What the 'FOC'? How Final Order Cut-off Affects the Biz

As announced yesterday, Dark Horse and Image Comics will begin offering "Final Order Cutoff" to retailers next week. Previously, the service had only been available on DC and Marvel titles.

But what is "FOC?" And what does this announcement really mean to the industry?

"The very basic explanation is that FOC gives retailers about seven extra weeks to gauge demand for comics before they have to set their orders in stone," said Dirk Wood, director of marketing at Dark Horse Comics. "It's a tool that retailers can use that makes it a lot easier to gauge demand on their end."

More specifically, "Final Order Cut-Off" - introduced by Diamond and Marvel Comics in 2003 during the Bill Jemas era (DC joined the program in 2006) - allow retailers to not only increase orders 20 days before shipping (as they previously could before), but also decrease their orders as well, an option previously not available. Before FOC, retailers orders had to be placed 2 to 3 months before a title shipped and could only be adjusted upwards.

In other words, a once only one-way street now permits traffic to go both ways.

Giving retailers a little extra time for ordering sounds like a good deal, but the addition of FOC for Image and Dark Horse orders should not only benefit the retailer, but is expected to impact the publishers and their eventual customers too. Newsarama spoke to Wood, Image Comics Publisher Eric Stephenson and comics retailer Joe Field to find out more about the motivation for incorporating FOC -- and how it will affect the entire comic book industry.

- First, what does this mean for the retailer?

"There are so many factors that go into how a shop orders the myriad of titles being released," Stephenson said. "And only a fraction of the information that informs their choices comes from the monthly Previews catalogue. By giving retailers the freedom to adjust their orders right up until the date we set our print runs, we're allowing them to pool more data and make as informed a decision as possible."

According to Field, who owns Flying Colors Comics in Concord, Calif., this means retailers may be more willing to take risks on unknown comics from Image and Dark Horse.  

"It will mean better inventory control for retailers, along with a better 'risk/reward' ratio," said Field, who is also president of the retailers' organization ComicsPRO. "What I mean by that is retailers can be more aggressive in ordering first issues of untried series, and then be able to more properly gauge orders from issue #2 and up."

"If something is selling above expectations, they can order up," Stephenson explained. "If all the available data suggests something isn't performing, they can order down. No one wants to be stuck with books they can't sell, just as no one wants to be caught out when something sells more briskly than originally anticipated."

- How does FOC affect the publisher?

"There's a lot of evidence that it helps sales," Wood said. "Imagine if you're a retailer, and you have two months before something comes out. And you have to place your order for a certain comic. Let's say you think you can sell 100 of them. Well, over the course of the next seven weeks, if you have 200 people come in and ask for it, then you're going to get a much more accurate view of what you're going to need if you can adjust that order before FOC."

Of course, Wood added, this benefit would only apply to what he calls "quality" projects. "If there are projects out there that aren't as high in quality, FOC is going to potentially hurt them because retailers can cut orders quicker," he admitted. "But retailers are going to take a bigger risk up front if they can adjust that order later, so the quality products see a huge benefit because they have a better chance up front."

Or as Field said, "the hits will get bigger quicker and the misses will be winnowed a lot faster."

Field said publishers also get better and quicker feedback as to what is working at retail and what isn't. "Since Marvel and DC moved to FOC, sales from both of those publishers have become more predictable and profitable, so I would expect the same with Dark Horse and Image," he said.

Besides, Wood said, comics sitting unsold on the shelf may seem like a good thing for the publisher, since the retailer had to buy them up front, but it only comes back to haunt them later.

"What is hard sometimes for accounting people or other types to understand is that you don't want retailers sitting on a bunch of books," he said. "In the long run, it makes sense for them to sell through. They'll have more confidence in us as a publisher and more confidence in our products."

"And it may sound trite to say so," said Stephenson, "but what's good for the retail community is ultimately good for publishers. I think all publishers want to work with comics retailers as much as possible in an effort to keep the market healthy."

- What does this change mean to the customer?

"In a perfect world, it should be invisible to readers," said Field. "However, depending on how much prior sales information retailers have when making FOC adjustments, it could have some pretty noticeable effects.

"The way it is now with Image and Dark Horse, I look at the sales history of a particular title when I put together my monthly Previews wholesale order, and that info can be months old when the order cycle is a full month long," the retailer explained. "With FOC, I'll be looking at fresher sales info and can base future orders to more closely fit current sales."

Stephenson used the example of the high demand Image saw for Savage Dragon #137.  

"As retailers revise their ordering on successful titles [with FOC], there should be fewer issues disappearing from shelves right away so that we're not in a situation where, say, Savage Dragon #137 is out of stock at Diamond the week it hits stores," he said. "Just looking at that specific issue, which initially had a Barack Obama variant, retailers could have adjusted their orders to reflect the increased demand and we possibly could have avoided doing a second or third printing. Everyone would have gotten the books when they wanted, it would have saved retailers the headache of having to reorder several times, and for us, it would have been more profitable, because it's also cheaper to print copies initially than it is to go back to press multiple times."

However, Field said one thing customers should keep in mind is that if they don't get on board with a Dark Horse or Image comic until late, the reaction to that choice by the retailer will be more immediate than it used to be. "With retailers able to order more precisely the number that sells, it may mean that new readers will have to be more vocal about requesting to jump on specific titles to allow their retailer time to add them at FOC," he said.

- If it's so great, why weren't Image and Dark Horse doing this before?

"We've actually been in favor of doing this for a while, but some logistical work needed to be done on Diamond's end before this could happen," Stephenson explained. "Even though other publishers have been utilizing FOC for some time now, there was still an awful lot of market research that had to be compiled. I think first and foremost Diamond wants to look at the costs and the benefits and make sure it was the right move for everyone involved. The general consensus at the outset was that it was the right thing to do, but with any kind of change of this magnitude, it's always best to do your homework."

Wood said everything from the timing of print runs to the structure of distribution had to be analyzed and adjusted, so it wasn't as easy as just pushing a button.

"There was a lot of technical stuff that made it take awhile, but we've been working on this for a couple years," Wood said. "And we're just happy that we can finally do it."

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