On Business: Conning Profit Margins

By | Monday, April 28, 2014 Leave a Comment
I attended C2E2 this weekend and had a great time. Always a fun show for me! But there were also several business-type things I noticed while I was there that I thought I could point out in this week's column.

I talked with several creators in Artists Alley about how the show was going for them at multiple points over the weekend. To a person, they all said they were having a great show. Lots of people buying stuff, and everyone seemed happy they tabled there.

I talked with one dealer, and he was less than thrilled with business. He said they were at least breaking even, and he enjoyed himself, but he didn't make a lot of profit. I suspect he might make a point of not figuring out what his hourly wage would work out to.

I also talked with Brigid Alverson, who had chatted with several of the larger publishers. She gave me the impression that it wasn't a particularly stellar show for any of them. (Although keep in mind, of course, that I'm hearing this last bit third-hand.)

So why this disparity? It certainly wasn't for a lack of people -- the early estimates I heard put attendance up by at least 10,000 over last year.

Well, the dealer I spoke with was pretty matter of fact with what he was having problems with. He recognized that he had too few items available at really low price points (many for only one dollar), and hardly anything at the higher ones. So while he was selling a fair amount, and had decent booth traffic, his overhead (namely, the booth fee) was high enough that he wasn't able to make up it in the volume. For the type of merchandise he had, he does much better at smaller shows with an appropriately lower registration fee.

The creators I spoke with had mostly mid-range items, primarily $10-$20 books and prints. Plus because they were (mostly) only doing tables in Artists Alley, they had lower registration fees than a dealer setting up a full booth. So they have to sell fewer items to get the same revenue, and they have a lower threshold to cross in order to break even. Add on to that a much higher number of bigger ticket items ($100-$200 for a page of original production art) and it's much easier to have a good convention.

Then there are the larger publishers who take up a good amount of floor space towards the front of the convention. They have to shell out a lot more cash for a show like this -- first because they're using more space than a typical dealer booth, and second because they're (frequently) asking to be placed up front where there's more immediate visibility. But then they're primarily limiting their income to those mid-range items. People seemed happy to drop $25-$50 bucks on books and t-shirts and such, but they didn't have (that I saw, at any rate) any large ticket items. Which means that they'd have to sell an awful lot of people spending $25 to make up for the investment.

While I don't have specific numbers for any of these examples, I think the economics of attending any given show is a point worth considering. Who is the show's audience? What price points do you have available? How much do you have to spend in registration fees? It's great to say you're tabling at such-and-such convention, but you need to make sure to put your business hat on, too, in order to ensure that you make it worthwhile.

The other, unrelated and relatively small, point I'd like to make is with the convention center itself. Here's a picture of part of the con floor from Sunday afternoon...
Notice that there's a black curtain that runs along the back to determine the show's perimeter. But beyond that, there's another 100 feet along two walls of the hall that isn't being used at all. Which strongly implies that ReedPop's move from one building to another this year was expressly one with growth in mind. Not only to be a larger show this year, but to have room for expansion. They could easily grow another 25% next year with no crowding issues to speak of. It's possible they wanted to fill the whole space this year and just couldn't get enough dealers/artists/publishers to come, but I suspect that's not the case. Admittedly, that's only a hunch on my part, but something to keep an eye on going forward.

There's always a LOT going on at a convention, especially ones of this size, but I think it's always worth it to look at a show from multiple angles to really gauge its success. How many people showed up and how much noise they made is worth noting, but what else is going on that lends itself to analysis? Who was making money and who wasn't? What was -- or wasn't -- being done to keep the crowd from getting too crowded, but also keeping them restricted enough so that the show doesn't feel empty? These overhead photos are always cool because you get a pretty wide view of the con floor full of people, but what details can spot in them that speak to a less obvious goings-on? Just some things to think about.
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