Comic Book Distribution: A Modest Proposal
I have some ideas, some suggestions, I want to put on the table about comic book distribution. Before I do that, I'm going to write in a long-winded manner about the history of the modern comic book business, to put my ideas in context. Just so you know, so you can skip to the later section of this article if you want.
Since I’m a bookseller it shouldn’t surprise anyone that I’m interested in book distribution, but as a matter of fact I’ve been interested in distribution longer than I’ve had a bookstore. I have this theory or feeling that the business of distribution has an effect on the dissemination of information and ideas; has an impact on creativity in so far as it enables individuals to make a living creating publications; it really has a relationship to freedom of expression. But that is all a bit abstract and profound. I also like to collect stories about crimes committed by and for distributors. But that isn’t what I’m writing about today.
A Bit of Comic Distribution History
My point is that I’ve been a keen observer of book and magazine distribution since the 60s, and the changes and evolution -- and the problems -- that I’ve seen during all this time are fairly astonishing.
Take the distribution of comic books for instance. Even before I opened my first store, I started buying comics from a distributor. I was living in Columbia, Missouri in the late 60s and early 70s, and I was frustrated that my friends and I couldn’t find anywhere to reliably buy comics.
I called up the local newsstand magazine distributor, and asked if I could come out and buy stuff from them. What I was asking was really not kosher -- not illegal, exactly, but close to it. Well, I didn’t have a Missouri resale permit, a sales tax number, and I didn’t pay that distributor sales tax, so maybe it was illegal. I had heard some where that many magazine distributors in those days often had organized crime associations. The distributor’s owner or manager, or whoever he was, well, he did have me make out my checks to him personally rather than to the firm, so maybe I was part of his hustle. Or maybe that was how he got around the sales tax thing.
By the time I moved to Madison, Wisconsin a few years later, what came to be known as the comic book “Direct Market” was getting started. Newsstand distributors sold periodicals to stores at low discounts on a returnable basis. The direct market model had distributors buying comics from publishers on a non-returnable basis, and selling to specialty stores at a much better discount. More risk, more profit. I was far from ready to open up my own store, but I did walk into one of the earliest direct market comic book stores in the country, Capital City Comics, and ask the proprietor Bruce Ayers if I could buy comics from him in bulk.
Wow, you know, I really can’t pretend to summarize the history of direct comic book distribution in this little essay. That book is waiting to be written. By the time I was ready to open my own store in 1979, John Davis and Milton Griepp had formed what was to become one of the major players in the field, Capital City Distribution, right here in Madison, Wisconsin. Soon, there were many direct market distributors, operating somewhat regionally, but also competing nationally, even globally.
The 80’s and 90’s were interesting, exciting times for comic book creators, publishers, retailers and readers. Underground comics had their greatest success in the 70’s, actually before the direct market. Underground comics at first had their own dedicated distribution system, and evolved into a diverse range of small press comics. DC and Marvel still dominated mainstream comics, but even so other publishers came along with 4-color products which managed to find market share.
Competition between direct market distributors was fearsome. The largest distributors ate up smaller, failing businesses. Eventually, there were only two main direct market distributors, Diamond and Capital. This intense competition provided a fertile environment for comic book publishers.
For distributors, it was a competitive advantage to offer as many titles, as many choices, as possible. It was a situation which fostered diversity in publishing. But to larger publishers this seemed somehow unfair. Why, for instance, should the largest publisher, who creates the most sales and profits for distributors and retailers, have to share a catalog with any kid whose father could pay to print 2000 copies of a black and white comic? Each additional title line in those catalogs, the large publishers thought, represented more competition for their titles, and a diminished market share. At the very least, larger publishers thought that the distributor catalogs were too "cluttered" -- you know, with esoteric, sometimes eclectic titles that weren't theirs.
The Direct Marketing Model
The whole direct market, non-returnable distribution business model was innovative and revolutionary compared to the tried and true returnable system used almost exclusively in the larger world of book and magazine publishing. The direct market seemed to deal efficiently with some of the very troublesome problems in mainstream publishing -- notably, excessive returns and the associated waste. And non-returnable distribution looked easy.
Since Marvel, the largest comic book publisher, felt like it wasn't being treated fairly -- that is, deferred to enough, not focused upon enough -- it eventually decided to pull out of its relationship with the two remaining comic book distributors and take care of all of its own distribution. Marvel explained that it didn’t want its marketing message filtered through third party catalogs. The details of this whole affair I won't go into here -- although it is interesting! Tragic, comical, absurd, and ultimately a fiasco, but a history for telling another time.
One of the most immediate and profound effects of Marvel’s drastic action was that the other significantly sized publishers felt they had to go exclusive with one or the other of the large distributors in order to preserve their sales channels, and enhance their visibility. The five largest publishers all signed exclusive contracts, full of perks, with Diamond. Soon, Capital was floundering and had to be sold to Diamond as well.
When Capital closed down, the comic book field was left with what amounted to a monopoly for its distribution pipeline. Apparently this is what the larger publishers want, because it allows them the level of access to the retail landscape that they feel they need, and their contracts with the sole distributor insured them the service level they require.
Niche Marketing
People don’t seem as unhappy about “monopolies” now as when I was younger. When I had Civics class in high school they taught us monopolies were bad, illegal things. Now, it seems, Diamond is legal because, well, if for no other reason, comic book distribution is such a small part of book and magazine distribution that having sole control over that tiny segment isn’t significant.
However, some industry insiders were certain that a large company like Diamond, with inflexible ideas, terms and policies, would leave a viable market niche for smaller distribution services, probably specializing in smaller publishers, back orders and re-orders.
One of the best, most successful and longest lasting of these small comic book distributors, founded by a small group of former Capital City employees, Wayne Markley, Jerry Stoltenberg and Bill Helgeson, was FM International.
Specializing in small publishers and filling reorders has proven to be a very difficult business, however. Typically, whenever a publisher was successful for FM, some sort of exclusive contract or relationship with Diamond was established which took that business away.
To list just a few examples, DC and Dark Horse trade paperbacks are available through Diamond to comic book stores, but they are also available to any book distributor or book store who wants to sell them. They were not available to FM. CrossGen was for a while successful for FM, went exclusive with Diamond, but then soon went bankrupt. IDW, one of the more recent examples, was an important success for FM, but then entered into an exclusive relationship with Diamond.
In fact, Diamond has done a less than wonderful job with small publishers, and seems frequently to be completely uninterested in filling re-orders. Diamond has recently announced new policies which make it seem they are even less willing to deal with small publishers, guidelines which are minimum per-title sales which must be met for Diamond to be willing to write a purchase order. The reason for these policies is simple of course. Small re-orders and low circulation titles aren’t profitable enough. And there is no competitive reason to offer a more diverse product line if there is no competition.
Alternative Models
From my view point, there is a real need for alternative and back up comic book distribution services. The thing is, small distribution services don’t seem to be a viable business model when all your most successful vendors are being stripped off the top of your sales. When the partners at FM told me that they were planning on closing down at the end of 2005, I started obsessing with trying to think of a different business model that might work.
How about this: a distributor that specializes in consolidating wholesale orders for a number of small publishers, selling to Diamond and large comic book retailers? This idea resulted from my misunderstanding of Diamond’s new ordering policy. At first I had assumed that they were imposing sales goals on a publisher’s whole monthly list, so I thought a service which consolidated a number of small publishers into one purchase order might be useful. Distributors like this are common in the trade book publishing world. Turns out Diamond's sales minimums are for each title line.
Maybe a remainder distributor? Might be a useful side-line for some firm, but I don’t think the comic book field is large enough for a business which deals exclusively with close outs and mark downs. Anyway, in order to protect their normal retail market, publishers who remainder frequently like to sell into “different” markets, and the regular book trade remainder houses probably do this just fine.
Finally, let me outline a business plan I think might be useful to the comic book field. It shouldn’t surprise anyone that it is based on a situation common in mainstream book publishing.
Many book publishers invest in creating their own distribution infrastructure. They use these systems to sell to other distributors, as well as selling to book store chains, independent bookstores, even (and with increasing importance) non-bookstore retailers.
Once they have made the effort to create this system, it becomes cost effective to use it to sell the products of other publishers as well. Thus, many client publishers are distributed through the warehouses, sales representatives and marketing services provided by a publisher like Random House.
If a monopoly distributor is unwilling to sell your in print titles unless impractical sales levels can be reached, it certainly makes sense to make those titles available to retailers yourself. Most comic book publishers already do this. But retailers are seldom willing or able to source titles directly from publishers. Stores might not be able to order enough to qualify for wholesale terms from the list of a single small publisher. It is labor intensive for both the retailer and the publisher to make and fill small orders.
So what I’m suggesting, of course, is for some comic book publishers to step up and add client or associated publishers to their in-house distribution and fulfillment title list. I think having more titles available from single sources would make all the titles more attractive and more cost effective, both for stores to order and for publishers to wholesale.
One last thought, something I only realized as I was about half way through this article. There is already a comic book publisher/distributor which uses this business model!
Last Gasp of San Francisco started as an underground comic book publisher. The immediate challenges for the handful of small press comic publishers that sprang up in the late 60's and early 70's was that there was no place to sell their comics, and no way to move their comics from press to those stores -- which didn’t exist.
Daunting problems, humm? R. Crumb is said to have sold his early comics on the street from a baby carriage, but that wasn’t a good long range solution. Soon there was a network of "head shops" all across the country. I was living in Columbia, Missouri, you’ll recall, and the conservative nature of the local community there meant that the local head shop guy called his business a poster store, but with minor variations of that sort, a retail community created itself quickly.
The publishers, the best of them, all distributed each others titles -- Rip Off Press in Los Angeles, Kitchen Sink in Wisconsin, and Last Gasp. Soon, almost immediately, the "average" printing run and sales of an underground comic was 10,000 copies or more, numbers that would make a modern small press publisher drool with envy.
Last Gasp is still around, and seems to be doing pretty well. They specialize in edgy comics, popular (and counter) culture, sex and music, topics very close to the themes they began with all those years ago. They have a retail mail order catalog, and they have a wholesale catalog and newsletters as well as telephone sales representatives and an efficient, speedy warehouse staff.
I think most people who know about Last Gasp probably think of them as more of a distributor than a publisher; wholesale does seem to be the larger part of their business. But they are still a publisher as well. They sell into comic book stores, book stores, and also stores that are (I think) under represented on the client lists of comic book suppliers: music and video stores. I bet they still sell to head shops, those that are still in business.
Last Gasp is a very specialized business. Also, small distributors are by nature somewhat regional, since shipping costs increase at greater distances from your loading dock. So I think there is additional room for other specialized publisher/distributors.
Comments? Suggestions? Accusations? Email me at hank.luttrell@gmail.com.