Comic Economics Part 2: History Of The Comic Book Shop

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There has been an ever vast growing debate on when and where the first comic book shop opened up. I am not here to debate that fact. I will leave that up to the trolls on the threads. I want to give a brief history of comic shops and the progression of distribution. Finally, we can end with the market of comics. So don’t take this to mean that the first comic shop is the first one I have listed.

Comics have been an ongoing trend for quite some time. Some may even say that they helped win us the War. Others may write them off as nothing but childish fantasy novels. However, the one thing that we can all agree on is that comics have had an incredible impact on American life.

The First Comic (Store)

The first comic “book” was Famous Funnies, and was printed in 1933. This first issue was a collective reprinting of comic strips from the newspaper. Some may argue that The Adventures of Mr. Obadiah Oldbuck was the first printed comicbook, but these were considered to merely be prototypes. The big turning point in comic came in 1938 when the creation of Superman in Action Comics #1 was released. This ushered in the now coined “Golden Age” of comics. Action Comics #1 is important in so many ways. This is the first golden age book, the first appearance of a superhero, and the first appearance of Superman. This issue is considered to be the pinnacle of comics, and one of the rarest.

Comics were originally sold in drug stores, newsstands, and even some bookstores. The first stores that could even be considered comic shops were usually shops that sold a number of different items like Pop Hollinger’s store in Concordia, Kansas. Pop opened his shop in the late 1930s and basically sold back issues of comics. Pop also used to repair comics. Although these methods would be seen as primitive and blasphemous to collectors today, we can say that if Pop didn’t have the first comic shop, then he had the first comic restoration shop.

Shops began to sprout up all over the place. Robert Bell’s Victory Thrift Shop in Queens, New York, and Cherokee Book Shop in Hollywood, California in 1960. Seven Sons Comic Shop in San Jose, California, and Gary Arlington’s San Francisco Comic Book Co., San Francisco, California in 1968. All of which actually beat Sidebottom in opening up their doors to sell comics. Despite this fact, many believe that Sidebottom was the first comic shop.

The comic shop became a haven for fans. The shop itself formed a community in which like-minded people had a place to come together and discuss all things geeky.

The newsstands used to purchase comics in large quantities because whatever was not sold could be returned for the news stand’s money back. Companies did this as a way to incentivize newsstand to carry their products. However, these companies would sell comics then have a buyback program where they would buy them at a fraction of the price, and finally return them for a full refund. This led to newsstands making almost double the money and comic supplies losing a vast amount of profit.

Fixing the Problem

Direct marketing was created in the 1970s. There was one distributor for the comic companies; Diamond Comic Distributors. This was the company who would not distribute a comic unless it carried the Comics Code Authority stamp.

The largest change that direct to market distributing offered was non-refundable comics. Since comics no longer needed a bar code many artists began to put little pictures in place of the barcode space. Distributors would receive a promo kit, usually for issue one, and then based on that issue and promo kit they would gauge how much of each issue they would want to order. So if they didn’t order enough then they lost profit, but if they ordered too much then they were stuck with overflow. This overflow created a market for the infamous back issues.

Back issues have become an integral part of comic collecting. For quite some time Comic shops would have rows and rows of long boxes full of back issues. People would come to comic shops to hunt for these issues in order to complete story arcs. There was no eBay back then.

This direct to market and back issue era changed comic collecting. One way that collectors look at comics is by their level of rarity. This is another reason that Action Comics #1 is so expensive. There are somewhere around 50-100 issues in circulation. See, the longer a comic has been around the more scarce it is. However, this isn’t as true with today’s comics, which is why the golden age are so expensive.

Comics have a level of scarcity. During the book burnings, and the paper returns for recycling pulp, many comics before the 1950s were destroyed. Comics before the 70s were mostly returned for their cash value in the buyback programs. Comics before the early 90s were shelved in back issue bins. Today we are seeing a tightening of printed issues in exchange for trade paperbacks and digital prints of comics.

The Era of Collecting

Because certain comics were rare and desirable there arose a marketplace for comics. This flooded the market in several ways. Many people were buying up comics left and right through the 90s in hopes of cashing in for retirement on comics. We will get to the speculative market in a moment. First I want to talk about another area of the comic industry that came out of the comic crazy; certified grading.

The CGC, Certified Grading Company, was founded in 2000, and has become the premiere comic, trading card, coin, etc grading company in the world. For a fee, you can send your comic into CGC and have them examine the comic and give it a grade between 1-10, with 10 being Gem. From there they encapsulate it with a tag of the notes and grade. What this does is it gives the person the ability to price the item accordingly.

Now the reason there was a demand for this grading company is because of the speculative market that arose during the 90s. People had begun to see comics from the 60s and 70s that were selling for hundreds and thousands of dollars. Speculators thought this was a great investment. They would buy any issues they thought were going to be worth something. Mainly they collected first editions and variant covers. There was a huge market for foil and hologram covers. Comic companies were more than happy to crank out second printings and variant covers to generate more revenue.

The Comic Bubble of the 90s

This created a very large bubble in the comic book world, and all those comics that speculators were banking on became worthless. There were too many printed. Who wants the Death of Superman when everyone who wants one has at least one?

The subjective value of comics causes the objective value to decrease. In the late 90s, comic companies, especially Marvel, were going broke because of a recoil in the market and the inability to adjust to the bubble that popped. Marvel and DC began to sell off their movie rights for characters and groups of characters. This is how we came to the movies we have today starting with X-Men (2000).

Comics are not above the laws of supply and demand. These old issues are still valuable, and a lot of 90s comics just aren’t. Economic principles deal with human behavior and not money in and of itself. Economics is about players in a market. This is why so many that subscribe to both the Chicago and Austrian schools of thought understand the market so well. We look at the market in a different light. This is a living, breathing organism, and not an object that we can manipulate. That’s what the speculators tried to do, and they failed. The comic companies have recovered based on free-market tactics and not government bailouts. I think that a number of companies can learn from the moves made in the comic industry.

You can read more from Rocky Ferrenburg on Think Liberty here.

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