Business SMART:

Trade Show Addiction
 

By: Dennis A. Conforto
A-Z Media Group

This week I would like to talk about one of the most serious business issues facing the scrapbooking industry. I call this problem “Trade Show Addiction”. Today our industry revolves around what happens at a trade show. However, what happens at a trade show is all too often what is putting both retailers and manufacturers at risk in-between shows.

Too many manufacturers are now at risk because so much of their yearly business occurs only at trade shows two to three times per year rather than throughout the year. Of course, if this is happening to manufacturers it also means retailers are at risk by overbuying at trade shows rather than buying in a given month what they project to sell in that month.

I believe the scrapbooking industry thinks that trade shows are all about manufacturers selling and retailers buying, but in truth those two functions are the least important events of a trade show and are the result of “trade show addiction!”

You can clearly see what happens as you walk the floors of these fabulous shows. Retailers are looking for new products, show specials and discounts while manufacturers are looking to move products through new product introductions, show specials and discounts on products they need to clear out from the last trade show.

Some manufacturers write a majority of their business at the trade shows. This means that if they don’t write a “big book” at the trade shows they will have cash flow problems that will affect every part of their business. When they do write a “big book” with few re-orders in-between, they pass the cash flow problem on to the retailers.

Retailers who overbuy at a trade show kill their turn rate which is the single most important business factor in retail profitability. Over time, this pattern slowly catches up with the retailers and drives them out of business. Sometimes I get the feeling the industry is turning retail stores out of business faster than its inventory.

Many manufacturers are seeing what "trade show addiction" has done to their business. They have begun a process of doing new product introductions in-between shows to balance the selling cycle thus creating a better business model for themselves and the retailers they are serving.

Retailers are now starting to see that if they over buy at a trade show, their products quickly age and over time they run out of the cash necessary to stay in business. Balancing out the buying and selling process month by month relieves the pressure of having to over-perform at a trade show.

If manufacturers want a healthy business model they must consider ordering cycles that perform like clockwork every month. What manufacturer wants to be so tied to trade show performance that they face going out of business? Not one, but too many are in that position today and clearly there is a better, SMARTER way of doing business. What retailer thinks it’s a good idea to binge buy at every trade show and then not have any money for marketing to new customers?

In truth, the real art of our business happens in-between the shows not at the shows. Our collective ability to increase revenues and profits happens 12 months out of the year not 8 to 12 days a year at trade shows. We need great trade shows, but we need to be business SMART when we attend these shows.

So, if buying and selling aren’t the main purposes of a trade show, what are the main reasons for all the effort behind these shows? First, trade shows provide a venue for retailers and buyers to meet with their current manufacturers; second, they provide a place for retailers to view new trends and product introductions; and third, they are a place for retailers to meet and establish relationships with new manufacturers.

Now, how do you get off "trade show addiction?" It’s simple: have the right merchandise, at the right time for the right price and buy what is projected to sell on the retail floor. What happens on a retail floor is a reflection of the systems within the industry that support the retailers. The better the partnerships between retailers and manufacturers, the better the systems will be and the more we will increase revenues and profits. And that is what being business SMART is all about!