A Comics Journal History of the Direct Market, Part One

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


Click image for larger version. The comics-industry pie as measured by Capital City Distribution in 1988.


As new distribution entities formed and scrambled to pull together the minimum orders necessary to maintain direct accounts with the publishers, numerous alliances and agreements were made and broken. In those early days, the Direct Market was not so much a unified network of comics fans and comics businessmen as a lot of autonomously functioning regions linked to the major publishers. Rozanski described it as “more like the cells of a guerilla movement than a mass movement, with some people moving from cluster to cluster or like a honeycomb, where there were some pieces that touched. Because you had people in New York who would know each other really well and compete and then you had Baltimore and then you had Atlanta, and Orlando and San Diego and Houston.” In 1979 and 1980, DC continued to deal largely with Sea Gate, so it was primarily Marvel, which sold to anyone who could meet its minimums, that was fueling the growth in comics distribution, and consequently, in comics shops.

By 1980, the Schanes brothers’ Pacific was servicing 500 accounts and had a 2,200 square-foot office/warehouse in Kearny Mesa, Calif., and within a few months, it grew into an adjacent structure, doubling its size. According to Steve Schanes, the company grossed nearly $1 million in 1980, and his brother Bill was not yet out of his teens. Within a couple of years, Pacific had opened three more warehouses: one in L.A., one in Phoenix, and one converted from an old firehouse in Steelville, Ill., only a few miles from World Color Press.

Rozanski told the Journal, “I knew opening up to more distributors would cause growth, but I didn’t realize how much it would be. It went from 7-or-800 shops to 3,000 in three years. That was growth no one anticipated.”

The overriding concern for the new wave of distributors was volume — enough to maintain publisher minimums, increase efficiency and make the business’ small profit margin work. “Some distributors would offer discounts at cost just to grow their market share,” Schanes said.

According to Mangiaracina, “The month we went direct with Marvel, Glenwood opened a warehouse in Chicago and hired a guy who I thought was my best friend. Since my best friend knew who all my customers were, he offered them all 55 percent off their orders for three months. He didn’t tell them it was for three months. The idea was to offer them 55 percent off long enough to put me out of business. So he took all my Chicago accounts, half our business. Luckily, I had mail order to keep me going, but it cost me my life savings to get through that period.” That was when his mother made the final step from being a comics-threatening mom to pitching in as an employee to becoming a full partner: “I sold 40 percent of the company for $10,000 to my parents, which gave me a couple more months to make the Marvel order.”

A couple of years later, after Mangiaracina had absorbed this lesson in ruthlessness and competition, Glenwood approached him for a favor. “This retail operator had just burned Glenwood for more than $10,000 and Glenwood wanted me to refuse to distribute to his shop. I said, ‘As much as I like you guys…’ The guy bought $4,000 worth of Marvels from me. Of course, 10 years down the road I lost $30,000 to him when he moved to Diamond.”

It was common for a comics retailer whose account was frozen at one distributor to move to another distributor. According to Mangiaracina, Capital City was “very honorable” and, unlike most distributors, tried to avoid taking on delinquent accounts from competitors. But according to Schanes, “Everybody did it, including Capital, including Pacific. All Diamond or anybody had to look at is: Was the shop currently able to pay for its order? To make your own payroll, you had to learn to be competitive, be more efficient. As you grew, you had to deal with truck breakdowns, insurance problems. It was a constant struggle to keep things going.”

According to Capital City’s Milton Griepp, it wasn’t so much avarice that led distributors to take delinquent accounts from other distributors; it was a lack of shared information. A new distributor wouldn’t necessarily know the credit status of a retailer at another distributor. He told the Journal, “It was a learning process, a gradual process of professionalism that the business went through. There was fierce competition. When we did try to check an account’s credit, it wasn’t out of any collegiality. It was self-interest.”


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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.