How Much Is Too Much For A Show Fee?
It seems as though this is the time of year when a fair number of shows choose to announce the new, higher fees. With everything in the whole world costing more and more every month, there certainly is some justification for these fees to increase. The question becomes, what is reasonable? Although many of us have felt the sting of lower attendances or simply lower sales along with higher costs of materials and transportation to the events… many sponsors still make the assumption that everything gets better… every year! If things were really that simple and costs haven’t been escalating while sales at shows can be stagnant or mediocre… then there really wouldn’t be much need for this article. But if you work in any field outside of government where there are automatic “cost of living” adjustments to your pay… or if you work for a company where profits are spiraling into space, then you know that increased profits every year are certainly not assured. Recently we’ve been hearing a lot of complaints about the rising show fees and other costs associated with continuing to participate in shows. Of course I remember hearing the same things about shows several years ago too when fees and costs were much lower. Sometimes these increases are simply driven by the cost of producing an event and sometimes they’re driven by greed. Deciding which one of these situations is the case with the event you are concerned about should have some determining factor in whether you participate or not.
I personally know the pressure of increases since we;ve had to raise the cost of a yearly subscription from time to time to the current $49.95. And while this was something we were very concerned over, we were also concerned about how to continue to provide quality services for you on a continually diminishing budget! With the cost of printing and postage spiraling out of control, the idea of an internet publication has simply become a fact of life for just about everyone!
Shows have their cost increases as well. If you’ve ever priced insurance, online social media, newspaper, television or radio advertising you know what kind of a shock that pricing can be. And events have to take in enough money to pay for these necessities. It’s not unusual at all to spend tens of thousands of dollars advertising a big event… and even small shows can have what are proportionately HUGE advertising expenses. That’s not even to mention the cost of other requirements like permits, taxes, porta-johns, waste removal, police and an endless list too numerous to list.
Now comes the big question… what is too much? That’s not entirely “simple” to answer. At one recent early November central Florida show an almost 100% fee increase brought tears to some exhibitor’s eyes! When the exhibitors asked what could possibly justify such an exorbitant fee increase (now $200.00 when two years ago it was just $80.00) they were given absolutely no explanation and basically told “if you don’t like it, go somewhere else… we’ve got a long waiting list of people ready to buy your space.” I don’t know about you… but this sounds a bit excessive and could have probably been handled differently. On the other hand, shows that have a gradual price increase by a few dollars every year are most likely just trying to keep pace with the costs of doing business and making a profit… no one can afford to do shows at a loss! Since the stock market took such a dive over the last year and the rest of the economy went with it, individuals and organizations looking to preserve the way of life they’ve gotten used to in better times are trying to shift the income to other areas. Those “other areas” can really mean me and you!
Sometimes even a “gigantic” price increase can have a logical explanation. For example, several years ago we had maintained an unrealistic advertising price in our guide just because we wanted to get it off the ground and get people using it. Finally we had to raise our rates substantially because you can’t just keep losing money forever and when that time came, it presented a difficult situation that we had to deal with. Shows, and even your own business follows a similar path. When you started out making your product or art, you may not have really considered all the expenses. Eventually though, you do realize them whether you planned on it or not because you’re usually responsible for the bills you generate. You know how it feels to have a big wad of cash in your hand after a successful show… it’s easy to forget about the higher gasoline credit card bills… the higher electricity bills… All those supplies you charged on your MasterCard. You just feel “rich” for the moment and so if you’re not careful you’ll spend the money on what you want rather than what you need and when the bills finally come due… you’re broke!
Shows can find themselves in the same predicament. Volunteers may have donated signs, time, printing, supplies, trash pickup and the like during the first few years of an event, but that gets old after a while and sooner or later every show has to adjust the entry fee to reflect those “paid” rather than “volunteered” costs. Hence, you’ll see a marked increase in the show fees over the first few years an event takes place. Along with that same line of thought, is the idea that the expectations of the exhibitors rise. Participants expect to see high dollar advertising… and just because sales were great one year, they expect the sales to be great every year. Now it might have actually been a fluke… but the expectation is still there. Show sponsors on the other hand feel this pressure too and are compelled to spend more on advertising. That money has to come from somewhere and again… that “somewhere” is really “someone” and that someone is usually YOU!
I was told recently that it seems as though all the burden for increased costs have fallen on the shoulders of the craftsmen. Of course that isn’t usually true. It was funny because I was thinking to myself not long before that about all the higher costs we’ve had to shoulder to publish this guide… This is again an area of judgement on your part. Is the person who is charging you more actually somewhat justified in those charges or is he just gouging! Your determination once again should allow you to chart your course either toward or away from the person or business in question.
One thing we’ve always wanted “Where The Shows Are !!!” to provide you, the exhibitor, is a great range of choices. The free market and the unity of exhibitors can temper show fee increases but only if we stick together and oppose them. If, in the case where the show raised the fee over 100% in two years, the show fills anyway… then obviously someone feels that the cost vs. return was worth the exchange. If most people fee the exchange is not equitable, then the show will either continue to not fill and begin a downward slide that will eventually terminate the event or the fees will go back down. Sometimes these huge increases are not the result of any kind of common sense and certainly not the result of a person who is familiar with the business. But they are the result of someone who just picks and arbitrary number from the sky and says “watch me increase the profitability of the show! In this case you’re paying to inflate the ego of someone who is bragging all the way to the bank. Obviously this is a show to boycott!
Ultimately what determines whether a fee is equitable or not is really the law of supply and demand.
What you pay to be in a show is really immaterial… it’s the amount of money you make as a result of paying that fee that counts. A $20.00 show where you make $10.00 in sales is extremely expensive… But a $500.00 dollar show where you make $5000.00 in sales is cheap. The difference is the risk factor because if it rains both shows may result in $10.00 in sales. In the case of our central Florida show with the large fee increase the real problem is a question of risk factor, not cost. Most people seem to do quite well in sales most years. Certainly enough to justify the $200.00 fee. But the show is outdoors… it can be 40 degrees in November… it can rain… and it has done both in years past! The risk factor is definitely there. Whether the show fills or not will depend on how many people are willing to take that risk.
The old rule of thumb many exhibitors use, is that the show fee should be roughly 10% of the sales a show generates. This rule seems O.K. and in general it works, but it doesn’t take into consideration all the variables that make a show “good”. Percentages have long been the friend of accountants and others who try to analyze things in simplistic terms but there are a good many situations where this idea runs just a bit dry of a creek.
Lets say for instance, the “Holy Church of All Good Things” puts on a craft bazaar and the entry fee is $20.00. Conventional thinking says that this show should produce $200.00 in sales. Although the percentages may be right, a $200.00 day isn’t really all that great especially if your other expenses really begin to add up. But on the other hand, if the show were right down the street, and you had no additional expenses to speak of, it may not really look so bad.
In many cases the show fee is really one of the least expensive aspects of a show. If you need a hotel for two nights, that can easily add up to $100.00 or more. Gas and other vehicle expenses usually amount to about $25.00 for each hundred mile radius we travel from home (this assumes a round trip). Food on the road is always more expensive than at home and even being extremely frugal you can count on spending at least $20.00 per day per person. Expenses at the show contribute too… we usually spend at least another $10.00 per person throughout the day on drinks, snacks and other miscellaneous expenses. If you have kids with you too of course all the expenses I just mentioned skyrocket as you try to keep them entertained throughout the day !
Lets take a minute and add up expenses that have nothing to do with show fees for a two day show 200 miles from home with two people… $50.00 vehicle expense, $100.00 hotel, $80.00 in food, $40.00 miscellaneous at eh show… $270.00 before we even put down a nickel for the show fee!!! Put a typical $125.00 show fee on top of this and factor in a 35% product cost, and you have to do $600.00 in sales just to break even. That $150.00 show fee doesn’t look quite as big as it used to does it. The fact is that in this case, the show fee only represented 25% of our cost to do the show.
By no means am I suggesting that we should all do $20.00 shows with $200.00 grosses, it would be pretty hard to make a living at that level… but I am suggesting that we look at all the factors that influence the true “cost” of a show when determining if the show fee is appropriate. The purpose of the explanation above was to show you that a proper show fee can only be determined when related to other factors that influence cost. And related to that is the real issue we have to take into consideration… is the risk worth the return. I theory, a greater risk should produce a greater return… of course there is that work “risk” which is an unfortunate but inevitable aspect of business. When determining if the show fee is appropriate, we must hone our skill in the area of risk assessment.
You may want to develop a checklist of risk factors associated with doing shows to make sure you consider as many variables as you can so you can make better choices and not let emotion or desperation sway your decisions. Here are some points you may want to consider on your checklist…
1. How far away is the show. Analyze what it really costs to drive your vehicle to events and use it as a constant in calculating the figures for this area of concern.
2. Will I need accommodations. Don’t figure on getting the cheapest possible room… often times events we participate in happen during “peak” seasons and room rates will be higher that usual. You might consider staying a few more miles away from the event to save on this cost though.
3. What was selling at the event last year. You may sell a few pieces of fine art at a country craft show, but I virtually guarantee it won’t be much… if you specialize in expensive items and the show consists of impulse buyers you’ll go home disappointed… if you sell an item that’s fragile like pottery or glass, stay away from events that have rides or require a lot of physical participation on the part of shoppers. You don’t see too many people on the tilt-a-whirl carrying that newfound piece of pottery. This is an area where you can consult our guide and also talk to others who may have done the show previously.
4. What season of the year is it ? If the show is outdoors in the summer in Florida, you can almost count on the event being over by mid-afternoon as the rain showers hit. Even if the rain never comes, it will be so hot hardly anyone will show up anyway.
5. What is the overall economic climate of the area? These figures are usually available from the local chamber of commerce or local economic development board. Many times areas with an extremely high per capita income is better for fine art than it is for crafts. A middle income area seems to work well for crafts in my experience and a low income area doesn’t work for anyone!
6. What are the age demographics of the population in the area. I like to visit with our older citizens as much as the other guy, but the don’t have a lot of room back at the retirement home to do custom decorating and storage space for everything is limited. Likewise young families, around an area dominated by transient military for instance, may be much more concerned about buying diapers and food than about buying your work.
7. Does your work appeal to specific ethnic groups? Some groups of people have a particular interest in work about the holocaust for instance while others don’t even know it ever happened.
8. Does your work lend itself to a particular area of the country? Work involving migratory birds around the Chesapeake for instance may sell like hotcakes in Baltimore, MD and may generate no interest at all in Everglades City, FL. This is an area where you have to be particularly sensitive about the geographic uniqueness of your particular area. Many people in North Dakota could probably care less about a manatee, whereas in Florida you’d have to be deaf, dumb and blind not to hear about their plight on a regular basis making them popular subjects for all kinds of art and crafts.
This list is not meant to be a catch-all for every consideration you must make about the events in which you participate, it is however intended to get you thinking about what makes you work sell. If would could boil every risk down to another point on our checklist, we’d probably write something that resembles the New York City phone book and the event would be over before you finished analyzing it. It is important however to set specific minimum criteria for events you’re willing to lay out money to participate in. To help, you may want to develop a scoring system for each of those points. For example, an event may score a 6 out of 10 for previous sales, but because it’s so far away it scores a minus 6 for distance from home. On the other hand an alternate event for the weekend scores a 4 for sales and only a minus 1 for distance and it wins when comparing these two aspects of the show. Think back to your most successful show you’ve ever done and write down all the things you think made it successful. Create a scoring system of -10 to +10 and rate the various factors… make note of the score. Do the same thing for the least successful show you’ve ever done and make not of it’s score. Every other event you’ve participated in should fall somewhere in between. This idea won’t be like having a crystal ball, but when you begin to add some system to the madness of this business, it goes a long way toward making better decisions and better sales at all your shows !
The other question that goes hand in hand with this issue… and is just as important, is the treatment we get at events from the sponsors. In many cases, far worse than the large show fee increase is the attitude with which it was presented. Basically the situation we talked about earlier in this article was a “tough luck” “like it or lump it” sort of scenario. I hear about this kind of thing going on all the time. Some totalitarian type of person is in charge of a show and decides that this is his or her first step in filling the shoes of Adolf Hitler! Once again the market must determine the tolerance level exhibitors have. Personally I can’t imagine being so desperate for a show that I would take any grief from anyone. After all, you’re the one spending the money… and the shows are absolutely nothing without you! Have you ever seen an art or craft show with no artists or craftsmen? Just take a look at an old country road about 3am and you’ll see the same level of excitement. You see, the solution to ill mannered, ill tempered show sponsors who charge too much money and yell way too much is just simply quit handing them money to do their shows! Tell them you don’t like it so they can lump it! With over 16,000 events to pick from throughout the year certainly there is a better, more appropriate event you can choose. Need a hand finding it? Give us a call or send us an email… we’ll see what we can do. If exhibitors collectively agree that a particular show or show sponsor is way out of line quit giving them money and they’ll go away. But as long as there’s someone who likes to hand out cash and be abused, those people will continue to be in business.
In the final analysis we hold tremendous bargaining power in the industry. The collective might of exhibitors is something to be reckoned with and a unified front to combat this type of behavior is almost always successful. The next time someone raises the show fees too high or comes on way too strong remember, each of us has the power to change things and if you take the initiative along with you fellow exhibitors the world is at your command. In the words of those who founded our country… “United We Stand” …it’s a powerful concept that’s as true today, in our situation, as it was over 200 years ago.