Thanks for the props. And I'd like to refer any readers interested in this topic to David's excellent analysis of the subject and follow-up comments on his site Love Manga in Boys' Love at the LCS. Lots of goodness at Love Manga.

The flip side though could though say DramaQueen, a noticeable non-Diamond BL publisher, need to use Diamond at all?

As I've suggested in my comments on your site, I personally feel that working with a distributor is the way to go to minimize the hassles of dealing with retailers on an individual basis. So if the other options are dealing with comic book stores individually or going through a smaller distributor like Cold Cut (I think FM is out of business…), I'd still say it's worth it — despite Diamond's quite troubling monopoly on the distro in the Direct Market. And yes, Diamond does want things just so — and as you point out, entering any new market involves an investment of time and other resources, even with the aid of a distributor — but I'd argue that devoting those resources would be more than cost-effective to gain access to sales without returns. That said, it'd be really interesting to hear DQ's perspective on this — are you in touch with them at the moment?

To speak more to your point, though — it is my understanding that any "exclusive" agreements that Diamond makes are only with the publishers, and even then only apply with regards to other DM distributors. Thus, comic book retailers can buy from any distributor they want to (and in fact do) and thus selling to the Direct Market through a distributor does not necessarily mean selling through Diamond. Diamond offers an already paved road to this market, but there's no reason DQ couldn't sell their books to the DM through another nationwide distributor like Baker & Taylor — even if they had already signed up with Diamond. So, if DQ had reasons to avoid Diamond, that shouldn't have to be roadblock for them and their fans to court this market — even if, in the end, they felt, as I do, that working with a distributor was the best way to minimize the hassles of entering this market.

I just wanted to say what a GREAT article that was, and one that happily opened up a whole another range of discussions. ^.^

I think in the end, all publishers should be keen to look at every possible avenue of selling their product, even with one as esoteric as BL. But the pro's of finding a whole new market like the LCS has to weighed up by the cons – extra commitment (staff, costs, work) of delivering to a distributor who likes things done in a very precise manner.
The flip side though could though say DramaQueen, a noticeable non-Diamond BL publisher, need to use Diamond at all? There distribution already is most fruitful for them and like myself who buys entirely online from comicshops/bookstores many already have the full DQ catalogue.
Maybe the LCS is a great avenue to proceed down, but just maybe it doesn't have to involve Diamond leading you down it. ^.^

Don't forget the chicken bones, though — very helpful with that mystique thing I hear…