I apologize for being away for such a long time. As with any new business, a lot's been happening and the blog has been sadly neglected. Some of the changes/happenings include a new website at www.paceasy.com, along with a new shopping cart reached either through PacEasy or through www.makelifeneat.com, and a new blog site! Still working on the color scheme and organization, but it's a necessary change. So, please visit at www.cluelessentrepreneurs.com
Friday, October 3, 2008
Wednesday, July 23, 2008
WHAT IS YOUR "NATURAL GIVE"?
This will be a quickie on a topic that is becoming more relevant as we become more well known—charitable giving.
Face it. When you are small and cash flow is a frequent struggle and bills are mounting, it is difficult to shell out cold, hard cash every time a charity rings, and it often does not feel right, which is what this blog is really about.
As a business, we are solicited to provide products and cash for charities, gift bags, raffles, auctions, and the like, or provide time to various causes and charitable events.
Some of these requests hit like a lead balloon, and some actually feel pretty good to me. I took a look at the types of things that felt good to us and those that did not, and this idea of a Natural Give hit me. Asked about startup businesses and charitable giving the other day, I turned to this idea of Natural Give.
I define Natural Give as that type of giving that feels effortless and sustainable to you and your company, that feels right whether it results in sales or PR or not. We have discovered that our natural gives are 1) small product donations to local community events for raffles and auctions; and 2) providing entrepreneurial mentoring time to local youth; and 3) providing information to and sharing experiences with other business people who read this blog. Having defined our Natural Give, we stick with it. We do not sponsor teams, or donate cash or multitudes of gift bag freebies to local organizations (one organization wanted a gift bag donation of 300 pieces, a little much for us right now).
Peter Shankman’s help-a-reporter site is a great example of a very successful Natural Give that I am sure involved some money, but mostly Peter’s time and his natural talent for connecting people. In an effort to help reporters and sources get together, Peter created a thrice-daily email that in a very short time has reached over 16,000 people, connecting them all and helping everyone. We have certainly benefited from help-a-reporter, and the reporters we have contacted have certainly benefited from talking to us.
So, instead of feeling guilty every time you are solicited to give, find your Natural Give and stick to it. Remember that there are others out there whose Natural Give is different from yours, so many types of giving are occurring all over the place, even though you are not participating in all of them.
Tuesday, July 8, 2008
SCAMS
The other morning I received an intriguing email from someone wanting price lists, if I shipped overseas, and if I took credit cards. We startup manufacturers love to get emails like these, but this one just did not seem right. Here is the text:
Hello Sales,
I am interested in purchasing some of your products, I will like to know if you can ship directly to
I await your quick response.
Kind Regards.
Mario Hernandez
Addresss
3M SUPPLY AU
Mona Vale,NSW 2103
Phone: +61 243 607 865
FAX: +61 243 636 6785
I put the email address in Google, and not much popped up, but on Mr. Pinball's site, this address was listed on the scammers page. Thank you Mr. Pinball! I emailed Mr. Pinball, thanking him for taking the time to keep up the scammers page, and he sent back some very helpful information:
Hi Gretchen.
I'm glad you found out about this thief. We are contacted daily by people like yourself who discovered our list of scammers and are grateful they found us.
If you run across any more of these types of scammers, please forward their emails to us and we'll post their information for all to see.
These scams are primarily from outside the USA and as such, little can be done about them. If they have a confederate inside the US (such as someone sending a counterfeit check) then that US-based person can be prosecuted.
I recommend any of the following courses of action.
1. Ignore any further contact from the scammer. They will just go away because they will realize that they are getting nowhere with you.
2. Lead them on and let them believe you are interested. If they want to pay you with a credit card, then let them send you the credit card information.
Report the credit card information to the credit card company as stolen.
Then tell them the credit card number is bad. They will often volunteer another card. Repeat until they run out of numbers or lose interest.
3. If they want you to pay them for something, then just ignore them. Do NOT educate them as to how you found out they are a scammer. Educating them just makes them better at fooling the next person.
4. Report them to their email provider at the designated abuse address, which should be something like abuse@yahoo.com and get them to terminate the account. Be sure to include full headers so they can verify that the account is being used for fraud. Terminating an account will stop all the scams in progress with that account and so will probably be the most helpful. The main problem with doing this is that it may take several days for the provider to get around to verifying and terminating the account. Although I can't recommend this, sending lots of email to the account can fill up their mailbox and prevent them from getting mail. Doing this sort of action may violate your email provider's Terms of Service and may get you in trouble--that's why I don't recommend this--but be aware that it is probably the *most* effective action that can be taken once you report them to the appropriate abuse account.
Whatever you do, DO NOT cash the check they may send or send them money.
Attempting to cash a known counterfeit check is a felony. Sending them money means you will NEVER get the money back. These countries where they want you to wire the money do not require a government ID to pick up money, so any money you send will be lost with no recourse.
Regards,
Daina
I will know what to look for when something does not quite feel right from now on. I am sure as we grow, we will be the target of more types of scams having to do with manufacturing. I will post them as they happen.
For now, please do be careful and if you have been caught in a scam, please post a comment.
Tuesday, July 1, 2008
INDEPENDENT REPS PART 3 - HIRING ONE
First off, look for reps who work with products you sell. If you sell a toy product, don’t sign on with a rep who sells housewares. Second, look for reps who sell to those outlets and regions in which you are interested, i.e. brick-mortar retailers, catalogs, online retailers, large chain stores, independent specialty stores, nationwide, regionwide, etc. When putting out information about what you are searching for, be sure to include your parameters. Personally, I would steer clear of any rep who claims he/she can do it all and cover everything. It just does not work that way.
Based on our aforementioned education, when a rep is interested in our products, we have a sheet prepared that we hand to them. If they still feel like working with us after reading the information, then we move forward.
Here is what our sheet contains:
1. A company introduction. One short paragraph about what our company manufactures and where our products are currently sold (not names, just regionally or nationally).
2. A sentence or two defining what kind of rep you are looking for (e.g., “if you have proven experience with placing _________, __________, or _______, we would be interested in talking to you.”). Also, list your preferred outlets in this paragraph.
3. For our screening process, we ask for a resume that includes or is accompanied by 1) list of current retailers they work with, 2) three business references, 3) the names of three buyers the rep works with directly and their contact information, and 4) a list of product lines the rep represents.
We then include our full contact information and where to send the resume and supporting information.
In some cases, we will work with the rep without having all of the information. If the rep does not flinch at the information we request and run the other way, they probably are quite interested in selling our product and confident they can do it.
Once a rep is interested, we negotiate an agreement. We have devised our own agreement, and that is the one we use. It covers everything, including territories, payment terms, and the number of samples that will be provided.
Now, with all of this in place, we are comfortable working with reps and confident that we will not incur financial disasters in doing so. Good luck! Feel free to contact us with any questions.
Friday, June 13, 2008
INDEPENDENT REPS PART 2 - WHERE DO YOU FIND THEM?
What seems ages ago, we went searching on the Internet for reps. We emailed a couple, never heard back, or when we did, they did not want to rep our products. Why not? We will never know. We have been told that it’s because no matter how good your product is, reps just don’t like to touch new products because it’s too much work. I can’t back that up with any solid evidence. Our banker recommended us to a couple of local reps, clients of hers, but neither of them called us.
We went to a public trade show and a rep stopped by. He was interested in our products, made all sorts of pie-in-the-sky promises, then promptly disappeared from planet earth after the show and we never heard from him again. Lucky for us, he did not take any product or money with him. As green as we were, we probably would have given him whatever he wanted.
Others I know have been contacted by reps who saw their products in a store already, or online. Reps like this, I think, because they know the product is sellable.
Lately, a number of chat rooms and forums for specific industries have been popping up, where manufacturers, reps, retail business owners, and industry buyers chat, trade info, and scout prospects and products. One woman I know recently picked up a rep this way. These forums can be as specific as baby carriers and as general as toys. I have not yet discovered one for our industry, but it is probably only a matter of time.
Ultimately, we did not find any reps, they found us at the buyer shows we attended. We currently utilize three agencies. So far, the arrangement is working well, and we like the individuals with whom we deal.
I am sure there are other avenues for getting in front of reps (winning awards, Oprah contests, maybe a plug on Donny Deutsch). One way is to piggyback on an existing product. If you have a friend or family member making a similar item or in the same product category, you can probably contact the reps they work with to see if they might be interested in repping your product as well.
Another possibility is introductions by your booth neighbors at trade shows. We have actually seen this one work. For the most part, your booth neighbors are just as passionate about what they do as you are about what you do, and they love to share information and introduce you to their reps, especially if they know you are just starting out.
At our
I will cover what we learned about hiring reps in my next entry.
INDEPENDENT REPS PART 1 – THE HORROR OF IT ALL
Most startup manufacturers are led to believe that gathering a harem of reps around you is the holy grail, and that if a rep shows any interest at all, jump on board! Please, please do not leap just yet.
Horror stories abound about reps. One horror story I especially liked was the rep who demanded lots of samples and then ended up selling them at flea markets. Luckily, the client found out and stopped sending him samples before too much financial damage was done. I was chatting with one of my B Team buddies this morning, who relayed the story of the rep agency that took 80 samples off of her hands, after which she never heard from them again.
Most horror stories I have heard regard scads of samples provided, or scads of money paid, after which the rep is never heard from again. It is enough to make anyone recoil in horror at the thought of even acknowledging the existence of independent reps. This is unfortunate, as there are some excellent reps out there. Sorry reps, but if you are reading this blog, I can’t undo the damage that those who have gone before you have done.
We now work comfortably and confidently with three rep firms. In the next entry or two I will tell our tale, which I hope most of you will find useful.
Thursday, May 22, 2008
TRADE SHOWS PART 14 - MOVING IN AND OUT THE FREEMAN WAY
The buyer shows add another layer of complexity to the trade show experience. It is called Freeman. Freeman is a company that contracts with the company actually organizing the show. Freeman corners the market for handling the freight, booth building, electrical, video and other services for trade show exhibitors at shows across the country. They utilize union labor for all of their activities, which works well for Stanley Tools, not so well for startup entrepreneurs. I have no problem with unions and one of our products, the Bin Buddie, is and will always be made with American labor.
We had to ship our booth to
Freeman bled us dry in
Freeman indicates that you can indeed haul your own stuff in and out at these shows, and herein lies the tale. You show up at the loading dock, but you can’t haul your own stuff in from there. Because the loading areas are controlled by union labor, you can only watch helplessly as they unload your stuff, put it on a cart and take it to your booth for you as you walk beside the cart. We had one cart load of stuff and the bill for the 15-minute load and walk job would have been approximately $300.
Alternatively, we
Our decision not to utilize Freeman's services was confirmed when, on my trips to the booth, I kept passing a Teamster member and Freeman contractor napping on a roll of carpet. This might have been fine, except that this guy was on the clock, and the people standing in the nearest booth did not seem too happy that he was napping on their dime. Apparently and through no fault of their own (a Freeman problem, they explained), their boxes had not arrived at the booth. Mr. Teamster, apparently having nothing else to do, decided to nap until the goods arrived on the scene. His nap lasted 45 minutes. There was a great deal of activity occurring all over the place, so I find it hard to believe that there was nothing else for this man to do other than to take a nap on this exhibitor’s dime.
Moving out, was pretty much the same. We had our handtruck, a smaller cart, and as Thomas broke things down and packed boxes, I wheeled them out. For an hour we did this. On my last trip into the building, a young man began shouting across the lobby, then whistling. No one could figure out what was going on. Apparently, my handtruck was not “allowed” in the building. I found it rather odd that, after using it to move in and move most of my goods out, it would suddenly be a problem. In addition, many other exhibitors were doing the same thing. I checked with one of them and he indicated that he does this for most of his shows and this was the first time there had been a problem.
Apparently, we were all supposed to utilize the cart service. You know, the one that previously quoted me $300 for 15 minutes of labor. Additionally, the people running the cart service were to decide when we would be able to utilize the service, which could have been the next day if they felt like it. Remembering the napping Teamster, I informed the young man that I did not have $300, unleashed a verbal torrent of logical argument at him, and then turned and walked away, leaving him stunned and speechless. Gee, was it the logical part?
Freeman does have a rather vague definition of handtruck it uses to attempt to force you to pay $300 or more for 15 minutes of cart service, but since we had been approved on the way in, and we had loaded in and almost completely loaded out, I could not see what this person’s problem was. If he was concerned about a safety issue, one guy was using an electric cart with a plywood platform tied to the back of it with what looked to be a shoelace. The man would put the cart into high gear, and the platform would swing wildly from side to side, smacking aside anything in its path. No Teamster in sight showed the slightest interest in this man.
Overall, our best advice to startup entrepreneurs would be to keep your dealings with Freeman to a bare minimum and watch every fee they want to throw at you. Do as much as you can do yourself, and if you do have to utilize Freeman/, have someone at the booth at all times supervising to make sure you are not paying for nap time.
TRADE SHOWS PART 13 - MOVING IN AND OUT ("PUBLIC" SHOWS)
Moving in and out of shows is like taking a temp job and being faced with an unfamiliar copy machine. It’s supposed to be familiar and pretty easy to operate, but you know it’s the little things that will make it seem like a mountain instead of a molehill.
This blog is about the little things in a startup entrepreneur’s life, and when I polled a few, they all agreed that the move-in and move-out tasks were a great deal more stressful than they realized.
For shows open to the public, they have been pretty easy. You go, you park, you unload. On the last day, you go, you park, and at the end of the day, you load. However, here are some suggestions for making things easier on you, especially if it is your first time:
Moving In
1. Before you even go, find out exactly where you are supposed to go to “load in”, or move into your booth. It can be outside, inside, on a loading dock, at a certain door, etc. Once I get my show information, I review a diagram of the facility where the show is to be held and the directions given me. I look for the traffic patterns, where the doors are, where the loading dock is, and where my booth is in relation to all of this. If the directions in the materials are not clear, I call or email and ask for clarification. I need to do much less asking now, but at first it was a common occurrence.
3. Plan to arrive and move in as early as possible. It gets nuts as the day goes on. Often, if I can get there right when move-in opens, I can be in and out before things get out of hand.
3. If you have kids, make arrangements for care ahead of time. This is no place for kids , and most shows prohibit anyone under 16 during move-in and move-out times. Sharp objects, exposed electrical equipment with lots of voltage, forklifts and other heavy equipment, and stacks of heavy, teetering boxes are everywhere.
2. Give yourself lots of time. Don’t plan any other activities for the move-in day. Just plan to move in and nothing else. I speak from experience (the Fed Ex guy is nice, but can’t hold the truck because I got held up trying to move in).
2. Find out how much it will cost you to park to move in, and what the details are. Do you need to pay for parking before you can get onto the loading dock or into the parking lot closest to the door you need to use? In most cases, parking is free for moving in. Some places have a time limit—only the first hour or two is free, and then you pay. Knowing ahead of time will help you strategize. Qwest Field in
3. What are the parking arrangements? You can buy a pass for the duration of the show or pay by the day. The pass allows in-out privileges, the daily tickets don’t. Assess your needs, alternate travel and parking arrangements, and buy accordingly. Often, you cannot buy a multi-day pass once the show has started, so if you need a pass, get it when you move in. If you are staying in an RV, public shows often have special RV parking rates for overnighters.
4. Before unloading, find the show desk, check in, get any questions answered and problems solved, locate your booth space and the best route to take to get your stuff to it, and only then unload your stuff and move it to your booth. It will save you all kinds of stress and make loading in faster and easier. Your goods are safe in your vehicle until you are ready to deal with them no one has to stand around with a load of stuff while you check in and find your booth space.
5. A note about cart services. In some places carts are provided free of charge. In other facilities, you pay ($35 or so for half an hour) for cart rental. In many cases, the half hour cart rental includes getting back to your booth with your cart and then getting it back to the rental place. If you are a ten-minute walk away, you can see the problem. We suggest investing in a good handtruck/dolly/cart thing that can fit into your vehicle, and/or a folding, heavy-duty “luggage” cart. This goes back to a previous blog entry regarding booth design and portability.
4. Be courteous. People are tired and running on caffeine and adrenaline, and there is a great deal of activity occurring. I try to be conscious of others as I wheel my way through the maze. Introduce yourself to your booth neighbors when you get the chance. Offer to assist during setup if you see someone in need. Good vibes go a long way.
Moving Out
Moving out is much the same as moving in, only it happens much quicker. Some shows only give you eight to 10 hours to move out; others you can also do things the following day. On the final day of the show, I park strategically in the morning (arrive earlier and park as close as possible and in a place that allows the truck to be easily loaded. When the show ends, I can break down my booth and, using my nifty cart/handtruck, I can simply haul my stuff to the truck in the parking area. I may have to haul my stuff farther, but I get some exercise and get out of there a lot sooner and with a great deal less hassle than if I had attempted to utilize the load-out area provided.
If the show is local and I can come back the next day, I do so. I break down the booth and pack up everything, leave it at my space and leave the mayhem behind, go to the Bamboo Bar and Grill for some relaxation and recap with friends and family, then come back the next morning when there is no traffic or mayhem. I can often drive right to my booth space (even in a convention center or stadium), pack up the truck on the spot, and head out. With gas prices the way they are, though, I may have to rethink this strategy.
TRADE SHOWS PART 12 - VEGAS RECAP
The National Hardware Show in Vegas turned out to be a great show for us, even better than the International Home and Housewares Show in
In
Additionally, the conversations we had in Vegas were quite relevant and convinced us make some major changes in our product manufacturing and marketing strategies, which will help our growth tremendously in the long run. We did not get the same kind of feedback in
It may have helped that we changed our booth design for the Vegas show, but it seemed to be more than that. It seemed to be the focus of the event organizers on buying versus browsing. It cost attendees $100 to get into the show, no one under 18 was admitted (no moms and babies out for the day), there were some serious efforts to promote networking among show participants, and overall, it was just a more professional and productive experience.
We will definitely be going back to Vegas, we don’t know yet about
TRADE SHOWS PART 11 - ADVERTISING
When you sign up for a trade show, you will be inundated with faxes and emails wanting you to spend money on various forms of advertising before, during and after the show. These include sponsored emails, video clips, ads in trade show publications, spots on various websites, electronic panel displays, new product showcase, etc. All in all, a dizzying array of possibilities for the show organizers to make more money off of you.
Enough already! Hang onto your hard-earned, limited dollars. Thomas, Mr. Sales and Marketing, has spent a great deal of time reviewing this information and testing out a couple of these ploys with our products, and he has concluded that the only one on which he would spend money again is an ad in the show’s publication that is handed out during the show. It’s a big, glossy magazine that mostly contains ads and articles about new products. Everyone picks one up and at least passively leafs through it, so this publication has the potential top present your product to a pretty wide audience.
I must add a caveat here. We did buy space in a “new product showcase” at our target show, the International Home and Housewares Show, and it may indeed be the one thing that gets us into Real Simple Magazine. It was where they discovered our products, rather than seeing our booth. As with most things in life, rules are better thought of as guidelines.
My personal experience tells me to avoid anything video. These shows resemble an ant farm, and my observation is that no one stands still long enough to actually pay attention to anything video.
I would also stay away from anything to do with broadcast emails to show attendees. Organizers put out so many emails prior to the show that I am sure no one has the time to read them. I end up deleting most of them without opening them.
I have a similar opinion of website advertising. Once I download the manual and get the information I need, I only rarely visit the show’s website again because I simply don’t need to. The site may get lots of hits, but your ad won’t necessarily get noticed.
I received a call the other day from a woman wanting us to spend another $300 putting our fliers in a display rack for buyers to take and to drive traffic to our booth. Since our limited experience points to the fact that buyers do not really utilize this information, we opted out.
We have learned that most buyers spend one day at the show, they know what they are looking for, and they don’t spend a lot of time perusing pieces of information first. They hit the show floor running, booth after booth, dismissing in a millisecond all that is not in their product category, and move on. What’s probably going to catch their attention the most is good, catchy, booth design that allows them to quickly scan and understand your wares and make a decision about your company’s products and ability to deliver the quantities they need.
Monday, May 5, 2008
TRADE SHOWS PART 10 - CHEAP CHEAP CHEAP!
We are on our way to Vegas for the National Hardware Show. We have no money despite how well we are doing, so we are going on the cheap. I can’t say that our cheap fixes will work for you, but perhaps we can give you some ideas that you can modify to suit your needs:
1. You can’t always find a show in a town where you have friends or relatives to stay with, but if you can, crash their pads. These people want you to be successful, and they feel invested in the process of getting you there when they can help out by providing a place to stay for the show or stop overnight on your way there.
1a. If you belong to a timeshare, stay there if you can! Also, many of these companies offer discounted airline tickets or other perks that can be used to ease the financial burden of travel.2. Our friends and family, those who fly often and who have amassed airline miles they cannot use, have been very generous with them when we have needed them. We have had to buy four airline tickets since January, and all of them have been obtained with donated miles. Also, if you have a companion fare or a voucher, now is a good time to use them.
3. Spend some time calculating whether it would be cheaper to fly, drive, or get there by some other means. With airline tickets obtained using donated miles, it was definitely cheaper to fly from Seattle to Chicago and pay the $1000 it cost to ship our booth there and back rather than drive our truck across country for several days, paying for food, gas, and lodging along the way.
4. Some businesses have minimized their booth design such that they can get everything to a show via checked baggage and mailing a few extra boxes to the place they are staying. Most hotels and motels will accept your packages if you are a paying guest and they know ahead of time the boxes are coming.
5. Although we could not financially justify buying a ready-made booth backdrop, they can potentially save you a lot of money if 1) exhibit at shows frequently, and 2) the rest of your display can be boxed and shipped. New, they cost about $2500 apiece. However, they fold into their own shipping container and can be carried as checked luggage or shipped via UPS or Fed Ex. This gives you more flexibility in your shipping options which can lead to substantial savings, making the backdrop pay for itself over time.
6. The reservation services the show provides don’t usually have the best travel and lodging deals. You can get better deals searching on your own online for travel deals and budget hotels near the show location. For our Vegas show the cheapest room through the booking service was about $120 per night. I found us the Villa Roma Inn, which received uniformly great reviews on TripAdvisor. We have wi-fi, a pool and patio area, we are off the Strip, and we are easy walking distance to both the Strip and the convention center. We are sharing a room with two double beds, and our five-night stay is less than $300 for the two of us.
7. If you can, bring food, water, drinks, etc. on show days. Convention centers have uniformly mediocre food at best that is way overpriced. You and your pocketbook will be much happier with your own food and drinks.
That’s all I have for now. As always, sharing is good—keep the comments coming.
Monday, April 28, 2008
TRADE SHOWS PART NINE - OUR RETAIL BOOTH
I handle all of our retail activities, and our retail booth gets used frequently. I participate in the Fremont Sunday Market (a weekly flea/entrepreneurial market in
As you can see, the the booth can be set up either indoors or out. I discussed signs in the previous posting. The table and chairs are mom's cardtable hand-me-downs. The shelving is plastic, two four-tier units, one for each side of the booth, and I put two-tiered sections end to end. Each four-tier unit cost $20 at Lowe's. This shelving goes together and comes apart easily. The signs for our "strip" products are hanging on gridwall, two pieces of 2x6' gridwall each side of the booth. I got the gridwall for about $8 per piece off of craigslist. It is also available at any fixture supply store. We also have hooks and shelves for the gridwall, which were surprisingly inexpensive. Be sure to check out craigslist for used supplies.
I mentioned briefly fire retardant materials. Be aware that for indoor shows, you will need fire reisistant display items in your booth. You can use fire retardant fabrics, or treat flammable display items with fire retardant spray (anything wood, bamboo, or straw, especially) The spray is about $20 per quart spray bottle or about $45 per gallon. You can get the spray at a costume and display store or a theatrical supply store. The paperwork you receive makes the fire thing sound ominous and fraught with danger, but we have yet to encounter a problem. Regardless, it is good to be aware of the regulations and follow them as closely as possible.
You will need a 10x10 canopy if you do outdoor events, If you spend money anywhere, spend it on the canopy and sidewalls, essential where rain showers or blazing sun are an issue. My favorite canopy company is KD Kanopy. John provides gold-plated customer service, and their products are quality through and through. They are also rather pricey. You can use a backyard canopy, even, if you have one. Once again, be sure to check out craigslist for used canopies. I own a pedestrian Quikshade and sidewalls. My canopy cost me about $140 new at a local sporting goods store and the sidewalls I bought online, $130 total for three.
You will need weights for your canopy (20 lbs per leg), which can be made of just about anything--buckets of sand, cylinders of sand or cement, barbell weights, anything else you can find that is cheap or free, and sufficient bungee cords to tie them to the legs or frame. You can also buy weights that are made for the canopy.
I don't think I have anything more to add at this point. Again, keep the comments coming!
Saturday, April 19, 2008
TRADE SHOWS PART 8 – OUR BOOTH DESIGN
1. The clutter factor.
2. The color factor.
3. The labor factor.
4. The cost factor.
I want to start by discussing what you get when you plunk your money down for a booth. We are participating in three buyer shows (nonpublic) this year, and all of them have different booth configurations. It’s maddening. If you sign up for a buyer’s show, pay close attention to the exhibitor manual to determine what the booth configuration requirements are.
By configuration, I mean kind of booth space is provided for you. For our three buyer shows this year, we are encountering three different configurations (a different one for each show!):
1. A spot on the floor. Nothing else. You provide everything else, including a solid back wall (no pipe/drape allowed). (Our
2. A booth with eight-foot pipe/drape walls on three sides. You don’t get to pick the color. (Our
3. A booth with an eight-foot pipe/drape back and three-foot pipe/drape sidewalls on each side. Again, you don’t get to pick the color. You will often have height restrictions for your display with this type of booth as well. (Our Vegas show)
Our booth is tiny—either a 10x10 space or a 10x15 space. Between our retail show booth and our buyer show booth, we have built in an enormous amount of flexibility that allows us to handle just about any configuration easily without spending more money. All told, I think we have spent about $500 on our retail booth (including the canopy and side panels for outdoor events) over the past couple of years and closer to $1000 for our buyer show booth.
Below is a picture of our buyer show booth setup in a space 10 feet wide by 15 feet deep. In this entry, I will discuss this booth setup in detail, including the supplies used and where we purchased them.
When we arrived at our first ever buyer show, the booth was 8-foot high muslin drape on all three sides. Great if you have a black sign and your merchandise pops against muslin. Our signs are white. They disappeared into the muslin. Luckily, this show was in
Our next show, the International Home and Housewares Show in
This panel idea is considered pipe and drape, and we received a violation notice for such (they do not allow pipe and drape of any kind). We did not understand the whole pipe and drape thing yet. By the end of show, however, we were informed that we could use the same configuration next year. Go figure.
This blue fabric is not flame retardant, which could be an issue at some shows.
Now to the pedestals. We priced pedestals, and ouch! Not in our budget. So, we made them. We ordered 12”x12”x40” cardboard boxes for $2.09 apiece from ULine. We bought fire-retardant fabric for $3.45 per yard from the local costume/display supply store (Display & Costume Supply) and made covers for the boxes. The different heights are achieved by cutting off the boxes at different lengths. We then fold the fabric up inside the box and tape it. They look great, and people always want to buy the covers from us. To create a smooth top, we put 12”x12” polystyrene plastic squares on the tops of the boxes under the fabric. These are not necessary, but they square things up nicely. You can get the plastic from a local plastic supplier like Tap Plastics and have them cut it for you. All told, the pedestals cost us $8.15 apiece. We placed empty packaging boxes on top of them. Our pedestals allow easy access to the booth and allow one to quickly scan our goods while keeping clutter to a minimum.
We design our own signs. We then email the files to U Printing in
The fabric banners and tablecloth are from the local fabric store. One yard gives us three banners, so the banners and tablecloth fabric on sale cost us about $20.
We splurged on a new, smaller folding, shippable table, which cost us $22 at Costco. The chairs, small and lightweight, cost $17 apiece at our local variety store.
The flooring is 2”x2”, 3/8” thick foam squares that puzzle together. We paid $104 for 125 square feet through GetRung. You can buy thicker ones, but the thinner ones ship great, and with the carrying case, they can go as checked baggage on a plane. So, we like the thinner ones better. You can also buy carpet squares or rent carpet for your booth.
The other goodies are plastic sign holders and easels that we get at Best Fixtures International, our local fixture supply store. They probably cost us about $20 for what you see there.
Other than a few office supplies and informational fliers, that’s about it for us. I am sure I am forgetting something, but I hope this helps you. Happy planning!
Friday, April 18, 2008
TRADE SHOWS PART 7 – FROM THE BEGINNING
I noticed that I have been getting rather haphazard about the trade show information. My intent was to take you step by step through the process, not to bounce around here and there with our experiences. Once again, be aware that this information is all based on our experiences, and others may be different, more efficient, cheaper, etc. Additionally, keep those comments coming! Every comment goes a long way toward the collective education of clueless entrepreneurs everywhere. At least those who tune in to this blog.
I previously covered why we do trade shows of various kinds (doesn’t mean you should), how to find out about them and whether to sign up and lay down your dollars.
You’ve decided to go ahead and sign up for one, either a public or buyer show (not open to public). Now what?
1. Download the manual or any other available materials and read them! We have learned to do this before we do anything else. It may take some time after you sign up for the show for the manual to be available online or mailed to you, but make sure you read it the as soon as possible after it becomes available. It tells you how and by what date to order exhorbitantly expensive electricity, video, scantily-clad women to show off your wares for you, carpet, booth setups, and just about anything else you may need (we don’t rent anything). It provides shipping information, driving instructions, decorating instructions and requirements, booth configurations, and many other things. We immediately calendar any relevant dates. We also decide, based on the move-in and move-out schedules, what our travel arrangements will be.
For a local street fair or other public show, there will be no manual, but you will receive instructional materials. You just mainly need to know what times and days you can move in and move out and by what means.
After reviewing the manual, we call or email and get any questions we still have answered. We also calendar the booth assignment date. We call if we have not received notice by that date. It sometimes happens that the event company will take your money and forget to put you in the system.
2. Think about how you will get your booth equipment to the show. Will you drive and unload yourself, fly and ship, fly and bring your stuff as luggage, or some other combination? This ties into the design of your booth as well. If you plan to have an armoire in your booth, you most likely will have to ship it unless you live in the same city as the show.
You will be inundated with faxes and emails from shipping companies that want to give you a quote for shipping your goods to the show, even in you live in the same city as the show. If you plan to ship, go ahead and get a few quotes. The shipping setups are extremely easy—the truck comes to your house and picks up your boxes, moves them to the show site, and delivers them to your booth. All you do is get to the show, unpack, and set up. Empty boxes are then stored and returned to you after the show. You simply repack the boxes at your booth, leave them there and take off!
We are based in
Our next show is in
So, those are the first two steps we take. Concurrent with this is the booth design, which I will cover at length in the next few entries.
Wednesday, February 27, 2008
TRADE SHOWS PART 6—THINKING ABOUT YOUR BOOTH
1. The clutter factor. Make sure that people are not overwhelmed by the stuff in your booth and that they can move freely and quickly around it. Buyers know what they are looking for and it does not take them long to cruise the wares. Make sure that they can cruise yours quickly and efficiently—it leaves a good impression.
2. The color factor. Our mentor told us to add color color color! You don’t have to go overboard, but tasteful use of much color catches the eye of passersby quite well. If you are in the middle of an aisle, as we are the more eye catching you can do, the better. We made up royal blue sidewalls for our booth, which makes our signage and products pop!
3. The labor factor. Can you and at most one other person set up and break down your booth? The labor fees the show coordinators charge for booth setup and breakdown are outrageous! I would think of a booth design that can be transported in a canopied pickup or a rented van and that can be set up with you and at most one other cheap helper. We accomplish structure very cheaply and efficiently, and I will be putting this info in the blog with the booth pics. We also use lots of fabric and “soft” items that roll and fold and fit compactly into boxes.
4. The cost factor. You can put together a very successful booth for less than $1,000. We routinely get offers to rent booth setups for $2000 and up per show. We can’t even consider that kind of money right now, nor would we ever. Our booth is designed specifically to show off our products. No rental booth can do that for us.
TRADE SHOWS PART 5
Our first ever buyer show, the Seattle Gift Show, ended on February 5. All in all, it was a good experience for us, although not in instant sales. Be forewarned: our industry mentors have informed us that the buyer shows are not for orders, but for contacts. So, go into them with the mindset of making as many contacts of various kinds as you can, rather than racking up as many orders as you can.
But, you say, these shows cost lots of money! If I don’t get a monetary return, what good is doing the show? That is a question everyone will have to answer for themselves. For us, the Seattle Gift Show was rather quiet. Too quiet for my taste, actually, but Mr. Sales and Marketing was satisfied. We gained the following: 1) possibly a new manufacturer who will bring our necessary up-front costs way down and allow us a great deal more flexibility in our overseas manufacturing, 2) exposure exposure exposure; and 3) face time with press people who stopped by and were only too willing to hand over their cards. This will all pay off in the long run, as other earlier efforts seem to be paying off for us this winter.
All of our show expenditures get charged to our advertising expenses, because in reality that’s what they are—a face-to-face advertising/networking opportunity (notice that two out of three mentioned in the previous paragraph are all about advertising). We have found word of mouth and face to face to be our most effective and certainly cheapest forms of advertising in the long run, and this is just one more networking avenue. What is nice about these shows is that you can choose your target audience, so you might think of the cost as the price to pay for accessing your most desirable demographic if your model is about business to business sales.
I will blog more about the specifics of our booth, moving in, moving out, and what we do to bring down the costs of transportation, food and lodging for these shows at the end of March when I have pics to post as visual aids. We can’t do these shows without the help of family and friends, so if you are hesitant to ask for help, now is the time to get over it.
Our next show is the International Home and Housewares Show in
Wednesday, January 2, 2008
CREDIT CARD PROCESSING PART 3 - THE OTHER STUFF
Here is a list of questions we have learned to ask when shopping for credit card processing:
1. Who are the gateway and processing companies?
2. What are the setup fees?
3. What is the monthly fee?
4. What is the statement fee and does it increase with low volume?
5. What is the discount rate?
6. What is the fee per transaction?
7. What is the monthly minimum?
8. What are the contract term and the early termination fee?
7. How long does it take the for the funds to appear in my bank account after approval? (Usually 48 hours. However, some processors only deposit funds every 14 days!)
8. Whom do I contact when I have questions or problems?
The PayPal Model
PayPal, ProPay, and 2checkout are third-party processing services. These companies accept online credit card orders on behalf of you or your company. Like processors, they charge small setup fee, a per-transaction fee, and a discount rate per transaction. Unlike processors, you do not have to open a merchant account and you pay no gateway fees, monthly fees, or statement fees. If you are just starting out and you only do credit card sales online, you might check out these services to see if they meet your needs until online sales take off.
We have a relatively low volume of credit card transactions overall. However, because we accept credit cards from direct retail sales and from our wholesale customers as well as online through our shopping cart, we cannot use PayPal. These services are intended for online shopping cart sales only.
CREDIT CARD PROCESSING PART 2 - THE MONEY
The Reseller
Resellers make their money from software you probably don’t need, monthly software “maintenance” fees, card processing supplies, card processing machines, and probably commissions from the gateway and processing companies they represent.
Most resellers charge a “setup” fee. I don’t know if this is a reseller charge, a gateway charge or a processor charge. I think it all depends on the underlying agreements between the reseller, gateway and processor.
Some resellers can also help you install a shopping cart. We build and maintain our own websites. We had no shopping cart experience, and one of the benefits of going with our first reseller, Merchant Express, was that they provided a shopping cart and installed it for us for a nominal fee. When we switched processors, we were able to do the necessary recoding of the shopping cart ourselves in a few minutes.
The Gateway
That “monthly fee” that is quoted when shopping for credit card services is the gateway company’s fee. They do not make their money any other way. As I mentioned previously, it may be possible to negotiate directly with gateway for a lower rate. This fee is usually $15 to $20 per month.
If you work directly with AuthorizeNet, they charge a setup fee. Because we had an existing account (we had to close that one due once again to Pipeline Data Processing’s terms), we could open a new one at a steep discount.
The Processor
The processor sets your per-transaction fee. This fee is usually a set amount per transaction (e.g., 10 cents per transaction) plus a “discount rate”. The discount rate includes the fee the credit card companies charge and a bit on top of that for the processor. The discount rate varies according to the number of transactions processed per month. From what I can gather, it appears that the transaction fees vary not because of the amount the credit card companies charge, but because of the amount the processor charges on top of that.
Many processors have a monthly minimum. So, if you have a very low volume of transactions, you will most likely pay the monthly minimum instead of an amount per transaction. You need to do some math to determine whether you will get hosed by the monthly minimum requirement versus having enough transactions to get the regular per-transaction free and discount rate. If you only take credit cards online, not in person, the way out of the minimum monthly trap is to use a service such as PayPal that does not require you to open a merchant account with a processor. I will talk more about the PayPal model in part 3.
Credit card companies and processors also charge different fees for different types of credit cards. I have never delved into this matter and I don’t intend to any time soon. Apparently, for a very high-risk, unsecured card, the fee per transaction can be around $10. I have asked around, and I have found no vendors who had incurred such a fee, so it’s probably pretty rare.
Another fee the processor charges is the “statement fee.” I don’t know why you are charged to receive your statement every month. We no longer pay a statement fee with our new processor, Nova. Our old statement fee through Pipeline Data Processing worked out to $19.99 per month, which is astronomically high. I don’t recommend Pipeline Data Processing for a number of reasons, mostly having to do with money. Statement fees tend to run from $8 to $12 per month.
Still another fee the processor charges is the dreaded early termination fee, same as your cell phone provider. Before you sign up for services, it is important to know what the contract term is and what the early termination fee is. We were recently hosed by Pipeline Data Processing (3 years and $300), but most are not this drastic. Our current agreement is 2 years and a $95 early termination fee.
CREDIT CARD PROCESSING PART 1 – THE PLAYERS
I am sure some of you had this system down pat within 10 minutes, understand it intuitively and wonder what all the fuss is about and why I am devoting blog space to credit card processing. Some others of you will worship the ground I walk on after this little series. I will update credit card processing on the blog as I learn more, but I think I now have the basics down.
I have posted the separate blog entries at the same time so that you don’t have to wait for the information. This first part will introduce you to all of the players involved in processing a credit card transaction. The second part will cover fees, and the third part will cover the questions we have learned to ask when shopping for credit card processing, The PayPal system, and anything else that might be helpful.
Processing a credit card transaction involves five to six different entities:
1. The reseller
2. The gateway
3. The processor, and possibly a separate billing company
4. The credit card companies
5. Your bank
I will now attempt to explain each of these entities, in order of their importance, not as listed above.
The Processor
This is where it’s at. This is the company that receives your credit card transaction request from the gateway and then passes the transaction along to the Credit Card Interchange (a network of financial entities that communicate to manage the processing, clearing, and settlement of credit card transactions) for approval and payment, receives the approval, and then transmits approval information back through the gateway to your terminal or computer. The part up through receiving all approvals takes about three to six seconds. Getting it into your bank account takes from 48 hours to 14 days, depending on the processor. Go figure.
The Gateway
Just as you sign up with AOL or Comcast or some other company to access the Internet, so you sign up with a gateway company such as AuthorizeNet or LinkPoint to access the credit card processing “Internet”. These companies take your transaction information and forward it to the nether regions for processing. They do not process anything or take a fee per transaction; they just receive your transaction information and pass it along to your processing company.
The gateway company also sends confirmation emails to the customer (you can customize them) and emails confirming the transaction to the merchant. Your shopping cart is hooked up to the gateway so that when a customer enters financial information on your website, it is automatically sent to the gateway and on to the processor, the merchant receives an email notice of the transaction from the gateway, and the customer receives a customized email confirmation.
There are several gateway companies and some processing companies have their own gateways. It seems that most resellers utilize AuthorizeNet. If you know of any others, please add a comment to share your information with others.
Because of our low volume, when selling retail we use a manual credit card imprinter and then enter the transactions on the computer later. To enter the transaction, we go directly to the gateway (AuthorizeNet), sign in and then enter the information directly to AuthorizeNet’s system via Virtual Terminal on their website. The transaction then goes into the system and to our processor, Nova, for the actual processing. More information regarding software and entering transactions is below in the Reseller section.
The Reseller
This is the company that packages credit card processing and gateway services and sells you those along with all of the other retail kitsch that comes with processing credit cards.
Instead of having to look for a separate gateway and processor on your own, the reseller does that for you. Most resellers represent a certain gateway/processor combo. The reseller takes your information, opens accounts with the gateway and processing companies on your behalf, sells you software you most likely don’t need, sells or leases you machines of various kinds, supplies those little Visa/Mastercard signs and stickers, supplies credit slips and other supplies, and handles your questions, problems and complaints. As far as I can tell, the reseller usually only represents one gateway/processor company combination.
It is important to note that the reseller usually does not set the fees for credit card processing, nor does it actually collect them. Resellers typically have deals with the processors and they can offer special fees or deals to you, the merchant, based on these underlying relationships. The reseller makes its money on things like processing machine sales and leasing, software for entering the transactions, monthly fees for software maintenance and upgrades, shopping cart services, and miscellaneous other fees and services.
A word about software. If you enter your transactions manually online, I am going to discourage buying software to enter your transactions from your reseller. Why? Because it’s expensive and unnecessary in most cases. The software a reseller sells does exactly the same thing that AuthorizeNet’s Virtual Terminal does--sends the information into the gateway--and Virtual Terminal is a free, web-based application (see previous information). Resellers have quoted us $149 to $230 for the software and most want a monthly “maintenance” fee of $8 to $20. Once your account is set up through AuthorizeNet (you can create an account directly with them or through a reseller), you should be able to access Virtual Terminal and use it. I don’t know if other gateways have similar systems available.
Merchant Express and Costco are the two resellers with which we have experience. Resellers are all over the web. This is a commission-driven business, so beware of the person on the other end of the phone. You will most likely end up with someone who resembles the stereotype of the used car salesman. Many banks are now contracting with resellers and their associated gateway/processor. That way, they can still offer credit card processing to their business customers without having to maintain their own complex, expensive processing/gatway apparatus.
Purchasing Services Separately
We just discovered that you can put together your own package of gateway and processor, if you dare. I was recently able to go directly to AuthorizeNet, set up a new account and then because of our low volume, get a monthly fee quote directly from AuthorizeNet that was $5 per month lower than what the reseller was quoting. I then had to get a couple of codes and numbers from the processor and enter them into my account information on the AuthorizeNet website to allow the processor and AuthorizeNet to talk to each other, and it was relatively easy to do. I probably won’t be purchasing services separately anytime soon, but I mention it for those of you who might want to try to do it.
Now that I have succeeded in giving you a mother of a headache, I will end with a quick summary of what actually happens when you swipe a card or enter a transaction on your computer:
1. Card is swiped and information is transferred to the gateway company. Alternatively, information is entered directly into the gateway.
2. Transaction information is sent to the processor.
3. The processor sends the information on to the Credit Card Interchange.
4. The approval/rejection information goes back to the processor.
5. The information then goes from the processor back to the gateway.
6. Acceptance/rejection information is transmitted from the gateway to the merchant.
The above all happens in about 3 seconds.
7. After about 48 hours to 14 days, money is deposited into the merchant’s bank account.
For a graphic representation, here is a website that you might find helpful:
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