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Later this week, the Hong Kong International Diamond, Gem and Pearl Show will open in Hong Kong, signaling the start of another year heavily populated by trade fairs. In a month, Baselworld will take place. In four weeks between the close of the show in Hong Kong and the opening of the show in Basel, no less than four important, yet more regional, trade fairs will take place.
The two major trade fairs are part of a long list of important international trade events that diamond traders, diamond wholesalers, diamond manufacturers, jewelry makers, as well as diamond and jewelry buyers from around the globe flock to in near unison. Most participants, exhibitors and buyers alike, know each other. It is not unusual to see people at these events cheerfully great each other, happy to meet again. After all, they just met a few weeks earlier at another tradeshow, and the one before it, and the many that took place before that. And they will all meet again in the next one too.
So far this year, there have already been 24 trade events of this kind, including Inhorgenta that took place this past weekend in Munich. Another ten events are scheduled to take place in March. That brings the number of trade fairs in the first quarter of the year to 34. Some of these shows are large key annual events attended by many hundreds of companies and thousands of people from the midstream of the diamond pipeline, such as the two shows running in Hong Kong next week or the Baselworld show to be held in the last week of March. Many of the shows are small gatherings. They take place in Kuala Lumpur, Vicenza, Scottsdale, Miami, New York, Tokyo, Paris, Tuscany, Istanbul, Chennai, and even Ramat Gan.
The social aspect of the trade fairs is fine. We all want to meet friends and colleagues, exchange ideas, learn what is going on. It is an important part of doing business. Yet, meeting so frequently instead of doing business is not a way to advance a company’s operations. In fact, it can be argued that trade shows may even harm business. Attending so many trade shows all around the globe may give the false impression that this is a booming business that requires a bevy of meetings, get-togethers, cocktail events, and other activities just for the sake of an efficient exchange of goods and information. This is not the efficient way to generate sales.
Adding trade shows to a company’s marketing effort requires serious planning. Doing it right means defining very specific goals, arranging meetings, and deciding on the goods to buy or sell as well as how much we are willing to pay for goods and at what price we want to sell. A strategy needs to be determined. Are sales made to block competition? Simply to ensure costs of attending the show are covered? Or do we want to test the market? To what extent?
Exhibitors also need to decide on what space to reserve and how to plan and design the booth. Apply the lessons learned from previous shows. Did we stand out? Have we attracted the right crowd? Do we want to attract a somewhat different set of customers to expand business? How is that done while keeping past customers? Did we keep a list of the companies that visited our booth last year, but did not purchase anything – for the sake of trying to turn them into customers?
Part of the answer to these questions is that preparations for attending a show should include knowing what goods will attract the sought-after customers.
Making the effort to attend a show also means considering the time out of the office, including the missed sales opportunities that being out of the office entails. Which raises another question: is it worthwhile? Attending trade fairs, especially as an exhibitor, is costly, and can run into $100,000. To cover the cost, revenues should cover the cost of goods, the cost of attending the fair plus any other sales-related expenses. Considering that in addition to the regular expenses and the loss of business back in the office while we are away, we need to add the trade fair-related expenses, meaning that we need to make a lot more sales than usual to make it worthwhile. How often does that happen? How does one poor trade fair impact the rest of our trade fair revenue?
A trade fair is a very competitive environment, especially for diamond wholesalers that are basically all selling the same item with very little differentiation. A buyer at a trade fair can hop from booth to booth, do a quick comparison and find whose offer makes the most sense price wise. Considering that this is an expensive setting and that margins are thin, do we really want to put ourselves in a price war of this kind?
To justify the effort involved in generating these sales, they must exceed what could have been sold out of the office, without going to the show. Ideally, a company should attract new customers too. These new customers should generate future sales that make the trip worthwhile.
Once the show ends, the results should be reviewed and examined in light of the goals set prior to the show.
Taking all this into consideration, is this the right approach for selling diamonds? Are there other venues that could serve us better? For example, create stronger ties with customers downstream away from the ruthless competition of a trade show?
Clearly, attending a trade show as a buyer seems to work much better than as a seller. The plethora of trade shows do not add opportunities to sellers as much as adding opportunities for buyers. After all, if a buyer does not find the goods at the right price at one show, another is just a week away.
The views expressed here are solely those of the author in his private capacity. No one should act upon any opinion or information in this website without consulting a Professional qualified adviser.