The Business of Show Business
Part II: Doing Good Business
In Part I, I shared some
of my ideas about what dealers can do to make their shows as successful
as possible. In Part II I turn my thoughts to the promoters, and to the
more general problem of what a show has to deliver in order for me to
judge it Good; not just OK, but Good.
How has the Promoter Spent my Booth Rent?
Obviously, most of my booth rent goes to pay the
rent of the facility. But some is discretionary, and that’s what
I like shows where there is a big bulletin board
of local publicity in the dealers’ room (I like a dealers’
room, too). On it dealers can read clippings of ads in local papers, news
reports and stories about the show, accounts of ads on local radio stations,
numbers of flyers printed and distributed locally, and so on. We all read
the trades and see the show ads in them, but we don’t see the local
press, and that is what the retail customers read. The local publicity
should include posters in shops, a banner or two, good highway signs,
and fliers in the motel where I’m staying. If we dealers don’t
see local publicity for ourselves, we will always grumble about how bad
I also like shows where the promoter has spent imagination
and effort, as well as money, to make the facility as consumer-friendly
as possible. Publicity gets customers through the gate, but once there,
they must be tempted to linger. The longer a customer stays on the floor,
the better my chances of turning him or her from a looker into a buyer.
I look for good food, and a comfortable place for
customers to sit, eat and talk. I look for customer rest areas dotted
around the hall. Show-going is hard on the feet, particularly older feet,
and I don’t want him saying to her that he’ll wait in the
car because that’s the only place he can sit in comfort. If the
non-buying spouse is uncomfortable, his or her antsiness will put pressure
on the buyer in the family and will decrease our chances of making a sale.
Once a customer leaves the show to get something to eat, or to sit and
discuss the purchase, the sale is more than half lost.
I like shows where the ambience enhances the value
of the antiques I have brought. Are there flowers greeting the customers
in the entrance? Are the ugliest bits of the facility hidden by drapes?
Are there clear signs that the promoter has made an effort to make a cold,
impersonal facility warm, homey and friendly. Has he or she managed to
make the venue look the sort of place where good things are sold, does
it look classy and not cheap? Customers have to be in the right mood to
buy, they have to feel at home, comfortable and welcomed. Ambience is
intangible, but it matters, and I like to see some of my booth rent being
spent on it.
Even if I’m not having a good show, I need
to see that the promoter has brought my sort of customers through the
gate. I can tell this if other dealers are selling stuff comparable to
mine, even if I’m not. I can tell this by the sort of conversations
I have with customers, even though they don’t want anything that
I happen to have brought this year. Anyone can have a bad show at a good
show, and we should not let that distort our judgment of the show itself.
I like to see a promoter who knows the truth in the
old farming adage: the best fertilizer is the sole of the farmer’s
boot. Is the promoter or benefit committee in constant evidence throughout
the show? Are they walking up and down the aisles, talking to dealers
and customers, trying to find out what’s working well and what isn’t?
Are they willing to listen to dealers, even if we’re complaining
(as every now and again one of us will)?
I also like shows that offer good buying, both on
the floor, and in the locality. The old saying that you can always buy
your way out of a bad show is actually true. Obviously I don’t expect
the promoter to provide me with good buying, but I will continue to do
a marginal show if I can buy well there.
The Business of Show Business
All these factors help me sell well. But when all’s
said and done, we have to get down to the business of the business, and
that means getting down to the numbers.
To my mind, the most important basic number is the
gate:dealer (or G:D) ratio. This is the one issue where the interests
of promoters and dealers diverge most sharply, and it’s therefore
controversial and rarely discussed. Last time I raised it in this magazine
I caught flak from promoters and gratitude from dealers. I learnt from
the controversy, and have refined my views a little. So here they are.
The more expensive your antiques, the higher the
G:D ratio you need. For middle-of-the-market merchandise, I believe you
need a G:D ratio of at least 25:1, preferably 30:1 (that means 30 people
through the gate for every dealer on the floor.) For the pricier stuff,
you need 50:1. Anything below those ratios and you have slim chances of
achieving a gross that is ten times your booth rent, and that remains
my base criterion for a good show: it also is one that some promoters
have told me is unreasonable. Now, I can live on seven or eight times
booth rent, but I don’t have a good show till I reach the magic
My definition of a good show, then, is one where
at least one half of the dealers do 10 x booth, and the majority of the
rest do seven or eight. This is only possible with a good G:D ratio. There
are only two ways to improve the G:D ratio – increase the gate or
reduce the number of dealers. Promoters have every incentive for the former,
but none for the latter, for their income comes from both parts of the
ratio. The fact that dealer’s income comes from sales only, and
the promoter’s from gate and booth rents is the root cause of the
divergence of interests of the two parties: promoters want more and larger
shows (more gate money and booth rents); dealers want fewer and smaller
(better G:D ratios, better sales). Certainly, the best promoters will
try hard to keep their dealers happy, but their efforts are all too often
concentrated on the factors in the first half of this article: rarely
does a promoter cap, let alone reduce, the number of dealers. Some do,
I’ve worked with two of them in the past year, but they are the
If we want a smaller show where the pie is sliced
less thinly, we dealers must be prepared for higher booth rents. We then
have to make the business decision of whether the increased booth rent
and higher G:D ratio are likely to produce an increase in sales that is
large enough to justify the increase in rent. Put it simply, will a 10%
reduction in the number of dealers and a $100 hike in booth rent produce
an extra $1,000 in sales? In most cases I believe that it will.
While booth rent is the largest single component
of operating expenses (expenses excluding cost of goods), it is still
only between 50% and 66% of them – let’s say 50% to keep the
math simple. A 10% increase in rent will therefore produce a 5% increase
in expenses. If that 5% buys a good chance of increasing sales by 10%,
it’s worth it. It’s worth it, whether it buys you a 10% reduction
of the G:D ratio, or a 10% increase in booth size. Booth rent is the only
expense that can correlate directly with sales, and it is therefore the
only one that is worth voluntarily increasing. If we include the cost
of goods in our expenses, booth rent becomes an even smaller proportion
of the whole – see the table below.
The G:D ratio should be calculated for a cluster
of shows as well as for a single one. These days it is common for a successful
show to attract others. If the core show attracts two tailgates, the resulting
cluster must attract three times as many customers as the core show alone.
If it doesn’t, the dealers will suffer, but the promoters won’t:
people will likely visit all three shows, so the promoters will get their
gate money, but won’t buy at all three. What customers spend on
gate money will increase: what they spend on antiques won’t.
A developing cluster will take time to enlarge its
customer base adequately, at least three years, and maybe five. So dealers
should watch carefully to see how that base is building and to figure
out if it’s growing fast enough by the third, or at most, the fourth
year. Antiques Week in New Hampshire and Brimfield are the two most successful
clusters, successful for dealers, promoters and public. The spring Nashville
may be another. Other developing clusters (Philadelphia, York etc.) are
still, in my opinion, too young to judge.
Calculating the Business
Figuring out if we’ve reached 10 x booth is
an easy calculation that we can do on the spot. It’s the first stage
of figuring out our overall margin, which is also easy – we just
add up our expenses and subtract them from our gross, right? Well, yes,
but only sort of. Not all expenses are clearly defined, and what to charge
them against is not always obvious.
Clearly, booth rent and cost of goods (i.e. what
we paid for what we sold) are the core of the expenses column. So, too,
is travel. 33 cents a mile is what we should figure because that builds
in the overheads of our van – charging gas money alone seriously
undercounts travel costs. Lodging is another obvious cost, but food is
less clear. Do we count all that we spend on food, or only the half that
the IRS allows us to deduct? In general, when in doubt, take the higher
expense figure – it’ll give you a more accurate picture in
the long run.
Should we charge a percentage, say 5%, of our general
overheads to each show? Probably not: overheads are part of the cost of
doing business that our annual margin must be large enough to cover. I
may be a bit inconsistent here in charging vehicle overheads, but not
general overheads to each show, but I think wear and tear on the van is
more directly attributable to each show. You may decide differently.
And none of us ever charge for our time. Oh well,
that’s our problem.
At the end of all this adding up and subtracting,
I need to see a net margin of 30% for a show to be good. This means that
what is left when I deduct my total expenses from my gross takings must
be 30% of the gross. If I gross $10,000, and my total expenses including
cost of goods are $6,600, then my net is 33% and I’ve had a good
If one third of my shows yield me net margins of
30%, then I have a good chance of ending the year with a net margin, or
profit, of between 15% and 20%, which is what I need if I’m to stay
in business. And there’s no way that a margin like that will support
the bad habits I’d love to acquire.
It’s hard to get a 30% net margin with a gross
of less then 10 x booth. Let’s do the math for a hypothetical show
in which the booth rent is $750, and our out-of-pocket expenses are the
same. This means that our operating expenses, excluding our cost of goods,
are $1,500. Let’s also assume that we sell with a 50% gross margin
– i.e. that we double (the margin is the percentage of selling price,
not of cost.) The following table tracks our net margins as the show moves
from a disaster, to good, to a barn-burner. You’ll see where my
satisfaction point is reached, where’s yours?
of Goods ($)
margin (in $)
margin (in %)
So at this show, where we’re selling everything
at double its cost (and how often does that happen?), we only get to a
margin that will sustain our business when our sales are ten times booth
rent. At four times booth rent ($3,000 gross) we have made nothing, every
cent of our gross has gone to someone else. At $5,000 gross (6.6 x booth)
we’re starting to creep into the range of the acceptable. But it’s
not till $7,500 gross (10 x booth) that we’re on track for a profitable
year. The sad thing is that few dealers actually achieve 30% net/10 x
booth, and there are few shows that offer them a reasonable chance of
doing so. I believe that this is because, in general, the G:D ratios of
our shows are too low – i.e. our shows are too big and too numerous.
But there is one other important reason: the changing nature of the industry.
Why Is It Hard to Make a Living at Shows?
If the amount spent annually on antiques (which nobody
knows) were divided by the number of antiques dealers (which nobody knows)
we’d end up with a dollar amount that is impossible to calculate.
But I’ll bet the farm that it would show us that an industry-wide
annual net margin of 20% is unachievable. No economist would call us a
The show business keeps going because the hobby dealers
(i.e. dealers whose antiques business is a profitable hobby, but not their
livelihood) now outnumber the full-timers who rely on the antiques trade
to put bread on the table and the kids through college. Hobby dealers,
by definition, can live with net show margins of less than 30%. If they’re
really having fun, and if they really love the antiques they’re
handling, they can be happy grossing as little as $4,000 out of a booth
that costs $750.
The dominating presence of hobby dealers distorts
the economics of the antiques business. They subsidize their businesses
from other income, so their businesses survive when, by the laws of economics,
they ought not to. Their presence means that the industry carries more
individual businesses than its total size can support.
Their presence makes shows viable that, in strict
economic terms, ought not to be. Their presence makes shows larger than,
in strict economic terms, their gates can justify. Their presence makes
it possible to put on more shows than, in strict economic terms, the industry
can support. They make show promotion more profitable than show dealing,
and they make it harder for full-time dealers to achieve the margins they
I assume that you will have deduced from my tone
of voice that my sympathy lies with the full-time dealers. But then, I’m
a sentimental old dinosaur.
The future of the business, I’m afraid, lies
with the hobby dealers. Let’s make no bones about it. And the best
of them are terrific: they have a passion for their merchandise, a deep
knowledge of it, and they’ve been impatiently waiting for their
real careers to get to the point where they can indulge their passion.
They are happy to spend the time searching out that
special object. They are happy to keep that special object for show after
show until the one special collector steps into their booth and buys it.
They are tipping the balance of the industry towards small, specialized
dealers, and I think that’s the way we have to go.
The antiques business used to be anchored by general-line
dealers who carried a range of antiques that appealed to a variety of
customers. They made their living this way, and they needed a broad customer
base to sustain themselves. They also needed to turn their inventory more
than twice per year. Around them, on the margins, were a few specialist
dealers with a narrow, but passionate, customer base and slower turnovers.
Today, the margins and the center are changing places.
We are becoming a business with more specialist, and fewer general, dealers.
In an age where niche-marketing has replaced mass-marketing, that is an
unavoidable, and laudable, response to market forces. But it means that
the hobby dealers are displacing the full-timers.
My heart bleeds for the long-time, full-time dealers,
many of whom are personal friends, who are struggling to keep going with
reduced margins, when those same margins are making hobby dealers as happy
as larks. The full-timers’ need for higher margins means that they
have to look for shows with higher G:D ratios. And G:D ratios are kept
low by the presence of hobby dealers. Their lower margins and narrower
customer bases enable them to thrive in shows with low ratios, and thus
to make those shows viable, even though they are bad for the full-timers.
Change always hurts. There’s a lot of pain
being cased by the changes we’re currently going through. And, let
me add, the changes and the pain are being felt by single-owner shops
as much as by show dealers. Economically viable margins are as hard if
not harder to achieve in shops as in shows. We are seeing more shop owners
moving onto the show circuit, and that’s probably a wise move, even
though it may seem like moving from a rock to a hard place – more
and more of the business is being done at shows rather than in shops.
Shows can bring a variety of specialist, or tightly-focused, dealers into
one place, and that’s what today’s buying public wants.
So, at the end of all this I reach a conclusion that
I wish I didn’t: the twenty-first century antiques dealer needs
a specialist niche – and a second income.