A few days ago I was faced with a dilemma: whether or not to participate in the New York International Gift Fair. The NYIGF is the best-known trade show in the biz, and the show of choice for hip, high-end designers. To show in one of the juried divisions, you need to submit a lengthy application. If accepted to the show, you can typically expect to wait anywhere from three to eighteen months for a spot.
A little recent history: when I first visited my local SCORE center, Barry, my counselor, emphasized how important it is to do the trade show circuit, exhibiting at least once per season. “There are only two ways to get new orders,” he said, “From trade shows or by going door-to-door, and you get very little return on your investment going door-to-door.” Okay, so Barry retired from business years ago, before the “long-tail” of the Internet had any effect on things, and he was in the garment industry. But what did I have to lose by applying?
The California Gift Show in Los Angeles contacted me three hours after filling out my contact info online. The show manager said that they had visited my web site and loved my products so much that they wanted to offer me a booth in their juried “L.A. Contemporary” division, without needing an application. I was thrilled. Firstly, the CGS is run by George Little Management, which also runs the NYIGF. I had read of artists showing at small GLM shows and then being recruited for the NYIGF by division managers. Secondly, the L.A. Contemporary division seemed analogous to the “Accent on Design” division of the NYIGF, which typically has the longest waiting list for spots. Then all of a sudden, I got what I thought I wanted most–a spot in this February’s NYIGF in the new “Handmade” juried division.
At first I was really excited. I had poured a full eight-hour day into my application and it had paid off! This was going to be easy money. Surely, if George Little Management thought my products were so good that I got booths at their shows so shortly after applying, then my products would fly off the shelves. They would know, right? They’ve got more of a global view of what sells in the gift industry than anyone. Also, the NYIGF is only two weeks after the CGS, so I’d be fresh off my first “practice” show, ready to dazzle store buyers and press alike with my finely-honed elevator pitch. I’d already have designed and built my booth and would have all of my materials together.
…or not to show
BUT, they needed an answer by 9am the next day or I would lose my spot, and it costs roughly $4,000 to use the booth. I did some math in my head: $4,000 for the booth, $800 for plane tickets for me and Andy, another $200 for meals and incidentals, $500 for booth construction materials, another $500 for shipping and lading of those materials, $200 to print more line sheets, order forms, etc. and God knows what else I wasn’t even considering. I haven’t finished the budgeting I learned in my accounting class this week, but I know I can’t afford to spend $10,000 on marketing my first year in business.
So I did a little more math: the average profit I make off of one of my meats is $6. If I got orders for 1,000 meats during the NYIGF, I could just about pay for the venture. Well, shit. Could I really expect sales to be that good? Even if they were that good, does it make sense to put that much money towards promotion? On the other hand, if I turn down the holy grail of gift shows, how am I ever going to get new orders?
Clearly, I needed reinforcements, so I contacted a few friends and relatives. I started with my mother, who knows nothing about trade shows, but was the only person answering the phone the moment I started freaking out. She made a few good points, like if I couldn’t afford it, I couldn’t afford it. End of story. And even if I had to reapply for the NYIGF the following year, wasn’t it better to have wasted one eight-hour day than $7,000?
Next, I called my uncle, who has a fancy tea company and a successful construction business. He is very familiar with the trade show circuit, albeit in different industries. His advice was very helpful, too. He said, “Take baby steps your first year in business. You don’t want to make big leaps when you don’t know what’s in front of you.” This sentiment was later echoed by my accounting instructor, who said, “Growing too fast can kill a business.” My uncle also emphasized that a trade show should be treated like an advertisement. Many companies don’t typically get enough orders from a show to cover its cost, but do it anyway in the hopes of getting press and exposure to national stores, and out of fear of “not being seen” when their competitors are.
Finally, I e-mailed my friend Scott, of the Woollyhoodwinks. The Woollyhoodwinks had shown at the NYIGF this summer, in the Handmade division, so Scott had the most timely and relevant advice at all. He wrote:
“It is important to understand a few things: ALL of the risk is on you. The NYIGF (and all gift fairs for that matter) are structured for the benefit of the gift fair company. They will hint at all sorts of amazing results that you can expect without promising anything. It is entirely up to you to make it successful, and that means getting a booth designed and built and shipped to NY and promoting your participation in the show by getting together a mailing list of potential customers and letting them know that you are going to be there. Also, you need a smooth order taking process because the buyers are there to buy and they don’t like to waste any time.
“Having said all that, we have done well at both the SFIGF and the NYIGF, making about 3 times our investment in new orders. However we did do the SFIGF first which allowed us to make a lot of mistakes much less expensively. Since it was in town, the financial risk was considerably less and we were able to refine our process for the NYIGF. My advice would be to skip the February NYIGF unless you already have very clear ideas about a booth and how to get it there. That is a huge deal and your presentation needs to be slick.”
In the end, I took their advice and didn’t do the show. I don’t have an extensive mailing list. I don’t have a smooth order-taking process. I only have a design for a booth half the size of the ones in the Handmade division. I don’t have a slick presentation and I don’t have the budget for it. I suddenly realized I was making my decisions based more on emotional factors than on purely financial ones. I had a feeling about how well I could do because of the prestige of the show and the enthusiastic comments I was receiving from stores and customers. But making big financial investments based on vague, optimistic feelings is how you go out of business.
I will make my mistakes at the considerably less expensive CGS (it costs about a third of what it does to do the NYIGF), and if it goes well, perhaps move up slightly higher on the ladder to the San Francisco International Gift Fair in July. Then I’ll be in a better position to decide whether the NYIGF is a good investment in 2009. In the meantime, contrary to Barry’s insistence, there are in fact LOTS of ways to get new orders that don’t involve trade shows, but more on that in the next post.