A Comics Journal History of the Direct Market, Part One

Posted by on February 15th, 2010 at 8:13 AM

 

Fine Young Cannibals:

How Phil Seuling and a Generation of Teenage Entrepreneurs Created the Direct Market and Changed the Face of Comics

(Originally published in The Comics Journal #277 , July 2006.)

Part Two: Black and White and Dead All Over
Part Three: Suicide Club

 


Illustration from a Bud Plant flyer circa 1985, depicting a display rack designed by Sierra Group. ©1985 Sierra Group.

 

There may be no better exemplar of the capacity of American free enterprise to survive and reinvent itself through a mixture of mutually beneficial alliances and backstabbing self-interest than the history of the comics-shop Direct Market. Some of the most prominent movers and shakers of those lawless times spoke with the Journal about how the West was won, as it were, by a Brooklyn schoolteacher and a coast-to-coast network of pioneering teenagers.

Since their birth early in the century, comic books had been regarded as a kind of junior magazine and allowed to occupy space on the shelves or spinner racks of newsstands, grocery stores, drugstores, dime stores, and sometimes even bookstores. They caught on quickly and, initially, more than earned their place in those venues, but after the 1940s, the comics industry experienced more downs than ups. The Marvel-led resurgence of the 1960s had foundered by the 1970s to the point where extinction seemed like a real possibility. Comics retailer (and former distributor) Steve Schanes put it succinctly: “Comics were on their last breath. They couldn’t have lasted another four years.”

With their low cover price and tiny profit margin, comics had become more of a nuisance than a moneymaker for distributors. Delivery of comics to magazine racks across the country had become a haphazard afterthought. If distributors paid any special attention at all to comics, it was to defraud publishers with falsified reports of unsold returns. Some comics would be reported as returns without ever having reached a store rack or newsstand. Since the booming 1940s, the comics industry had shrunk to the point where the number of publishers could be counted on one hand. In the 1970s, DC was at a low ebb, with less than 30 percent of a small market, and even Marvel, which had gobbled the bulk of the pie, had fallen on hard times.

What saved the comics industry was a radical reconceptualization of the market that was made possible by a bunch of comics-reading teenage entrepreneurs and a high-school English teacher from New York named Phil Seuling. The impact of the ideas that brought forth the Direct Market in 1973 cannot be overstated. In the long run, the road they sent the industry down had a profound effect on every aspect of the comics field from the fairness of its business practices to the creative focus of its genres.

And if the Direct Market can be said to have rescued the comic book from almost certain death, there are those who would say that the comics-shop distribution network ultimately isolated comics and their readers from the rest of the world as surely as if they’d been sealed in a tomb. To paraphrase DC’s tagline for its late-1960s Bat Lash comic: Did the Direct Market save the comics industry or ruin it?

Before the 1970s, magazine distribution in the United States resembled an arrangement of regional fiefdoms, some of them closely linked to racketeers. Virtually all magazines and comics in the country were printed at Spartan/World Color Press Publishers’ four presses in Southern Illinois and shipped from there to various regional wholesale distributors. The path from comics publishers to the marketplace was so different back then that it would scarcely be recognizable to those who are used to the solicitation catalogs and pull lists of today.

To newsstand distributors, comic books might have been so many sacks of potatoes. As Schanes recalls, “Traditional newsstand distributors, if they had, say, 500 accounts, they would deliver 10 comics to each retail account. They were not set up to take, say, 200 copies of X-Men for one store and 15 copies of Archie.”

Newsstands, grocery stores, drugstores and other magazine venues, therefore, received random assortments of titles roughly resembling the batches that had been delivered the previous month. There was no sense of a public eagerly awaiting a title’s official release date. The low-priced comic books were held in low regard by their handlers, and if a delivery truck ran out of room, piles of comics would simply be set aside in the warehouse for next week’s delivery — or worse, to be reported as unsold returns for publisher reimbursement.

Returnability is the key difference between traditional newsstand distribution and the Direct Market. It was of little consequence to distributors whether the comics they transported ended up in the hands of readers or gathering dust. Either way, they got paid, because comics that were unsold by the time the next month’s issues came out were reported as returns, and publishers reimbursed distributors, who reimbursed shops. In some rare cases, the unsold copies were returned whole to publishers for pulping. More often, to save on shipping costs, retailers simply tore off the date and title portion of each unsold copy and returned that — ostensibly destroying the remainder, but plenty of titleless comic books made their way to flea markets at cut rates. Sometimes nothing at all was physically returned; unsold copies were simply reported on affidavits and reimbursed by publishers — a practice that made fraudulent reports almost irresistible. According to Marvel’s marketing vice president in the early 1970s, Ed Shukin, the sell-through rate for Marvels at the time was in the neighborhood of 35 percent, meaning that for every 10 copies that were displayed on a rack, three or four would be bought by consumers and the rest would be returned for reimbursement. NonMarvels did not sell as well.

Schanes told the Journal, “Traditional newsstand distributors were loose in their accounting in reporting sales and publishers might not get accurate sell-through figures.” And when distributors did deliver comics to retailers, they took their own sweet time.

According to Chuck Rozanski, owner of the Mile High Comics retailing operation, it was not unusual for a local distributor to wait for over a week to finally break down his new comics shipment and send it out in trucks to be delivered to his various newsstands. In his online column, Tales from the Database, Rozanski wrote, “They would usually begin this distribution with the newsstands that they personally owned in their region and then gradually expand their deliveries through a daily route system. The net result of this behavior was that it could take as long as two weeks for comics to be distributed in a given area after they had been received.”

The result was that even the most avid fans had difficulty reliably obtaining the issues they wanted. Business As Usual at the beginning of the 1970s, therefore, was making an already moribund industry worse.

 

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One Response to “A Comics Journal History of the Direct Market, Part One”

  1. patford says:

    Great story, I’m looking forward to the rest.
    One thing I’d point out is there was no, “Marvel-led resurgence of the 1960s.”
    The fact is if you ignore total sales (Marvel was restricted because they were distributed by the DC owned Independent News), and focus only on the best selling individual titles, Marvel’s best selling comic book Spider-Man didn’t break the top ten until the last two years of the decade, and even then was far from the top.
    For almost the entire decade Spider-Man was being out sold not just by Superman, and Archie, but by Tarzan, Lois Lane, Superboy, even books like the Metal Men.
    Where Marvel stood apart from the other comic book companies in the 60’s was their sales were increasing year by year (until 1968) while the sales of DC, Dell/Gold Key, and Archie were in decline, but Marvel’s best selling books never reached the top, and only Spider-Man ever made the top ten. By the time Spider-Man cracked the top ten in 1968 it’s own sales had peaked, and begun to erode.