The Strange Origins of the Comic Book Direct Market

by Jamison Ashley
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Anyone who has ever collected comics has heard of Mile High Comics in Denver, CO. The CEO of Mile High Comics has been in the business since the early 70’s and has a lot of experience and wisdom when it comes to the comic book industry.  Charles Rozanski is also a columnist for the Comics Buyer’s Guide. Mr. Rozanski has written an eye-opening series of posts, 9 parts so far, covering the origins and evolution of the direct market in the comic book industry. Here’s just a taste:

I have been involved with selling comics for over 30 years. From the moment that I opened my first comics retail store in 1974, I became acutely aware that the efficient delivery of new comics product into the fledgling world of comics specialty shops was critical to their survival. In those early days we were competing primarily with newsstands and convenience shops. Discounts were dreadful, with most ID wholesalers only offering a 30% discount rate. On a comic book with a 20 cent cover price, you earned a whopping six cents per copy for each issue sold. In fact, the only reason I sold new comics in those early days was because they were critical for generating the weekly foot traffic that would allow me to sell back issues.

By the time my first store opened, I estimate there were approximately 30 other comics shops in the US and Canada. There were also about 100 other stores who sold primarily other products (used books, records, etc.) but also carried a line of new comics. While some of these retail outlets purchased through local ID wholesalers, many were beginning to avail themselves of a new service from Phil Seuling’s Seagate Distribution, the first wholesale company specifically created to sell new comics to comics specialty stores.

Phil began Seagate in 1972, long before selling to comics shops was economically viable. He was a schoolteacher at the time, and was well known in the New York area not only as a dealer in comics and original artwork, but also as the operator of the huge 4th of July convention in NYC. As I’ve heard the story told, Phil brazenly walked into DC, Marvel, Warren, Harvey, and Archie in 1972 and convinced them that their future lay in selling comics directly to comics specialty shops. He also convinced them to give him a special deal by which they would pay the costs of packaging and shipping all of the books ordered by his accounts. In exchange, he promised them that he would purchase all books from them on a non-returnable basis.

Returns had become a very big deal in the early 1970’s, as comics were no longer selling in the percentages of previous decades. During World War II, when comics were very popular, it was not unusual for sell-through percentages to be in the high 60% range. A few comics were reported to have even sold entirely out of stock. This is a critical number, because comics are a unit driven business. What I mean by this is that the majority of the cost of publishing any given comic book is in the editorial production (i.e. plot, pencils, inks, colors, and editorial staff costs). Once you’ve paid for the cost of creating the comic, the cost of printing/paper/ink per issue is negligible. This is why it was economically viable for the publishers to flood the newsstands with far more copies than they could realistically sell of any given issue. Even if half of the copies remained unsold after 30 days, and subsequently had their covers stripped off, the effort was still worth while. With low unit production costs, the critical marketing issue for the comics publishers was maximizing the total unit sale by putting as many books out on the newsstand as possible.

By the early 1970’s, however, the numbers were beginning to turn against newsstand sales…

 

Do yourself a tremendous favor and read Rozanski’s entire series of posts on the origins of the comic book direct market here. It’s well worth your time if you’re a fan of comic books. The man has a firm grip on this history of the comic books industry.