Wednesday, May 5, 2010

My Life With Comic Books: Part # 91

Cast of Characters:
Paul: age 39
Mal: my wife


This chapter is a very simplified explanation of the betrayal of our industry by Marvel Comics.

Most manufacturers, publishers and suppliers understand how important their relationship is with stores like mine but many collectors believe that they are the actual customers of these companies. In actuality, the retailer is the direct customer of the manufacturers, publishers and suppliers. We are treated with respect, courtesy and gratitude by most of our suppliers but occasionally we end up dealing with some companies with bad attitudes and poor customer service. The Upper Deck Card Company and The Topps Company were so bad that we decided to end our direct dealings with them. We now pay a little bit more for their product but we buy it from wholesalers who appreciate our business. This is the story of Marvel Comics.

Marvel Comics began publishing comic books in the 1930’s as “Timely Comics.” These comic books were distributed to local stores and newsstands through a system that offered returns on any unsold product. The retailers only made a small profit on each sale but they were not taking any risk because they could just send back any unsold comic books for full credit. In the 1970’s Marvel Comics began selling comic books on a non-returnable basis to “direct-market” distributors who resold them to convention dealers and comic book stores. This new system allowed the retailer to make a larger profit on each comic book but we assumed all of the risk. We could not send back any unsold product. Marvel Comics made more money because they could control the print-run as they knew they’d be no copies coming back for credit.

In the early to mid-1980’s, the management of Marvel Comics realized that we were “partners” in this business with them. As our individual stores grew, Marvel Comics made more money. Marvel’s management, including my friend Carol Kalish, devised programs to help the retailer increase sales. They helped us to pay for upgrades to our store fixtures and offered us “co-op” credit towards any mainstream advertising that we did. We worked together to “grow” the industry and comic book sales increased greatly. The industry even survived the greed of Wall Street tycoon, Ronald Perlman. He bought Marvel Comics and bled it dry by spending hundreds of millions of dollars buying up other “entertainment” and hobby companies including Fleer, Skybox, Pannini Sticker Company and more. Under his command, Marvel began flooding the market with sub-standard product at the same time that they increased the cover price of almost all of the comic book issues. Although many retailers expressed their displeasure at the policies of Perlman, the industry was still strong. This all changed when Marvel Comics became a publicly traded company.

Marvel hired Terry Stewart as president in the 1990’s and throughout his reign as president he made it clear that he was no longer interested in being “partners” with any of us “lowly” comic book retailers. He instituted policies that improved Marvel’s bottom line but adversely affected almost every comic book specialty store. He thought very “short-term” to please stockholders each quarter and his poor decisions were dangerous for the business in the “long-term.” He announced plans to open a chain of Marvel Mania restaurants that most retailers knew was doomed to failure. He attempted to lure our customers away from our stores by running advertisements in the comic books for his mail-order company called “Marvel Mart.” In face-to-face meetings Terry Stewart insinuated that he knew a better way for all of us to run our businesses. He was insulting and very condescending. As a result, retailers realized that Marvel’s management couldn’t be trusted to act in our best interest and they “revolted” by reducing the quantity of Marvel Comics product that they ordered. When Stewart saw the sales of his company’s product drop by 20% he made the biggest blunder of his disastrous career. Diamond Comics Distributors and the handful of other comic book distributors were all doing a fine job of getting Marvel’s product to every retailer in the United States but Stewart decided that he could do a better job and then the extra profit would boost Marvel’s bottom-line. He authorized the purchase of “Heroes World,” a small comic book distributor in New Jersey. This was a disaster that had potential to destroy the entire comic book industry.

Next chapter: The retailers fight back.

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