China, Color Consistency, Communication, Customer Service, Discount Prices, Industry Changes, Internet, Knock Offs, Large Format Graphics, Manufacturer MSRP, Trade Show Displays

The Race To The Bottom In Portable Exhibits

An industry insider view on how the Internet has changed the portable display industry in the last 16 years and where it will go.

Race to the bottom
The race to the bottom

Around the time that the dot com bubble burst in 2000 there were some fantastic ideas of what the Internet could become. Unfortunately, at the time, the ideas were more developed than the technology available or the users of the Internet. Sure, many companies were mismanaged and wasteful, but there was a large number of ideas that just couldn’t move forward due to the limits at the time.

Today we see the Internet as something we just can’t live without (though I often try at least one day a week to do so) and can’t even begin to imagine where it will be in a year or more. The technology is advancing so quickly that even the most tech savvy of us have a hard time keeping up and keeping track. But one thing we can all see clearly is that the Internet has changed product access and pricing forever. And it has also changed the sizes of companies as they merge into larger corporations to create a monopoly effect.

In 2001 I joined a small company that sells trade show displays. They had been online since 1996 and were doing a few things that were not very common at the time. Specifically, the company was listing the prices of each product online. In the trade show industry this was considered taboo by many. Displays are expensive items that come with all sorts of hidden costs and therefore, the other companies in the country that saw this site with pricing were livid about it. I heard many complaints through the grapevine about it during visits to Exhibitor each year. Yet here we are 16 years later and most standard portable display items (aside from custom jobs) now come with full listed prices and options. Funny how that changed. It didn’t take more than a few years for everyone to see what the Internet was doing. Where you used to have a Yellow Pages ad and a strong backbone of salespeople constantly reaching out to potential clients, you now could simply build something that could (done correctly) bring the clients to you.

In 2005 I was in a small business group for a corporate event in St. Louis that was invite only and most of the other people there were from much larger companies than I was. However, during one of the moments after hours where several of us were sitting around a bar table we began discussing how we generate leads and advertise and I happened to mention that, aside from a few local outreach plans, we didn’t do anything. What we did was simply create a web site that brought the clients to us, saving us countless marketing dollars. The others in the group were stunned. Several doubted me. But the message was clear; the Internet had become our lead generator years before anyone else in our industry thought it could be. What I regret now is even mentioning that to the others because, of course, they began doing the same thing. Me and my big mouth.

Anyway, back to that race I mentioned in the headline. As the Internet expanded you began to see a drop in prices on everything. A television that used to cost you $8000 was now being sold elsewhere for only $3000. Though we at first were skeptical of the deal and wondered what the catch was, we eventually, as Internet users, just made the purchase and found that it usually worked out. But how in the world was it possible?

China is one big answer. But that China topic will be another post very soon (keep an eye out for that as it certainly plays a big part). The other answer, for the trade show industry at least, was the ease that a person could create a web site as time passed and how simple it was to get results from it.

Soon there were countless sites popping up all over the country with full listings of prices and options. However, what was soon discovered was that these new sites were selling product much lower than normal. MSRP prices were completely ignored and you would often find items sold 30% to 60% less than you had seen only a few years before. One of the main reasons this occurred was that manufacturers/suppliers in the trade show industry didn’t really care who was selling the product and where they were selling from. IE: you no longer had to be a brick and mortar company with employees to become a distributor. Manufacturers/suppliers began allowing people to set up shop in their homes, presenting themselves as large businesses, but often having one or two employees maximum. The Internet can make any business look large, legitimate and professional. And as we know, most consumers just don’t do their homework, or even care. Especially when it is an item they know little about but have a budget to stick to.

Another reason this happened was that manufacturers/suppliers in the trade show industry, though they normally had strict rules about selling to clients, stopped the rules of you having to be specifically a trade show supplier. That is because these manufacturers/suppliers (not all mind you) branched out into other products that could qualify as signs or other. Before long you found you could get the same large trade show display from a basic franchise sign company instead of a professional trade show display supplier.

Today you can access many of the industry standard inlines and island exhibits from a small fast sign type place as you can from the experienced sellers that understand the industry fully. Price wise that is a good thing if you are trying to save money. But is it a good thing?

Buying an exhibit to promote yourself at a trade show is a big investment and certainly you want to save money. If you are well versed in how displays work, have kept up on the new hardware, and feel that you know everything necessary to purchase anywhere, this article isn’t for you. Nothing will convince you otherwise, nor should it. But if you are not entirely sure what you need, have something specific in mind that isn’t listed anywhere, and you want assistance beyond the purchase (future upgrades, suggestions that are uncommon, products beyond the normal reach, new graphics, color matching, continuity of hardware, products that are not going to break, products that won’t be discontinued, endless customer service….) you should be buying from a company that actually exists beyond a home office or at the same place you go to get color copies or a yard sale sign.

Underwear Bandits is a term I coined back when this all began. Essentially it describes a guy in his basement selling you a product that you think is coming from a reputable company but is just coming from one person in his home passing on your purchase to the next point through his web site. You can’t send in a return to that company because they don’t accept returns. You can’t send in an item for review or repair because it is a basement. That seller is bound by the terms of the company “they” bought your display from and sold to you. And that company will never go beyond the call of duty to provide you with service, regardless of the issue.

You should be researching the company you purchase from. It’s so easy to do research online these days it is embarrassing. For one, if the company doesn’t list a physical address on their web site, but you want to order from them, call and ask their physical location. If they refuse, don’t do business. If they provide it, put that address into Google Maps and confirm visually using Street View that the business is indeed there, has a building and a sign, and then look at it from Satellite View to confirm the size of the building. Second, go to any WhoIs site online and research their domain name. You should be able to view the same address as part of the ownership as well as contact information and a date that domain was create. That will give you an idea of who you are working with and how long they have been in business. The domain search may not apply to some companies if they are part of a national sign shop chain though. And, if the information from the search is listed as private you should wonder why.

You should also be asking about returns/reviews on every single item should you not be satisfied or there is damage. Know the costs up front. If there isn’t a physical location for the business you are working with, you will be sending the item back to the manufacturer. In cases such as this, you can find out a lot about who made what you purchased and other locations you can buy it from. Unfortunately, some sellers change the brand names of the product to hide that fact. Most manufacturers/suppliers in the trade show industry have not set guidelines as to how you sell a product and for what cost. So it is buyer beware. Especially if the company you are buying from is within driving distance of you but you can’t visit them to view products in person or have a consultation.

Back to that race. By 2010 I saw many products being sold for only about 5 to 10 percent above actual wholesale cost. The basement Underwear Bandits were killing portable display profits in the industry because they had no overhead. The consumer was having a great time. But those in the industry that had years of experience selling and servicing these products were being put out of business simply by price alone. Usually by a guy that just had a few contacts in the industry, but enough to get wholesale access. Eventually something would go wrong with a discount purchase and the seller couldn’t service the client because they had no concept of the overall challenge of exhibiting. The buyer would have a bad experience and that would hurt the entire industry. Many companies folded. Larger companies that had available capital began trying to buy in bulk, or directly from China, to offset the situation. Though you then need large amounts of storage space to accommodate your material.

Today this is still happening. The stronger have survived either by expanding their offerings or by mortgaging their future on change. I’m not sure if more change is coming that will benefit those who have lasted. I suppose the industry is just a different picture of itself from back when we listed prices in 2001. The anger from that was a fortune tellers message to the future. Some adapt to change while some die. And those that became Underwear Bandits have a limited capacity to offer you solutions. All they provide are the basics that basic manufacturers/suppliers sell to them. Should you need an outlandish solution, something custom, or a rare European item, they have no idea how to service you. Refer to my “maintaining color across multiple items” article for an example. Will a 5 minute sales person who only cares about the money really take hours to work with you to ensure the color works everywhere?

What I see happening is more direct selling and more large corporate deals. Direct selling from manufacturers/suppliers used to be another taboo in the industry. Now, almost every single manufacturer/supplier has some form of direct sales outlet (even if they won’t admit it outright). Most sell through other sites, or even through their own but offer distributors a fee for location allowance because you are their rep in a region. The days of the industry buying from one source wholesale to then sell to an end user will quickly disappear as profits exceed past morals and values. And, as some manufacturers/suppliers grow it will only be a matter of time before they are purchased by larger online entities. For example, I could potentially see a company like Vistaprint purchasing a company like Orbus and just merging that into one of their print solutions online. Or, consider FedEx Kinko’s buying something similar, like Creative Banner, and doing the same thing. Perhaps Getty Images buys a manufacturer and merges that into the option of buying a stock image for all marketing purchases (use this image on your banner, exhibit, web site, business card, etc.). I proposed a similar idea based on Istockphoto back when they were independent only to be brushed off as silly. Eventually this is going to happen and the retail portable trade show display company will be either out of business, or just a reseller like an Amazon program where you sell products on your blog or web site as an afterthought for extra revenue. The large corporations will streamline everything, cut the bottom line to nothing, and simply sell for the minor profit of volume. I do see this happening eventually.

Do we care? Well, that depends on a few things. If you are in the industry, have years of experience to know exactly how to match a clients needs and budget to a particular display solution, then yes, you care. If you enjoy providing after purchase support for years to come with a client so you develop a relationship that becomes genuine, then yes, you care. If you truly live for the job of exhibits to create special results in trade show environments, then yes, you care. However, if you are just concerned with making money, or getting a deal, no you probably don’t care. And in today’s Internet environment, I will not blame you one bit. That is what we have become. Like a local burger joint in a small town folding because Burger King moved in next door, it is just another form of change.

There will always be a place for the expert in everything (I hope). But the days of living off that expertise may soon be coming to an end. You may have to work for a very large international corporation where you spend 5 minutes helping a client instead of 5 hours. That is of course if you can get that job out of the thousands who apply. There won’t be many positions available since the person will be expected to do the job of 10 people instead of one. But the stock will go up right?

You tell me…

Should portable display manufacturers/suppliers in the trade show industry finally set some rules as to who can and who can’t sell their products? Should there be efforts made to ensure that those selling the displays are experienced and qualified? Should businesses actually have a physical location to assist customers? Do we consider a trade show exhibit something more important than a business card purchase?

I currently know only a few companies that do some of that.

Where are we going? And, do we care? Alibaba is only a click away and it’s getting closer than that. Perhaps portables are just $8000 televisions now on sale for $300. When something becomes a system out of a box, even if it has custom variables, the buyer will only see the price because that is all we see online. Everything else looks the same online.

Some US manufacturers/suppliers are now trying to convince users that buying premium is the key so they can set themselves apart from the lower cost solutions (even as they sell direct for lower). But Internet users mostly don’t care or understand the value of that proposal. The issue of educating a buyer on the benefits of premium is as old as commerce itself. The percentages never change. And, the Underwear Bandits will sell premium units for only a 5 to 10 percent markup just like they would any other display.

The Internet has changed so many industries and the portable trade show business is on the cusp of a monumental shift. I keep asking myself why I just don’t become an Underwear Bandit myself while there is still time.

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