Marvel vs. Distributors

Originally published July 29, 1994, in Comics Buyer’s Guide #1080

“Things change.”

–Penguin to Batman, and vice versa

Batman Returns

A decade ago, when Carol Kalish was running Marvel direct sales, and I was her assistant… the market suffered from growing pains. There were any number of times when we would come into conflict with distributors over policy decisions; over actions taken by other arms of Marvel (Marvel Books landed us in hot water quite a few times); over opening up new distributors in order to prevent a situation where a handful of distributors controlled the majority of the market (a strategy that ultimately failed); over all kinds of things.

It was also a time when expectations were different. When X-Men (there was one mutant book at the time; what a concept) sold, as I recall, between a quarter million and 350,000, and was the pinnacle of success at Marvel. There was X-Men and there was everything else. When we solicited for the New Universe titles, we pegged sales for the first issues at somewhere around 125,000, and lo, we were thrilled.

There were arguments and disagreements and occasional feuds between all parties. Any number of times there were face-to-face confrontations at distributor meetings, back when such meetings consisted of get-togethers in cramped New York hotels and the editorial presentation consisted mostly of editors talking about what was coming up in their books while distributors took notes.

There was even the occasional blow-up, from which it seemed there would be no way back. But eventually such things would pass over, and all would settle back down to business as usual. Sometimes feelings remained bruised, but we pushed past it and moved on. Because we could afford to.

Things change.

It is now many years later, and the stakes have escalated beyond anything that Carol and I could possibly have envisioned. Shareholders’ interests must be met, multi-millionaire owners answered to. The bottom-line has been shoved skyward. Once upon a time distributors and retailers may have griped about Marvel, but the alternative was DC. Now there’s far more, and Marvel cannot afford mistakes because there’s too much at risk and too many people who have no clue or history with the comic industry who are standing there with their faces pressed against the glass wanting to see results.

This, to my mind, creates a siege mentality. In such a state, one divides the world into friends and foes. Now me, I’m neither, but merely a jerk with a column. A jerk mostly because I don’t wait until I’m a safe distance to say something critical about Marvel. I suppose I bank on Marvel realizing that I call ’em like I see ’em, and that several times in the past that’s fallen in Marvel’s favor. (At least when I’m critical, they don’t bleat that I’m just jealous.)

All that said, we come back to the notion that things change. Because an action by Marvel has come to my attention, and I can only say that Marvel’s handling of it is not the way it would have been done back when the stakes were less elevated.

Short version:

A small but long-time East Coast distributor called Comics Unlimited Ltd., run by Walter Wang (not to be confused with West Coast retailer Comics Unlimited run by Bob Matson) made statements in its retailer newsletter, dated April 1994 (although it actually came out in February) that were highly critical of Marvel Comics

Marvel subsequently dropped Comics Unlimited as a distributor… a move that is, to my recollection, unprecedented for any reason other than late payment. A move that can only be viewed as punitive, and that has sent something of a chilling ripple through the industry. One is put in mind of the film Point of No Return when Bridget Fonda is informed that she must mend her wildcat ways in her spy training, or else: “(The Boss) drew a line in the sand. He mentioned the word `bullet’ and he mentioned the word `brain.'” Marvel has likewise drawn a line in the sand… right where, it would seem, its foundation of good will is presently constructed.

Here’s the long(er) version:

Walter Wang has a long-time relationship, both personal and professional, with Steve Geppi of Diamond. By January of 1994, Wang had been in the industry over fifteen years. He had run into the law of diminishing returns; the amount of investment he would have had to pour into CU to keep it current with what larger distributors were offering in terms of services could not possibly be amortized. Growth simply wasn’t feasible… it was either flatline or, even worse, down. So Wang began talks with Geppi about Diamond buying out CU.

A couple of weeks after that, the Marvel Mart imbroglio hit. There’s no need to rehash here the adverse retailer reaction. Suffice to say that Wang was deluged with calls from angry retailers, many of whom wanted to take some sort of action against Marvel and not a few of whom wanted to boycott Marvel altogether.

This, of course, is called “Cutting off your nose to spite your face.” Wanting to avoid a customer base of noseless retailers, Wang–in his April solicit newsletter–sent a response to his customers that was, to put it mildly, strongly worded.

Wisely, he advised retailers not to boycott Marvel. Instead he recommended a three-step approach:

“First, promote other, direct market friendly publishers and try to reduce the importance of Marvel comic sales in your store…We send out enough promotional posters from various publishers to allow you to change the look of your store fairly often. Sometimes you simply have too many posters, mobiles, stand-ups, counter dumps, etc. to choose from. If you have to choose, why not choose one from a publisher who supports the direct market?…

“Second, reduce your Marvel back issue budget. Marvel Comics probably have enjoyed the best back issue sales performance of any publisher over the past ten years, but the times are changing. With back issue sales becoming a less and less important part of your sales, I hope you are not buying much inventory for the back issue bins…”

“The third thing I would suggest is that you think twice or three times before you run a Marvel co-op ad. Why not run a DC, Malibu or Valiant ad instead? They all have co-op programs…”

That Wang was cheesed off with Marvel was clear; his irritation over being deluged with angry calls from retailers was quite evident. Nevertheless, if he thought that Marvel wouldn’t react in some way, then he was kidding himself. I just somehow doubt that he anticipated the full extent of Marvel’s subsequent wrath.

I have copies of all correspondence between Marvel and CU. If I were the Washington Post, I’d quote liberally from the Marvel letters to Wang. But I just somehow feel it would be inappropriate to toss around paragraphs from someone else’s letters. So I will simply say that Marvel made it clear that it was extremely angry with Wang and expected him to do something about it.

In a subsequent letter to his retailers, Wang addressed several valid points raised by Marvel, including Marvel’s response time to the outpouring of retailer rage over Marvel Mart, and Marvel’s track record of co-op and retailer support programs–arguably the leader of the industry in such things–that made the label of “Unfriendly to the marketplace” an unfair one to stick on Marvel.

Apparently, this was insufficient. Because in May, Marvel dropped CU as a distributor. Marvel gave Wang enough warning that he was able to speed the buy out by Diamond; consequently, no CU retailers were disenfranchised.

The official Marvel statement, issued July 5, was as follows:

“The fundamental distributor relationship between Marvel Entertainment Inc. and Comics Unlimited Ltd. was severely damaged when, in their April 1994 retailer pack, Comics Unlimited urged their retailers to reduce their orders on Marvel product. The foundation of our relationship with our distributors is based on our combined effort to maximize Marvel’s retail sales in each account and provide them maximum marketing support. In a scenario where a distributor actively works to discourage retailers from ordering Marvel product, or disregard the business support that Marvel has long offered those retailers, a real and major disservice is afforded, not only to Marvel, but to the entire comics retail community.

“Marvel did attempt to restore this foundation with Comics Unlimited but, unfortunately, was unable to continue a healthy working relationship. Under these extraordinary (emphasis theirs) circumstances, Marvel has discontinued its distribution through Comics Unlimited. We regret having to take this action after a ten-year business relationship and Marvel remains committed to our long record of retailer and distributor support.”

Now… what is the most delicate way I can put this?

Marvel made a mistake.

A blunder. A screw-up, a flub, an error, a goof, a gaffe, a faux pas, a Bozo no-no, a slip-up, a FUBAR, a miscalculation, an oopsy-daisy. For a company that is concerned about its public face, this was a strategic maneuver on par with what one finds in a typical adventure of Pinky and the Brain.

Just to get a second opinion (and since Carol’s not around, I couldn’t ask her), I checked with Ed Shukin. Ed, lo those many years ago, was Marvel’s VP in charge of sales. He hired Carol Kalish and helped ramrod the entire direct sales market into existence. (If you think getting deluged with calls from cranky retailers over Marvel Mart is a hassle, try imagining the grief Ed got from several hundred very angry, and very powerful wholesalers, demanding to know what this upstart “direct market” thing was.)

Shukin recently came out of retirement to join Big Comics, but he emphasized to me that his comments to me were as an experienced sales hand, and not as a “Big” spokesman.

I asked Shukin what he thought of Marvel’s decision. After all, in the old days such a decision would have been his call to make. Shukin flat-out told me he would never have (there’s no good way to say this) cut off Wang.

After all, Marvel was very much aware that Wang, as a distributor, was going to be going away on his own. “Considering that Walter was selling out to Geppi anyway, it was a specious, stupid thing for Marvel to do,” Shukin told me.

The problem is that Marvel’s trade terms–the terms under which Marvel will do business–call for ordering at certain quantities, payment within certain periods of time. That sort of thing. Nowhere does it say that a distributor must toe the company line, or be a lackey for Marvel, any more than a distributor must be one for DC or Image or whomever. He’s not on staff. He’s a customer. Whatever happened to “The customer is always right?”

Granted, some of Wang’s statements were incorrect, and even did Marvel an unfair disservice. But if we believe that business about learning everything we needed to know in Kindergarten, well then somewhere back there I seem to recall being taught that two wrongs don’t make a right.

Particularly bizarre is Marvel citing as its premiere beef with Wang that he “urged… retailers to reduce their orders on Marvel product.” That’s the thing that has Marvel’s collective nose most out of joint.

The problem is that Wang didn’t say that.

He advised, as noted above, that retailers should not be heavy ordering for the purpose of back issue stock.

That Marvel should take umbrage at this is peculiar considering that, a half dozen years ago, this was the official Marvel direct sales policy. I know, because Carol Kalish set it, and I espoused it.

Carol’s continued emphasis to retailers–considered heresy by some at the time–was that they should be ordering only what they could sell within a month’s time. That they should not be ordering additional copies intended solely for back stock, because this was just tying money up. Instead of investing money in back issues, and all the hidden costs of upkeep, Carol preached that retailers would be far wiser to keep the flow of new comics coming in (and the money available for such) and de-emphasize back issues whenever possible.

Hëll, that was part of the defense used when Marvel started going back to press with certain comics: Carol said, “Hey, we’ve been telling you for ages you shouldn’t be investing heavily in back stock.”

Carol developed this philosophy. She got promoted.

Walter Wang repeated this philosophy, presenting it as an alternative to retailers dropping Marvel entirely. He got the axe.

The only possible interpretation of this shift in stance is that Marvel is emphasizing bottom line sales-at-all-costs over retailer health. This is… to put it mildly… not good. I want to think better of Marvel than that; I really do. I don’t think that’s what Marvel is really intending to put across.

Unfortunately, that’s what’s being perceived, and I think it behooves Marvel to make it clear that that’s not the case. Fast.

Whatever Marvel’s intentions in the Wang action were, they’re almost secondary to public perception… and a smart corporate entity should be able to know how things will be viewed and take that into account.

Observers read the action thusly:

Marvel, feeling besieged from all sides, took an opportunity to act tough at no financial risk to itself. Wang could be dropped as a distributor with impunity, because Marvel knew he was being bought out by Geppi. This way, though, Marvel could send out a message to the distributors that said, in essence, “We expect support from our distributors; don’t screw with us.”

Was this Marvel’s intention? We don’t know. We must content ourselves with the official statement. Maybe Marvel was just ticked off, fed-up, and took an action without considering the long-term consequences. But Marvel should have considered them.

What Marvel should have done was address a letter to Wang’s retailers, presenting in clear and friendly terms Marvel’s side of things. Then Marvel should have asked Wang to distribute it in his next mailing. And after that, let it go. Shine it on. Move along, buddy, okay, c’mon, show’s over, nothing more here to see.

But Marvel didn’t do that. In essence, Wang said to his retailers, “It looks like Marvel is out to get us,” and Marvel, in essence, said, “Oh yeah?! We’ll get you for that!”

This is not the way to make friends and influence people. And Marvel could use all the friends it could get.

That, at least, has not changed.

(Peter David, writer of stuff, corrects his earlier column. The cover of Thing #6 was not drawn by Ron Wilson but, in fact, by Brent Anderson. At least that’s what the signature seems to say. Brent… join the ranks of people who have been tributed.)