Greetings!
I’ve always held the belief that whatever challenges you face today are preparing you for something bigger in the future. These tests serve to build your confidence and provide you with the experience to help you to make the right decisions when it counts. Rather than look at an uncomfortable situation as a negative, I lean into it knowing that there will be a purpose revealed to me at some point when I’m ready to receive the lesson.
I also accept that as a business owner it is unhealthy to always win. Situations and scenarios should not always work to your favor. If they did, then there is no growth or learning and you may become entitled or sloppy. Things that do not work out were not meant to be. If I pursue a project and spend countless hours chasing after it, just to fall flat, I see it as my moving forward in other ways. No time is wasted and in the future there are opportunities that will arise from the failures of today.
Having this faith has always been helpful to me. That I believe it to be true allows my brain to move forward instead becoming paralyzed when faced with failure.
Over these last few years my belief in myself has been tested many times over. Since the pandemic hit these tests have arisen over and over again. As someone who has run a business for twenty years I can assure you that I don’t take any of our success for granted. It doesn’t take much to lose a business, even in the best of times. I’ve always been aware that it could all go away tomorrow, and that past success doesn’t guarantee future success.
I had all of these big plans for our twentieth anniversary with a full line of books coming out monthly throughout 2022. I quickly realized that I had to focus on adjusting and changing all of my plans. The ongoing issues that face us all continue to remind me that the flow of the river of life changes so suddenly and so often that I keep needing to change boats and paddles. Planning in advance doesn’t necessarily help. I’ve always been one who welcomes and gets a rush out of change. It keeps my brain stimulated. These last three years, since the pandemic hit, have been tough. I wouldn’t call it fun, and it has not carried the same type of usual excitement that I get out of challenges. There have been moments of high stress, which I will offer some insight into.
Prior to the pandemic the costs of business and scheduling were more predictable. I would deliver a book to the printer in Hong Kong and it would be delivered to our warehouse in California three months later. In rare cases it would take three and a half months. The shipping of a full cargo container of books would cost approximately $2500 after any processing fees and taxes and local truck delivery. During the peak of the pandemic this cost for a single container escalated to $26,000. The price is going back down now and is currently hovering at about $10,000 and it will drop more as the year progresses. I could write a full blog on the reasons why this happened and why I think the prices will eventually drop back down, but that is another topic. The focus is that our costs to have books printed and delivered skyrocketed. Especially as you factor in the paper costs rising about 40%. Imagine, a book that previously cost about $23,000 pre-pandemic to have made now costing upwards of $40,000 in less than a year.
What I did in March 2020, since I predicted that the shipping and manufacturing costs would explode, is I reprinted and had a batch of our books printed just as the pandemic hit. The printers had no work and needed business. I locked in good prices on paper and had a bunch of back stock printed. By the time our stock was delivered to us in the fall of 2020, manufacturers realized that people were still buying and were desperately trying to ramp back up. That’s when the shortages began in earnest and there weren’t enough cargo containers to handle the influx of goods coming to the west coast. This decision that I made early in 2020 saved us. We had a healthy amount of stock on our back list titles and it kept us afloat. This was a calculated risk, but it turned out to be a good call.
The other thing that got us through the pandemic was our website that was set up for direct orders going as far back as 2002. I worked at book stores and comic stores back in the nineties and had over a decade of convention experience helping friends at their booths. I’ve been involved in mail order transactions since the nineties. I knew that I wanted a solid website when I started my business in 2002 and allowing for a direct ordering system online. When the pandemic hit, our website sales took off. We had a solid system in place to handle the influx of orders and the stock to meet demand.
The other thing that saved us was using Kickstarter. Getting advance support and pledges from people helped us to cover these quickly rising production costs. It was enough to cover our warehouse rent, paychecks, artist royalties, printing and the extra shipping costs. I greatly reduced my salary and even did not pay myself on some months. Our profits took a hit, but I was happy to have a business that was surviving and where all of our bills were being paid when so many others were having a tough time.
Another thing set us up for the pandemic. In the fall of 2019 I felt that a recession would hit in the spring of 2020. This was due to my observation that cheap loans were readily available to businesses and the average debt for companies was at a high point. Once a recession hits, I felt that as profits would go down, businesses would be using their limited funds to repay debt and struggle through 2020. I made sure we had no debt and increased our savings in case things went soar in 2020. I was wrong about the recession since the pandemic hit, but my decision to better position our finances set us up to invest in our back stock with the printer in 2020.
Then, in the fall of 2021 some bad news hit us. Our printer of 17 years went out of business. I had such a good relationship with them. Due to the trust, I did not pay for printing or shipping bills until 30 days after the books arrived. As you can recall, it took three months to get books printed and delivered, then 30 days later I would pay the shipper and printer using our pre-orders funds. I would print 2-3 books at a time, and print about 8-12 books a year.
Not only did so many wonderful people who I worked with for years lose their jobs at the printer, I lost this relationship that I had built up over 17 years. I tried our backup printer, but they were nowhere to be found. I tried a printer in Canada. They could not take on any new clients since they were overwhelmed. The U.S. was not an option since the costs here at home are not affordable and the printers here are not set up for high end art books. In pre-pandemic times a new printer would fight for my line of books. Now, the printers could not handle the demand and were not even replying to emails. I found a printer in Belgium for Tyler Jacobson’s book. The costs were staggering to get it printed and delivery took seven months, but we got it made and into the hands of our Kickstarter supporters. I’m so grateful that the campaign did well. It just covered all of the costs.
Then, in December 2021 one of my long-time contacts with the printer who had closed in Hong Kong emailed me. She was with a new printer in Hong Kong. She knew how particular I am about printing and set me up with a new company there. I turned in our Franklin Booth, Brad Kunkle and Lupente: Flesk Artist Showcase (this book I have not advertised yet and will tell you all about it soon), on February 1, 2022. I negotiated fair terms, they ordered the paper, got the books printed and here we are 7-8 months later and they are arriving at the Oakland port in California soon.
Early this year, I made a conscious decision to hold back on delivering any of our other books to the printer for six months. A huge risk since this greatly affects our cash flow. I knew back in December 2021 that a few things would happen this year. The first was that manufacturers would print too many goods, that consumer spending would slow in 2022 as people started to travel and go out more, and that businesses would be stuck with too much product and have to sell at a discount to clear out inventory. Then, the printers and shippers would be more eager for work again and that prices would start to drop and turnaround time would improve. I focused on making new books here in the background, then pushed almost our entire line of books to 2023. But, this would never have been possible if I did not plan for it and make adjustments and certain decisions in advance. It was a big risk. But, I have faith it will pay off for us.
Currently, the biggest challenge we face is cash flow. As I mentioned, in the past books took 3 months to get made and delivered to us. Now it is taking 7 months on average and the base costs are much more expensive. Instead of our nice cycle of 2-3 books every quarter, we have 2-3 books every 7 months. Funds are being stretched out far greater than ever before. Also, paper mills and printers are struggling with cash flow. If a printer has to wait seven or eight months to get paid from a publisher, so does the paper mill. They are running out of cash, so they are all asking for deposits to help them manage their cash flow better. This is totally reasonable and understandable. This will probably continue until late next year. These deposits have resulted in thinning out our immediate cash flow. I do think it is important for printers to take deposits, since it holds publishers accountable. Otherwise, the publisher may over order or get too far ahead of themselves. It helps both sides. The printers may also be concerned that some publishers may not be able to pay their obligations later this year.
A challenge that I foresee for the future relates to our dwindling stock on back list titles. It’s a big positive that so many of our titles are getting thinned out. Now, it’s just a matter of replenishing the stock while navigating the best time to have them printed. Reprints tend to have smaller print runs. At today’s prices it is not viable to have them made. I’m watching things closely to make a decision regarding when and what titles can be brought back to print. For instance, The Big Tease by Bruce Timm could use a new printing.
At the moment I have quite a batch of books that are done and ready for the printer. As stressful and wild the last few years have been, we have managed to make a lot of really cool books that will be released in the future. As soon as the Franklin Booth and Brad Kunkle books arrive and we ship out all of the pre-orders, I will then make a pair of new announcements and run a new Kickstarter. I don’t like to take pre-orders for more than two books at a time. It limits how many books we can print right now, since I’m just a guy running a little publishing house, but I’m here for the long haul and aim to have a robust and solid company that makes nice books well into the future. Our saving grace has always been the support of people buying our books and placing pre-orders. Each and every day I am grateful to each and every person who has ever bought one of our books. My passion for books, my enjoyment in working with the artists, and my pleasure in getting our books into the hands of people keeps me going.
I’ve also been very lucky to have Vicky here working tirelessly at the office. She started as someone who occasionally came in to help pack books nearly five years ago, to now being an invaluable part of this business, including book design, photography and website updates. Good things don’t happen without the help of good people.
With my eternal thanks,
John
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Text copyright © 2022 John Fleskes. Photos by Vicky Lien and John Fleskes and © 2022 . Videos © 2022 Flesk Publications. Artwork © 2022 its respective artists. All rights reserved.