar: Jason Leivian, of Floating World Comics; Tom Kaczynski, of Uncivilized Books; and Avi Ehrlich, of Silver Sprocket. This wide-ranging discussion touches on the finer points of comic book retail distribution, from discounts to shipping rates to packing, and captures a sense of optimism in a frequently troubled field.
Please note that Tucker Stone, an employee of Consortium Book Sales and Distribution, did not take part in the editing of this article.
-Joe McCulloch, editor
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RJ CASEY: My first question is for the three publishers here. Why go with Lunar?
JASON LEIVIAN: This was an idea that a writer, Dave Baker, proposed to me. Dave writes the Night Hunters comic, which I publish, and has also worked with Silver Sprocket. We like to do a lot of industry talk about distribution and we’re always talking about different ways to get our books out there. He mentioned this and said, “Have you thought about distributing through Lunar?” I was like, “Well, not really. I don’t think that they would take me. They just have DC and maybe one other publisher.” But he proposed that we reach out to them. When we did, we got a pretty quick email reply back. I think just from the start, I was pleasantly surprised by their responsiveness and the conversations that came from that. I think the idea is just to get more distribution. I’m always looking for more ways to get the books out there and I wanted to have an open mind about it. I didn’t know anything about Lunar before that first phone meeting with Christina. The more I learned about Lunar from her, the more it looked more interesting to me.
Then did you contact Silver Sprocket and Uncivilized? How did that initially pan out?
LEIVIAN: After the first meeting with Christina went well I started to think about what this would look like. At that time, we would have been maybe their second or third publisher. There was DC and Scout, but maybe the Ahoy announcement hadn’t quite happened yet. With Z2, that was news that hadn’t happened yet. I thought it would look a little strange. A lot of retailers would be like, “I’ve never heard of Floating World. I don’t know what this is.” In that first meeting, Christina was telling me that they wanted to curate the publishers that they worked with. She knew of Floating World and liked what we were doing, so that signaled to me that Lunar was interested in working with interesting independent publishers. So, I was like, “Well, in that case it doesn’t just have to be Floating World. It could be other like-minded publishers.” I asked Christina what she thought about that. “If Floating World came on, would you be interested in looking at some other publishers similar to us?” And she was. Tom and Avi were the first two that I thought of. I just thought that that would be a little more unified and it would make a little bit more of a statement if you have these three independent publishers all coming onboard at the same time. That kind of sends a message of what Lunar’s identity could be as a distributor.
TOM KACZYNSKI: I don’t know if I have a lot to add to that other than Uncivilized is also always looking for other ways to distribute and the more channels we have, the more ways we have to find readers. When Jason contacted me, after a while it seemed like a no-brainer. It seemed like a good way to go.
AVI EHRLICH: As independent publishers, distribution is always one of our biggest hurdles. We need to make our books accessible to retailers and that’s always a major challenge. To have the channels literally exist, but also to stand out from the thousands of other publishers trying to get that same attention. For us, this is really just about presenting our retailers with options. We want stores to be able to order through whatever channel they feel the best about ordering through. But it’s not just nuts and bolts. The folks at Lunar really do seem to care about retail and have ideas to do interesting things. I really appreciate that we get to set our own discounts and a lot of our own terms. They aren’t some giant corporation that has a very strict way of working with small publishers. They’re actually talking to us about what we’d like to see them do on our behalf and with our books. We have a lot of agency in that and that is so refreshing. I don’t know any other distributors that give us the level of granular control like what our discounts will be. No one else will let us decide that, so it’s cool that they're letting us directly dictate that.
Christina, I have a question for you. These three publishers are vastly different from any on your roster so far. I would say that they put out more challenging work than publishers like Z2 or DC. What can you uniquely provide for them?
CHRISTINA MERKLER: I think by virtue of having less publishers, we get to provide them the exposure that they really need to a really large retail base. Lunar -- I’ll be honest -- was created out of necessity to just help the retail market get books initially. For whatever anyone says, it was a matter of helping the direct market stay in business for as many businesses as we can. A year later, we’re a very different company obviously. But what we do want to bring is the ability for a large retail account base to see products - as a retailer, I don’t look through the entire Previews catalog anymore. I actually haven’t in years. But I used to be that person who went through every single publisher A-Z because I really was never a big superhero comic reader. I never have been. I can tell you on probably two hands how many DC or Marvel books I’ve read in my lifetime. So, of course, this is more important to me. I’d much rather see independent books thrive and make sure retailers have that exposure to them. I really believe that retailers want it, but it’s really difficult when you’re looking through a Previews book with 150 different publishers and none of them have any specific type of quality base to them. It got to a point where I felt, personally, that Diamond was legitimately taking on anyone who was willing to publish a book. I’m not saying that in a negative way, but once you have that much, then the exposure is so much smaller for each of those publishers. We don’t want to be that kind of distributor.
As you’re growing and getting more publishers, like in this very situation we’re discussing, how do you prevent that at Lunar?
MERKLER: I don’t ever want to have 100 publishers, to be honest with you. We need to support the publishers that have a commitment to the industry, but also have a commitment to quality and consistency. This is one of the big things that I tell all of the publishers that I talk to: it’s fine if your books are a little late or not done. I’d much rather you just solicit a book when it’s done. I certainly don’t want a retailer waiting four months for a book that you said would come out at a certain time. We want to be able to help those publishers that may have a few more obstacles and don’t have that DC money behind them. We also want them to have their product out in the marketplace. Unfortunately, what happens with Diamond is that books get solicited and then people wait a year for it. They then see that publisher as not dependable. That’s not true. They just have to play a different game, but that’s not Diamond’s game. I don’t want to be another Diamond. I want to be Lunar and I want to be better. I want to find better ways for publishers to bring their product to market and be exposed to all those retailers. I know we’re only going to see things once a year from some of the publishers that we’re going to take on. We’re fine with that. I felt that publishers who wanted to be solicited through Diamond, there were so many expectations and it wasn’t realistic for them and their business model.
That leads into my next question. These three publishers probably put out eight to ten books a year. Is that fair to say?
LEIVIAN: Yeah, that’s about right. Maybe a little more.
And I have to assume that you all are taking a chance on a few of those and know some of those may not sell like crazy. Diamond has minimum order levels on some of their products. Does Lunar have that stipulation?
MERKLER: No.
LEIVIAN: We talked about that in our earlier discussions. I asked her if that would be a problem and she said not at all.
MERKLER: It really isn’t. I get it. If you’re dealing with 150 publishers and you have to determine how many books are coming in on any given week, I could see how that could be an issue. If you have 40 publishers who sporadically publish, then it’s all a matter of planning, organizing and communicating. Again, I don’t plan on having 150 publishers, but if I were it would just be a matter of planning and organizing. Just making sure your systems are good. That probably was the biggest obstacle for Diamond, having a good system. They have an archaic system that they have to constantly patch. We were lucky enough to start brand new and to look and say, “What are the things that haven’t worked for us and what were the things we've heard over the last 22 years of being in business that retailers always have problems with?” We tried to build our system based on that.
LEIVIAN: I think those are differences in scale between Diamond and Lunar. Diamond has certain advantages because of their scale, but then Lunar is going to have all these other advantages just because they are new and not because they’re smaller, but because their systems were developed more recently. They can adapt a little quicker. To me, it’s amazing that I can just email Christina or get on the phone with her and share ideas with her that I know are going to be heard. That could make a difference.
Are any of you going exclusive with Lunar or are you keeping other options open?
LEIVIAN: I’ll still be distributing with Diamond for the direct market. Our books are through Consortium/Ingram, so they can sell to Lunar and Diamond.
KACZYNSKI: Same here.
EHRLICH: Silver Sprocket is not exclusive with anybody. We’re going to continue to be in the book trade through SCB and Ingram. And also Diamond and a whole bunch of little indies all over the place.
Avi and Jason - both of you are in a unique position here because you’re a publishing house but also own and operate a store. Will this shift to Lunar affect your operations as you run your stores?
LEIVIAN: As a retailer, when Lunar first popped up - I’m sorry to say, but it was annoying to a lot of retailers. It creates extra work. That’s one side of the retail side of it. A lot of stores are going to be like, “Oh, great. Another bit of data I have to deal with.” But Floating World has always dealt with multiple distributors. That’s one of the things that has set us apart. We’re not just a Diamond shop. We were kind of already set up for that and it’s not as much of a hassle for us. As a publisher, it’s another solicitation we have to work on, but I’m excited to start announcing things through Lunar. I think we’re going to reach new stores that don’t find us in the back of the Diamond catalog, like Christina said. Some people are going to be seeing Floating World for the first time.
EHRLICH: The Silver Sprocket store has never ordered from Diamond because we only carry indies so it really has no impact over here. We have literally hundreds of suppliers and that’s why we’re able to thrive. We are a comic book specialty store, but we’re doing good because we carry a bunch of weird shit.
LEIVIAN: I feel like there’s this newer generation of comic shops that maybe started around the same time as Silver Sprocket and Floating World. We’re not really considered Diamond stores because we take that extra step to source books directly from the creators or from other places like that. Lunar feels more like a peer to us, or a cohort. They kind of came up in that same world where it’s not just Diamond to get the product for your stores. If there’s a new generation of comic shops out there similar to us, then this will be a welcome change. There will be more choices. Like Christina was saying, Lunar is not going to just be a copy of Diamond. It’s going to be a new thing. Maybe I’m getting a little ahead of myself, but after my first conversation with Christina and she was interested in bringing on Floating World and these other publishers, I just started to imagine what it would be like if Lunar started becoming home to more publishers that I order from all the time. There's not much to compare it to from the past except for what, Cold Cut and Last Gasp, those types of distributors? I think it will be different from that. It will be like a new generation of that kind of alternative distributor.
I’m glad all of you are speaking so openly about Diamond here. You’ve mentioned several times that you're different from Diamond, but how so? Other than just size at this point, what differentiates Lunar?
MERKLER: We have the luxury of actually listening to customer feedback and being able to implement it pretty quickly. That’s the biggest benefit we have. And that is by virtue of being small, I understand that. We’re a retailer ourselves, so when we come across things we find -- I hate to say irritating -- but irritating, or things that cause us trouble when we're trying to promote a product, we can give that feedback directly to the publishers. We’ve generally always done that, honestly. We’ve been to Diamond summits from the get-go, but we’ve never been the ones to stand at a microphone and yell at Diamond for not doing something right because we’ve never felt that it was productive. If we had issues, we always took it directly to them or directly to the publishers if we felt it was more a publisher issue than a Diamond issue. I know that Diamond started out as one, but we are a family run business and always will be. Cameron [Merkler] and I are the only owners. I can say it and anyone can believe it or not, but Cameron is literally one of the most ethical people I’ve ever met in my life. I feel I am as well. We’re here and have been for 22 years as DCBS [Discount Comic Book Service]. We’ve been a part of the marketplace to sell as many comics as we possibly could to as many people. Now we just want to do it on the Lunar side and want to help retailers do that same thing. For all those that say Lunar and DCBS is out to put everyone out of business, to me, is unfathomable. Lunar is a business and we want it to be successful and the only way it is successful is if our retailers are successful. I would be thrilled to have twice the stores open, whether it’s online or brick and mortar, to help grow the market. That's really all that matters to us.
People are saying things about you putting people out of business? Who's saying this? Other distributors or other stores?
MERKLER: Stores. From the get-go we’ve had the same people who’ve disliked us from the beginning because we’re a discounter. They tend to be some of the loudest in the industry. For the most part, it’s a very tiny percentage of the actual retailers that we deal with on a day-to-day basis. I can tell you that the customers who send us emails through our service account are thrilled with our service. They are thrilled with our care and packaging, with our attention to detail and our ability to respond to them quickly. We talk with them about why things are happening or not happening, or [we're] coming up with solutions for them. We’re very solution-based as opposed to just giving excuses for things and why they’re not possible. We only have so much control, obviously, over publishers. Publishers are the bread and butter of the industry, in my opinion, and we just have to work well together and provide as much feedback as we can to them as well as communication to retailers.
Avi, you mentioned that you were able to set your own terms with Lunar. I’m a little naïve to the behind-the-scenes at Diamond, but is that something that you've been unable to do before?
EHRLICH: I literally don’t really understand how our discounts work with Diamond. My best understanding is that different retailers get different discounts based on their own order volume. Diamond pays us 40 cents to the dollar for every retail price. Then they’ve got different discount structures for different stores, I believe. Whereas with Lunar, we’re able to say every store just gets 50% off. That’s cool to be able to set the discounts and, if we want to, my understanding is that we can do other deals on a per-book level and have it not be a big deal to figure out. Just having that agency and control to figure out the terms that work best for our retailers is really exciting.
For Jason and Tom, is that something that appeals to you as well?
KACZYNSKI: Yeah. I think the main thing is on our end it’s kind of the same discount, but for retailers, it varies. Bigger retailers tend to get bigger discounts. Other retailers get smaller discounts. There’s some inconsistency in how those discounts get applied to various retailers. It’s kind of nice to have that consistency here. It’s closer to the book world where your discount is your discount, you know? That’s something that I like.
LEIVIAN: The numbers worked out the same for Floating World, where we’d be getting almost the same amount from Lunar and Diamond, but the retailers will get a slightly better discount through Lunar. We were happy to be able to offer that.
Christina, how does Lunar handle shipping and shipping costs?
MERKLER: To the retailer or from the publisher?
I guess both.
MERKLER: Publishers, generally speaking, are responsible for the shipping to us. The retailers take on the shipping to themselves. What we benefit from is that we negotiated really great rates with FedEx. We did that a couple of years ago, and when Lunar came into existence we renegotiated again because our volume went up pretty considerably. In doing so, we pass that on the retailer. The retailer only pays whatever FedEx is charging for that. We also offer UPS as an option. I’ve been negotiating with UPS over the last year and I was able to negotiate a better rate about six months ago, but they are still not where I want them to be. UPS is a different company to negotiate with because they can’t necessarily take as small of margins as a FedEx can. FedEx has owner-drivers and then UPS has union drivers. UPS has told me on numerous occasions that it’s much more difficult for them to take slimmer margins. My rep came in just this last week and finally made some headway. I feel like we’re getting so close to bringing those rates a little closer so that our retailers have options. No distributor really gives their retailers options. They just say, “This is the carrier we use.” We have essentially been doing that with FedEx, but we’ve always had UPS as an option, it’s just not the best option because the pricing is so far outside what FedEx charges. But everyone right now is dealing with shipping issues, whether you’re in the freight space, the LTL [less-than-truckload shipping] space or you’re just doing ground packages to a store, everyone is overwhelmed and it hasn’t changed. It’s only going to get worse, so we’re really trying to make sure we have two of the best options possible. As far as publishers getting their books to us, we have a drop-dead date each week that we have to receive them for them to be able to be in the fulfillment for the next week. That’s just based on us needing to get everything out to the west coast in time so that the retailers can get them on the shelves.
EHRLICH: As a retailer, I’m on a lot of these retailer message boards. We actually did one order with Diamond when we first opened our store. The shipping was so expensive and it completely messed up our margins in selling those books compared to what they would have cost us through any other distributor. The unpredictable, extremely expensive shipping from Diamond really was such a bummer. My hope is that this is something that’s better with Lunar. I think Jason might be able to speak to that better, but I imagine that they have better shipping rates than Diamond.
LEIVIAN: Shipping is a mess right now for everybody, but I do like Lunar’s transparency and that they give you a choice of what kind of shipping you want. Shipping is going to be cheaper if you’re doing bigger orders, so back in the day when it was just Diamond, you were getting bigger orders. And before COVID, your orders were bigger. The shipping costs as a percentage of your invoice is going to be smaller. Now my orders are smaller because sales are down because of COVID and that sort of thing. The orders are starting to get fragmented from different distributors. The downside is that shipping costs as a percentage of your margin or invoice, might be going up a little bit during this time. One thing that’s nice with Lunar is that their packing is very efficient. With Diamond, there was never a breakdown of your cost per box. You’re never quite sure what UPS was charging Diamond and what they were charging you. Sometimes you’d get this giant box with one book in it. You’d see that every week - some retailer would be like, “Look what came in this one box full of packing paper!” Lunar has got really good boxes and do double-cartons that protect against damage. They seem like they are really packed by hand, very well. I think that sort of efficiency in the long run is going to help Lunar with their shipping costs as well.
MERKLER: We specifically-- when we decided we were going to create Lunar in three weeks, the first thing we said was, “OK. This is how Diamond packs boxes right now. We can’t pack them this way.” But we knew we had to pack them as efficiently as possible. Cameron and our warehouse manager came up with doing a double box where you do a box a couple of inches wider on all the sides and put the bubbles around. You’re really not affecting the weight of the package much at all, but you’re preventing that dinged corner, which is the bane of every retailer’s existence.
LEIVIAN: To take that extra step on the front end, it saves the retailer so much. When you get a damaged book, you’re a week or two away from getting a replacement. It’s extra time for the person to report the damages and adjust your inventory. It just creates so much extra work for this damage that was maybe preventable. A book distributor performs many tasks, but I guess when it comes down to it, putting books into a cardboard box and mailing it to you is one of their essential tasks. So right off the bat, Lunar is doing a very good job with that.
This box conversation is very funny to me. How did Diamond get so bad at this?
LEIVIAN: I can only guess, but is it their size? They must do thousands and thousands of books and they have to do it so fast every week.
Every comic shop owner or employee I’ve ever talked to mentions how they can’t package books. It seems very crucial to mailing things that you have them in a box that works. [Laughs]
LEIVIAN: Yeah, that’s just primary. They actually started making a few changes over the last year, but how many years of complaints before they finally started to make some changes?
MERKLER: It is all a cost factor. They did the double-walled boxes, but if it’s getting sent by UPS and it’s getting dropped on a corner, there’s nothing you can do about it. We’ve been dealing with Diamond for over 22 years and in the beginning we did have problems when we were smaller. Once we got to the point where we were receiving freight shipments, it was much better. But then the problems we had were severely damaged books just being put in. We knew that they were put in as they were holding them, as opposed to them being damaged in shipping. I think that’s just a matter of training your employees. I know for many years, Diamond didn’t want their employees to know the value of the product.
Why is that?
MERKLER: They didn’t want theft, I believe is the reason they did that. But when you do that, they don’t know the value of the product which is incredibly important to many retailers. There is a fine line and you have to be able to trust your employees and make sure you’re training them properly in just the handling of the books alone. We’re a retailer and we’ve been doing it for 22 years and know how to handle a book. We had that ability to make sure that everyone was trained from the get-go. We weed out damages on the front end and then, as they’re picking, they also weed out damages. It’s very important to us that we make sure [retailers are] getting the best product they can.
Because Diamond has been handling these little details so poorly for so long, is that what essentially opened the door for Lunar? Was that the motivation to start your own distributor?
MERKLER: What motivated me was basically having the call to ask if we could get DC products into the stores. That’s what motivated me. [Laughs] I’m a retailer myself and Cameron and I crunched the numbers. We were like, “How many months can we go with Diamond not shipping us new product?” DCBS is a pre-order company, so every single week of new product we don’t get in, we are not making money. And, we also knew that there were about 40-50% of the stores still open in the country. We thought, “How many of those people are not going to be able to survive a month or two?” When DC came to us and other retailers saying, “Hey, could you help us out?” We were like, “Yeah!” We had to figure it out. It really was not-- I’m being absolutely honest about this. When they asked, we said, “Yes!” There was no question that we were going to help, but we assumed once Diamond came back full-force and started fulfilling again and they were back up and running, that we were just going to go back to being DCBS again. There was not this long-term expectation.
If you didn’t expect to do this, what changed?
MERKLER: DC asking us if we’d take on half the territory. That was a big part of it. They said, “We’d like you to go ahead because we’re going to sever ties with Diamond.” Once that happened-- I mean, we wanted to be the best even if we were only going to do it for two months because that’s just how Cameron and I are naturally. We want to be the best at everything that we do. Once DC came to us and said, “Hey, are you willing to do this multi-distributor model?” We were like, “Yeah, OK.” We’ve already put all of this time and effort and money into it. And now we have employees for the company, right? They are completely separate employees from our other businesses. We thought that we could give it a go. It’s not even “think” - we know we can give this a go. We’d done it for the last month or two and we knew we had a long way to go, but we understood it. We got it and we think we can be good at it.
LEIVIAN: In some ways, it’s surprising that we’re even able to have this conversation today. For all the years that I’ve had Floating World, the conversation was, “Diamond’s a monopoly. I wish they weren’t a monopoly. I wish that there was someone else to come and do it.” I would think that for all of Diamond’s problems, there’s a lot of things they do very well. I thought no one would have wanted to do that. No one has the infrastructure to do what Diamond is already doing. So, kudos to Christina and Lunar, you know? They’ve been the ones to step up and take on this task. I think it can be cool.
MERKLER: I have a publisher who told me several years ago, “Why don’t you just distribute?” I said, “Oh no, we couldn’t do that. We don’t have millions of dollars to start a distribution company.” That has always sort of been the perception, I think, within the industry. If you were going to do it, in order to fight against a Diamond, you would have to have this giant infrastructure. I guess it organically happening works just as well. [Laughs]
LEIVIAN: I mean, no one wants to see Diamond go under. No one wants to see Diamond get smaller necessarily.
No one?
LEIVIAN: OK. [Laughs] I want Diamond to do well and I want Lunar to do well. That’s the comic market. I don’t want the comic market to shrink, you know?
MERKLER: I completely agree with you. That’s why when you asked about exclusives earlier, we’re not asking anyone to be exclusive. We feel competition is good. We are happy to be in the space and we feel that the distribution space will be better if you have more distributors and they can really show people what they can provide. May the best distributor win, on most accounts. It’s also great because, if I, as a distributor, have product and I all of a sudden run out for some reason, if another distributor has it, it’s great for publishers. It’s great for publishers and retailers to have other options. Ideally, you would do that, right? There were so many times, especially with independent publishers, that I was only purchasing them through Diamond. I really didn’t know how to get them any other way. It was all buy/sell, so they would get it in and sell out of it really fast then never offer it again. I would have customers who would want something, but I was so busy working and getting everything sold and getting taken care of all the time that, if I had another distributor that I knew I could get that from, it would have been amazing.
KACZYNSKI: I think this is a great point. It kind of makes the whole distribution system a little bit more anti-fragile. Potentially there’s multiple channels to get a single product. If it does sell really well with one distributor, there’s another option where there may be more stock.
LEIVIAN: Each of those distributors is a warehouse.
KACZYNSKI: Exactly.
LEIVIAN: Maybe for one, the discount is five percentage points higher or whatever, but if they have the book ready to go and the other one is backordered, you can still get the book from them.
It has to be a little exciting attempting to take on a monopoly. [Laughter] Am I wrong?
EHRLICH: Diamond has honestly been really amazing to us. They put up with way more bullshit than anyone thought they would. They let us take part in Free Comic Book Day and I think we’re the smallest publisher ever to do that. I’m not here to shit on Diamond, but I do really like that there are now options for everyone involved and for retailers to decide what works best for them.
MERKLER: Diamond cares just as much about the market as we do.
Ok.
MERKLER: They really do.
Isn't being the David in a David and Goliath situation a little bit thrilling?
EHRLICH: Absolutely. [Laughter]
Do the three publishers here have any concerns with Lunar thus far?
EHRLICH: One thing I really appreciate is that we were really direct about being excited about all our plans, but there’s a Shakespeare line about spilling your tea when you’re trying to drink it: “Twixt the cup and the lip.” If this all goes to hell, we’re not locked into anything. This isn’t a long-term exclusive arrangement. We’re going into this ready to do our best and kick ass and be amazing. As an individual and as a business, I feel like good relationships are based on consent and that can be withdrawn if something doesn’t work out. We are going to distribute our books through Lunar, but if it sucks, we’re going to stop doing it. But we’re not expecting it to suck. I think it’s cool that Lunar has the ethics to give us that freedom and are not trying to lock us into doing this for the next 10 years, even if some unexpected, horrible thing happens. Honestly, that’s refreshing and how we work as a business too. The people that we work with are welcome to stop working with us. I don’t really see that in the book industry from anyone and it’s a really important thing... I’m not saying this as well as I'd like to, but Lunar has really been ethical in their approach to this conversation. It makes me a lot more comfortable going into it. There’s not a big, scary contract that has the potential to ruin our lives at every turn.
KACZYNSKI: Everything Avi said, I agree with. I don’t know if I have any questions for Lunar at this point. I’m excited to get started and I’m sure questions will pop up in time. I’m pretty excited about this whole process and new ways of getting our books out there.
EHRLICH: There was one thing I was hoping we would touch on. I was really excited when Christina was talking about how they built a whole new warehouse for this. It’s not just the existing DCBS network, but a whole dedicated distribution element. Christina, can you speak to that? You guys are doing this on purpose and deliberately to be in this space. It’s not just ad hoc, and I think that’s really important for people to know about.
MERKLER: Lunar started in the back of the DCBS building. There was a 13-thousand-square-foot space in the back that DCBS was not using in part of the building we own in downtown Fort Wayne. That is what Lunar took over initially because it was like, “Hey, for the next couple of months until Diamond comes back, we’re going to distribute some product.” That’s what it was. I probably should bring up-- and I’m not saying that no one does this, but it is a very family-oriented type of business. We really care about our employees’ health and welfare and mental health and safety and comfortability in their own warehouse. That part of the warehouse was not air-conditioned. We invested in air conditioning, which was a considerable amount of money, just for those few months even. Our employees were comfortable and were able to handle the product better. Once we found out that we were going to take half the territory over the country, we were like, “Wow, we need more space!” So we split and kept what was at the downtown location and also leased another space for the last year that was twice the size we were working with. We were actually fulfilling out of two different spaces so we could properly handle the DC product and receive all of their backlist. Once we knew we were taking it over in January -- the whole kit and caboodle -- we said, “Wow, we need to make an investment.” An even bigger investment than what we already had. To us, it was huge. We had spent a couple hundred thousand dollars on racking so that we could properly pick things and it could be more efficient. But we knew we had to take it to the next level. We actually started purchasing a piece of land and were in the process of getting that land zoned and had plans drawn up for a new building, then we realized we couldn’t wait another year for that to happen. We ended up leasing a brand new space that had just been built for Lunar and that is where we are housed right now. It is five times the space we had previously and that warehouse has been functioning since the end of June. We just recently moved the office staff over a few weeks ago and put a little micro-market in the breakroom and are putting sofas and we have a little library in there. We are really trying to make it a great place to work and that’s what is important to us. The happier the employee, the happier the recipient of our products, right? We have made an incredibly major investment - it will be several million dollars by the end of this lease just in the leasing of the building in addition to even more racking that we purchased and machinery that we need to make us be the most efficient that we can be.
All of this just for a few comic books. [Laughter]
MERKLER: We hope that it becomes more and more comic books. That’s the whole point of this.
LEIVIAN: The first step for Floating World is starting the solicitation process and to start getting some orders through Lunar to see what that looks like. It feels really cool to be on the ground level of this new distribution model and I can give feedback as a retailer and as a publisher. As a retailer, I can talk about what the ordering process looks like, the FOC [final order cutoff] process, and they can be responsive to that. Then as a publisher, I’m probably projecting a lot of optimism onto Lunar. It can just be this blank slate to improve comics or whatever. In some ways, maybe that’s true. I can come to Christina with ideas and one of the first ones was, “How do you feel about bringing on Uncivilized and Silver Sprocket as like-minded publishers?” She was very open to that. I guess a lightbulb just went off. If that can happen, who knows what else can happen? Maybe this will signal to other publishers to look at Lunar as this different sort of distributor. If it’s a zero-sum game where they are just taking the same customers from Diamond, that’s not really growth. But from talks that I’ve had with Christina and talks that I’ve had with Tom and Avi, we’re like, “How can we get comics into new places?” And maybe not even places that you’d normally consider a comic shop. Why aren’t there comics in these other types of boutiques or specialty shops or by the movie theater? Right now, to get a comic you have to go into this special comic store. Wouldn’t it be better if they were a little more accessible and they were in more normal places besides comic stores?
MERKLER: Like your hair salons or--
Whoa, hair salons?
MERKLER: We’ve talked about it. My warehouse manager and I have these discussions all the time and the upper-management team does. He told me a couple years ago, “Why aren't we putting trades of Snotgirl in tanning salons and hair salons?” Something like that would make sense. People would be geared toward that and then you could branch off from there. That was just an example he made. I was like, “Yeah. Why wouldn’t we just have it in every store you could possibly think of?” Why wouldn’t you have it in every boutique? One of the retailers recently is doing a kind of pop-up shop in a PX [post exchange retail store for US Army members], which is a military store. I was like, “That is fantastic! Why don’t we have a spinner rack in every PX in the country?”
LEIVIAN: That’s where I got my first comic books as a kid.
MERKLER: I didn’t until I was dating Cameron, but I went to a PX because my dad was in the army for 21 years. I thought, “Oh my goodness, this would be amazing!” We're actually still trying to figure out the logistics of that. It’s not easy. But we really do want to think of those things and bring those to our publishers. We want to bring ideas to get comics into other places. It’s not that we don’t want people walking into brick and mortars because we absolutely do. I’ve said this for the last 10 years, but I was never worried about digital because digital is only going to expose people to things and then they are going to seek out the other things. Or, if they weren’t going to buy them from me anyway, they are at least going to buy them digitally and are going to make the publishers healthier just for bottom-line reasons. But can you imagine people getting mad about Target or Walmart or whatever, but if somebody goes in and picks up the first trade paperback of whatever series and then they want more, where are they going to go? They are going to go to a comic shop because Walmart and Target are not going to have them. There really is something to be said about just exposure in general.
LEIVIAN: Yeah, I try to see it as an all-ships-rise type of situation with all these different channels.
MERKLER: Absolutely.
LEIVIAN: You’ve got to legalize comics. Get them out there. Don’t just hoard them in the comic shops.
Do you hope that with these three publishers coming to Lunar, some other good independent publishers become interested?
MERKLER: I would love that. As far as I’m concerned, I just want to have as many great options for my retail accounts as possible. It helps them and it also helps their bottom line. If they find more publishers they think are going to sell well and that do sell well, then they can add those to their shipments. Like Jason said, the bigger your shipment, usually the better your pricing and better your margins are. I’d love that for all of my accounts. That’s why, eventually, we will want to wholesale Marvel. If it’s less expensive for them, the retailers will be able to say, “I’ll go to them.” The more times they come to my site to place an order, the more they’ll see the independent publishers right there in the FOC.
LEIVIAN: That will be cool a year or two down the road. If Lunar isn’t just a hassle to get your books from but it’s differentiated from the other distributors. Lunar could have this curated selection of publishers to look at and a new shop could say, “I want to expand my indie comics selection.” Then everyone will know that you look at Lunar’s choices because Lunar’s already got it curated and has all these great publishers with books that will sell well in your store.
Most importantly, did you three publishers discuss a team name when you decided to all come aboard together?
LEIVIAN: I think Avi was going to make a catalog with some sort of wrestling image, but I forget. I don’t know if we had a team name.
Something to consider.
KACZYNSKI: Working on it, working on it.
