We sat down with CEO Angelo Exarhakos of Universal Distribution, which operates three distribution centers in Canada wholesale comics, games, trading cards and other products, and talked about the Canadian market, lessons of the pandemic, the planned expansion in the United States, and more.
ICv2: For our readers who may not be familiar with Universal Distribution, can you describe your business and the type of business you do, the parts of the business you work in?
Angelo Exarhakos: Sure. We created the Universal Distribution company in 1989 when we were very young, I was 21, with the idea of trying to find our passion, and above all to become a comic book distributor. We started with the comics.
We finally started to add different lines such as sports cards, game cards, Magic: The Gathering, Pokémon, and board games. The idea was to have a true one-stop source for your typical comics/games store so you could provide them with products and services, and ways to create a better experience for their customers.
We recently learned that you’ve added DC as a direct supplier, expanding your business on the comics side (see “DC opens new direct distributor”). Talk a bit about the comics business in Canada, how it might be different from the US, and how you feel about expanding into this new way of doing business.
In Canada, due to our smaller population base in a large landmass, most of our stores are what we call hybrid stores. They basically offer a combination of comic books, game cards, board games, sports cards, and collectibles.
We don’t have many areas other than the actual metropolitan areas of Montreal, Toronto, maybe Vancouver to some degree that have the population density to support just a comic book store, purely a card store sport. Most places should have a variety of sources of income for these customers.
We like this because you see that a customer can have multiple interests. We see a lot of crossovers. People who read comics usually enjoy playing games. Many of them like to play Dungeons & Dragons when they read comics.
There’s a lot of interrelationship between these categories, and that’s something we’ve tried to focus on as a company. It is an added value for our key partners to be able to present their products to new readers.
It also gives us the opportunity to help customers in stores who may not have the comfort level in a certain category to create a new revenue stream for them and to create a more complete experience for a typical collector. or a player entering their shop.
What is the general state of the comics and games market in Canada?
It’s very good, obviously with the madness of the last three years, the vagaries of COVID, and not only in terms of business. Generally, we have always believed that our business is very resilient to economic downturns and recessions. Recession proof or recession proof is what we’ve always heard of the collectibles industry. We had no idea what it would look like during a pandemic. We never knew what it was going to look like.
Emotionally, it was quite a roller coaster ride for many traders. I know I had conversations at the start of the pandemic, when we had the first lockdowns, with retailers who had invested huge sums of money to open a new store. I had guys literally crying on the phone, literally in tears, sobbing like babies about what happened to their business. These same people, two weeks later, recall in this joy saying: “I can’t believe how much business I am doing. All my clients are calling me, either on the phone or by contacting me via social media. social network that I communicate with them, and they want products.”
|This is critical, because it told me several things, and most importantly, it’s not just that our category is weathering economic downturns. What it is that what we all love about this company is the escape it gives us from the crazy real world.
We all love being able to come home after a hard day at the office, having been bombarded with different stresses in our lives and opening a comic book. All of a sudden, you’re in this moment, you’re in there, and you’re in a different world, and you’re away from that, your normal, crazy life.
It’s what we all like at the end of the day. The pandemic has shown that more than anything, we’re in an escape category, and that’s wonderful. This is what we do. That’s why I love what we do.
The second thing I think it revealed, and the other part of why I love what I do for a living, is the connection that we as an industry have from the top , from the publisher, all the way down to the final consumer.
It’s such a special, close-knit relationship, but above all that between the merchant and the customer. It’s a fantastic relationship that’s extremely strong, and it’s shown throughout the pandemic. How our category was able to convert that in-store purchase and experience through these closures into one that worked through social media platforms was unique.
We haven’t seen this in many other places. It was very unique, because we are involved in a way of life. Even when times are great (there’s no pandemic, there’s no economic downturn), this person (and I was and still am one of them) likes to be constantly engaged. in his hobby.
I’m constantly checking my phone and my feed about new games, new comics, all the new shows coming out, all those things. That’s what we like. That’s what we like to do.
Fans were always connected to this store owner about new comic book releases, new event happening, new Magic preview coming. It was always already there. As a store owner, you had to make sure you were always in touch with your customers, making sure they knew what was coming.
When the pandemic hit and the lockdown happened, they had a way to communicate with those customers; they were already connected; they converted all that demand. Because people were home and needed the escape more than ever, they were able to convert that into sales.
This was one of the biggest issues I saw when Diamond decided to stop shipping products. As a category, we were very conflicted at that time. You close, you obviously have to protect your staff, and the world goes to hell in a hand basket. At the same time, people rely on us for these products.
They need this escape. They want to be able to sit down and read something and not think about the crazy things that just happened in the world that they’ve had enough. They want to escape. They don’t want to turn on the TV. They don’t want to turn on the radio. They just want to sit down and read a comic.
Comics and games are essential business, you say. [laughs]
One hundred percent, really! That’s what we felt. We felt we had to be there for our customers right now. We really needed to be there. I don’t want to sound like I’m exaggerating, but I think our company has emotionally helped people through this. Our category has managed to get people thinking about something else for a while. There was a lot of value in there.
In our coverage of your new deal with DC, we pointed this out when we asked if you were considering expanding your sales beyond Canada, and you said yes. Can you talk a bit about it and what are your plans?
The main driving force behind what we are trying to accomplish in our partnership with DC is to expand the readership of DC Comics. For me, the border does not matter. It means nothing when it comes to this.
We need to make sure that we are able to supply comics to any retailer who wants to sell them and introduce them to their fans. Again, Lunar sells products in Canada, as does Diamond, and we have no problem with that. I don’t think it matters in the end.
If a customer on the block I’m sitting on right now thinks they’re better served by Lunar who’s across the continent, that’s their right, and they should have that right. If they think they are best served by someone next to them, they should have that right as well.
I believe there is a lot of business there. I don’t think we have to worry about taking each other’s market share. Emphasis should be placed on the creation of new businesses. This is where we add value. If we as distributors ever forget that, we don’t need to be there. They can sell directly. They don’t need us.
We need to be able to add value to this equation, and the value we add helps our retailers create a fantastic experience in their stores so they can attract new customers. This is the key.
How would you ship to a customer in the United States? Do you have a shipping location in the United States?
We do, and obviously we have plans to come. You might be able to tell that we have a genuine passion for the business, so we have no intention of holding anything back, no obstacles, to enable us to engage with the fanbase wherever that is. ‘they are.
Do you currently sell games in the United States or do you plan to sell games in the United States?
We currently do not. We are very, very careful, because we have contractual limitations. Every business is a little different. Currently, we do not sell most of our [game] products in the United States If we sell comics to retailers in the United States, it’s a conversation we need to have with our suppliers to see who thinks it would add value to their business.
As I said earlier, at the end of the day, our job is to execute the vision of our key partners. If there is a partner who simply believes that they want to keep the border separate, we will absolutely respect that, because they have their own plan and their own strategy. We must be part of it.
I do think, however, that the comics business is a bit of a unique situation because distribution has remained static for so long. We are evolving. It’s probably unfair to compare it to distribution with board games or CCGs.
They’ve evolved very, very differently over the last 25 years than the comic book distribution industry. Comic book distribution has been static for 25 years, and all of a sudden, now it’s everywhere.
Ultimately when I think about distribution, and when I talk to my team here, the main driving force for us and our mission is, how do we add value for our suppliers, our key partners and execute that vision , and how can we add value for our retailers? If we don’t, we have no reason to exist.
Quite frankly, if we’re just a logistical convenience, we shouldn’t exist. They can do it themselves. Anyone can have a UPS account.