Direct market

Direct market

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.

History

The Direct Market was created in the early 1980s in response to the declining market for comic books on newsstands. Fan convention organizer Phil Seuling approached publishers to purchase comics directly from them, rather than going through traditional periodical distribution companies. Unlike the newsstand market (which included drugstores, groceries, toy 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.

Seuling's private agreement spread to other stores, and as Direct Market comics shops proliferated, a variety of regional and national distributors developed, essentially replacing the order-taking and -fulfillment functions of newsstand distributors. Publishers began to produce material specifically for this 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. As newsstand sales continued to decline, the Direct Market became the primary market of the two major comics publishers (DC Comics and Marvel Comics). 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.

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. 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 Capitol City Distribution, Diamond's main competitor at the time, either went out of business or were acquired by Diamond. 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.

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 , or Fantagraphics through W. W. Norton ), while Diamond has created Diamond Book Distributors

Impact

The development of the Direct Market is commonly credited with restoring the North American comic book publishing industry to profitability after the 90's infamous crash. 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 and it having shown signs of continual growth against independents and small publishers.

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.

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.
  • 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.

Direct Market distributors

Current

Former

Canada

United Kingdom

Notes

References

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