The direct market is the dominant distribution and retail network for North American comic books. It consists of one dominant distributor and the majority of comics specialty stores, as well as other retailers of comic books and related merchandise. The name is no longer a fully accurate description of the model by which it operates, but derives from its original implementation: retailers bypassing existing distributors to make "direct" purchases from publishers. The defining characteristic of the direct market is non-returnability: unlike bookstore and newsstand distribution, direct-market distribution prohibits distributors and retailers from returning their unsold merchandise for refunds.

Contents 1 History 1.1 1970s 1.2 1980s 1.3 1990s 1.4 2000s 2 Impact 3 Major differences 4 Direct market distributors 4.1 Current 4.2 Former 4.2.1 Canada 4.2.2 United Kingdom 5 Notes 6 References

[edit] History

[edit] 1970s

The Direct Market, or Direct Sales Market, was created in the early 1970s in response to the declining market for comic books on newsstands. Fan convention organizer and comic dealer Phil Seuling approached publishers in 1972 to purchase comics directly from them, rather than going through traditional periodical distribution companies. Unlike the newsstand, or ID (for Independent Distributor) market, which included drugstores, groceries, toy stores, convenience stores, and other magazine vendors, in which unsold units could be returned for credit, these purchases were non-returnable. In return, comics specialty retailers received larger discounts on the books they ordered, since the publisher did not carry the risk of giving credit for unsold units. Instead, distributors and retailers shouldered the risk, in exchange for greater profits. Additionally, retailers ordering comics through Seuling's Seagate Distribution (and within two years, through other companies) were able to set their own orders for each issue of each title, something which many local IDs did not allow. This ability to fine-tune an order was crucial to the establishment of a non-returnable system.^[1]

Direct distributors typically were much faster at getting the product into the hands of their customers than were IDs: a direct distribution warehouse generally had re-shipped a weekly batch of comics or delivered it to local customers within a day or two (sometimes within hours) of receiving the books from the printer. By contrast, most IDs would usually take two or even three weeks to do so, though some moved more quickly. This factor was a strong drawing card for retailers whose customer base consisted principally of fans eager to see the new issues each week.

Finally, another factor in creating demand for direct sales distribution was that many IDs refused to deal with comics specialty shops or with any retailer who dealt in back issues on any terms at all, fearing that used comics could be purchased by these shops from readers for pennies, and then cycled back through the system as returns for full credit at a profit.

By the mid-1970s, other direct sales distribution concerns had sprung up, mostly regionally based (Donahoe Brothers in the Great Lakes region, Pacific Comics Distributors in Southern California, and New Media Distribution/Irjax in the Southeast were all operating by early 1974), essentially replacing the order-taking and fulfillment functions of newsstand distributors for the infant comic shop specialty market. For several years, Seagate retained an edge over its competitors in that it was able to provide "drop shipping" (the shipment of an order directly from the printer to the retailer) to its customers for quantities of 25 or multiples thereof per issue, while the newer distributors had to use more conventional methods, putting together customer orders and re-shipping or delivering them from their own warehouses. Threats of legal action and the need for retailers to order very precise (and sometimes very small) quantities of items ended this practice for all but the largest customers by the end of the 1970s, and extended the ability to provide drop shipping to those large customers to all the direct distributors — by which time several of the newer distributors had multiple warehouses.

Newsstand distribution through the IDs continued at the same time (and indeed remained dominant for years afterward, on its conventional returnable, low-discount terms).

[edit] 1980s

By the mid-1980s, publishers began to produce material specifically for the new market, series that would probably not sell well enough on the newsstand, but sold well enough on a non-returnable basis to the more dedicated readers of the Direct Market to be profitable.

Several of the new distributors lasted a relatively short time, and were succeeded by more competitive organizations; with no continuity of ownership and only limited continuity of personnel, it would nonetheless be fair to say that Diamond Comic Distributors replaced New Media/Irjax and Capital City Distribution largely replaced Big Rapids Distribution in the marketplace.

By 1985, the number of direct distributors in North America peaked with approximately twenty companies, many of them multi-warehouse operations, purchasing product for resale to retailers directly from either DC Comics, Marvel Comics, or both. There were also an unknown number, probably in the dozens, of sub-distributors who bought DCs and Marvels from these larger companies (and often the products of other, smaller publishers direct from those publishers), and re-sold to retailers. Most though not all of these sub-distributors were in cities in which the direct distributors themselves did not (at least as yet) have warehouses, including Philadelphia, Boston, Columbus (Ohio), Madison (Wisconsin), Lansing (Michigan), Indianapolis, and Berkeley (California). Many of them were eventually absorbed by the companies which had been their principal suppliers.

From the mid-80s to the mid-90s, nearly every major urban area in the United States had at least one (and sometimes two or three) local direct distribution warehouses that functioned not only as distribution points for pre-ordered weekly shipments, but also as what could be described as "supermarkets for retailers", where store owners could shop for reorders and examine and purchase product that they might not have ordered in advance.

[edit] 1990s

As newsstand sales continued to decline, the Direct Market became the primary market of the two major comics publishers (DC Comics and Marvel Comics).^[1] In the late 1980s and early 1990s, as the popularity of comics collecting grew, many new comics shops opened, and existing retailers (such as sports card shops) joined the Direct Market, carrying comics as a side business. By this time, Diamond and Capital City each had in the neighborhood of twenty warehouses from coast to coast, and both were functioning as fully national distributors. Several of their larger remaining competitors, notably Glenwood, Longhorn, and Bud Plant, had either sold out or gone out of business.

Such rapid growth (due partially to speculation) was unsustainable, however. The market contracted in the mid-1990s, leading to the closure of many Direct Market shops. Diamond and Capital City began closing local warehouses, moving from a decentralized model in which many local warehouses provided full service to a given area to a centralized one with a few shipping hubs and no local walk-in service at all.

Marvel Comics purchased Heroes World, a regional distributor, with the intention of self-distributing their products; Heroes World also stopped carrying other publishers' books. Other distributors sought exclusive deals with other major publishers to compensate for the substantial loss of Marvel's business. DC Comics, Image Comics, Dark Horse Comics, and several smaller publishers made exclusive deals with Diamond Comic Distributors. Most other distributors, including Capital City Distribution, Diamond's main competitor at the time, either went out of business or were acquired by Diamond.^[2] Others established niches — such as re-orders — in which they could compete. When self-distribution failed to meet Marvel's objectives, they also signed an exclusive distribution deal with Diamond, which had by then become the primary supplier for the Direct Market.

[edit] 2000s

In the early 2000s, the bookstore market began to challenge the Direct Market as a channel for sales of increasingly popular graphic novels. Meanwhile, Diamond has continued to dominate direct-market distribution, with the 2006 collapse of FM International leaving even less competition than ever. However, the growth of interest in comics among mainstream booksellers and book publishers has led to several publishers arranging for bookstore distribution outside of Diamond (for example, Tokyopop through HarperCollins,^[3] or Fantagraphics through W. W. Norton),^[4] while Diamond has created Diamond Book Distributors.^[5]

[edit] Impact

The development of the direct market is commonly credited with restoring the North American comic book publishing industry to profitability after contraction of the market in the mid 1990s. The emergence of this lower-risk distribution system is also credited with providing an opportunity for new comics publishers to enter the business, despite the two bigger publishers Marvel and DC Comics still having the largest share. The establishment and growth of independent publishers, beginning in the late 1970s and continuing to the present, was made economically possible by the existence of a system that targets its retail audience, rather than relying on the scattershot approach embodied in the returnable newsstand system.

The Direct Market has been criticized for fostering a closed "ghetto" or elite for comics, arguing that most Direct Market retailers are specialty shops patronized primarily by existing readers and highly motivated fans, without the broader exposure of the merchandise that newsstands and other retailers once provided. Some claim that the current incapability of Direct Market to reach new readers and customers, might be cannibalizing the existing market out of existence.

It should be noted that the Direct Market was neither intended nor designed to be the primary vehicle for the distribution of comic books, but rather as a supplementary system servicing specialty outlets. The failure of the former primary system of distribution (the network of local IDs), which had itself been declining for many years by the time the Direct Market had had any significant impact, left the direct sales distributors as the industry's principal system of circulation, not from design but by accident.

[edit] Major differences

• Condition: A Direct Market retail outlet (or "Direct-Only store") usually attempts to maintain its inventory in good condition. Its shelves are often the full height of the comic book, whereas the wire racks of grocery, drug and toy stores were typically only half the height of the comic books, resulting in bent spines and dog-eared pages.
• Content: Direct-Only stores catered to older, more mature audiences, and thus one could often find material deemed too offensive (due to graphic violence, nudity, language, drug use, etc.) to be sold in grocery/drug/toy stores. In addition, due to the non-returnable nature of direct sales, Direct-Only stores contained a substantial archive of back issues.
• Price: The older, more mature customers of Direct-Only stores were typically willing to pay several times more than the average customer of a grocery/drug/toy store. Cover prices approaching (or even exceeding) $5.00 were common in the mid-eighties.
• Knowledge: The proprietor of a Direct-Only store was often a collector himself, which meant he was quite familiar with his inventory. Customers often had the option of phoning their orders in ahead of time, and by the time the customer arrived at the Direct-Only store his order would be set aside behind the counter, "bagged and boarded." (Each comic book was placed in its own polyethylene or PET film sleeve and supported by an acid-free cardboard backing board.) Direct-Only store proprietors would often arrange their inventory by publisher and/or genre, as opposed to the haphazard messes at grocery/drug/toy stores.

[edit] Direct market distributors

[edit] Current

• Diamond Comic Distributors (Baltimore)
• Haven Distributors formerly Cold Cut Distribution^[6]
• Last Gasp (San Francisco)

[edit] Former

• Charles Abar (Belmont, California) — acquired in 1982 by Bud Plant Inc.^[7]
• Action Direct (Kansas City)
• Alternate Realities/Mile High Comics (Denver, Colorado) — wholesale distribution operation acquired in 1987 by Bud Plant Inc.
• Big Rapids Distribution (Detroit, Michigan) — began circa 1970 focusing on the distribution of underground newspapers, radical literature, and underground comics. Responsible for the unusually good coverage that underground comix and underground papers got in the Michigan area in the early 1970s, when they could be found in most full-service newsstands there. Big Rapids' entry into mainstream comics distribution came in early 1975, when Donahoe Brothers Inc. of nearby Ann Arbor went under. (Up to that point, Big Rapids had bought its mainstream comics from Donahoe Brothers.) At its height, Big Rapids was an alternative independent distributor in the Detroit and Central and Southern Michigan areas, selling a full line of magazines and paperbacks, as well as comics. Went bankrupt and their assets were liquidated in 1980.
• Bud Plant Inc. (Grass Valley, California) — wholesale distribution operation acquired in 1988 by Diamond Comics Distribution
• Capital City Distribution (Madison, Wisconsin) — acquired in 1996 by Diamond Comics Distribution
• Comic Kingdom (Detroit, Michigan) — acquired by Glenwood in early 1980s
• Comics Hawaii (Honolulu, Hawaii)
• Comics Unlimited (Staten Island, New York)
• Donahoe Brothers Inc./Comic Center Enterprises (Ann Arbor, Michigan) — The second direct distributor (pre-dating both Pacific Comics and New Media Distribution by a month or two). The Donahoes had been in business for about a year, dealing first with Marvel Comics, then Warren Publishing, and finally (and only for about two or three months) with DC Comics. Accounts acquired in 1975 by Big Rapids Distribution.
• East Coast Seagate Distribution (Brooklyn, New York) — out of business in 1984
• FM International
• Friendly Frank's (Gary, Indiana) — acquired in 1995 by Capital City Distribution
• Glenwood Distributors (St. Louis, Missouri) — out of business in 1987
• Heroes World (New Jersey) — acquired in 1995 by Marvel Comics, and out of business soon thereafter
• Longhorn Books (Texas) — becomes Action Direct?
• New Media Distribution/Irjax (Florida) — out of business circa 1983
• Pacific Comics Distributors (San Diego, California) — assets acquired in 1984 by Bud Plant Inc. and Capital City Distribution
• Second Genesis Distribution (Portland, Oregon)
• Sunrise Distributors (Los Angeles, California) — run by Scott Mitchell Rosenberg, out of business circa 1988.^[8]

At least two other direct distribution companies existed, other than those listed above: one in Georgia, and one in New York following the demise of Seagate. There may have been others.

There were also a large number of sub-distributors, who bought their mainstream comics from one of the above companies but many of whom were on direct terms with one or more of the smaller or underground publishers. A few of these were:

• The Comic Distributor (Lansing, Michigan) — started by Jim Friel in 1975 and acquired by Big Rapids Distribution in 1979. (The name "The Comic Distributor" was later taken by Mark Hylton of Comic Carnival.)
• Common Ground Distributors (Berkeley, California]] — started by Bob Beerbohm in 1977 or 1978 and initially supplied by Big Rapids. Acquired by Capital City Distribution in 1982.
• Destiny Distributors (Seattle and Vancouver) started by Phil Pankow in the early 1980s, and initially supplied by Bud Plant. Acquired by Diamond Comics Distribution.
• Fat Jack's (Philadelphia, Pennsylvania)
• Isis News (Minneapolis, Minnesota) — acquired by Big Rapids Distribution
• Nova (Los Angeles, California) — acquired by Big Rapids Distribution
• Solar Spice (Boston, Massachussetts)
• Well News Co. (Columbus, Ohio) — acquired by Big Rapids Distribution(?); their personnel became the nucleus of an early Capital City Distribution branch
• Wisconsin Independent News Distributors (WIND) (Madison, Wisconsin) — run by Milton Griepp and John Davis, later acquired by Big Rapids Distribution

In the early 1980s, a trade organization, the International Association of Direct Distributors (I.A.D.D.) was formed, consisting of all the distributors who purchased product directly from either DC Comics or Marvel Comics, or from both.

[edit] Canada

• Andromeda Distributing Limited (Toronto, Ontario)
• Comex Distribution (Calgary, Alberta)
• Multi-Book and Periodical (Toronto, Ontario)
• Styx International (Winnipeg, Manitoba)

[edit] United Kingdom

• Slab-o-concrete
• Titan Distributors

[edit] Notes

[edit] References

• Hanley, Jim. "Comics Distribution: An Historical View and Predictive Query," Comicon.com (Sept. 18, 1999).
• Luttrell, Hank "Comic Book Distribution: A Modest Proposal", 20th Century Books
• Rozanski, Chuck. "Evolution of the Direct Market," Mile High Comics website
• Stewart, Alan "A Brief History of the American Comic Book Industry"
• "The Origin of the Comics Direct Market - 1994 interview with Ed Shukin" (html). ICv2. http://www.icv2.com/articles/news/5979.html. Retrieved 2008-03-06.