This valuable comment came from a reader regarding my post last Monday. I think it deserves its own response, where others stand a chance of seeing it:
Reader: I was gonna respond in the thread on Fleen, but I think it might be more valuable here. I may be mistaken, but I think you've said a few times that you encounter defensiveness with regards to your analysis. It seems, though, any time someone tries to debunk your findings, which you've invited them to, you adopt a similar tone. Just an observation.
Moving on. Wouldn't a more useful number be profit per sell-through-reader? I know you're going to reassert that I can stick any number I want in place of $5, [Thanks for paying attention -- BG] but it seems like without examining that number you're only looking at part of the whole. How can you say that above that is unjustly high without actual analysis? On Fleen, Howard Taylor gives some numbers that indicate he's getting $30/sell-through-reader/year, with a 5% sell through rate, which he mentions as his rate on Daily Cartoonist. Maybe he's the exception. I couldn't say.
Answer: Obviously, if I'm coming off as defensive, I've got to do better. I am considering reducing the frequency of posts so that there is more time to polish and comment on each one.
Regarding the model and the numbers I chose, I don't say that a number is unjustly high or low, because that would be subjective. I indicate when things appear high or low based on the data I have. In other words, I flag conclusions that lack support in hopes of attracting more data. If I say a conclusion appears fishy, all that's needed is solid data indicating that it is actually legitimate.
Which brings us to Howard Tayler.
His post on The Daily Cartoonist supports the 5% sell-through rate used in the model, but he reports a higher per customer, $30.00 pre-tax. He also indicates that he has been doing at least $20.00 for a long time and more recently is staying in the thirty dollar range. It's extraordinary of Howard to present his data publicly. For those who don't know, his comic is Schlock Mercenary.
Besides Howard's, one more reliable data point has come in for this variable: $10. So we'll start making a graph of all the data points I can gather in the coming month or so, and see what happens. Howard may be what's called an outlier, but his results are important. (The reason I suggest he may be near the top is because of a lot of so-so data talking about very low rates, such as $1. There are a lot of comics out there using services like Cafe Press, after all, leaving little room for profit.)
We might find that experience matters, and business skill, and design skill -- and I expect we will. It might be necessary to look at the data in two batches: what successful people are achieving, and what newcomers are achieving.
It would be useful to set aside other merchandise categories as well, and focus on what a t-shirt business can do, as a way of setting a baseline that is fairly consistent if the person is good at making and delivering appealing t-shirts. Right now I am still pondering the best ways to collect data without ruining my life or putting anyone on the spot.
Howard has kindly made his numbers public on numerous occasions. Profit per sell-through reader is undoubtedly a useful metric for tracking the appeal of your inventory to your actual customers, and also sheds light on pricing strategy. Readers should also keep in mind that I always said that some comics provide a living for their creators.