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Forgo the Trade Shows?

Some entrepreneurs who sell their products to big retailers have decided to forgo more generic trade shows.
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Trade shows have always been a great place for entrepreneurs to be discovered. And for good reason: there's nothing like the spectacle of a big tent for bringing buyers and sellers together . This year U.S. companies will fork over approximately $12 billion to trade-show producers.

But if you're waiting for the Wal-Marts of the world to discover you at an industry show, you could be waiting a very long time. These days the big-box chains are busy throwing their own shows. Mass retailers -- including Wal-Mart and Kmart -- now stage invitation-only affairs at which major deals are done.

As a result, some entrepreneurs who sell their products to the big boxes have decided to forgo more generic trade shows. Larry Gutkin, CEO of Ingear Corp., in Buffalo Grove, Ill., is one of them. As his company -- which makes luggage, sports bags, and backpacks -- grew from sales of $1.3 million in 1994 to $61 million in 1999, he found he no longer needed the old trade shows where he'd exhibited for years. The shows became irrelevant, "an expensive pageant," he says. Two years ago Gutkin made the bold move of dropping most major venues such as the sporting-goods industry's Super Show. "These days we go direct to the buyers," he says.

"Closed corporate shows" are on the rise, according to Michael Hughes, director of research services at Tradeshow Week. But few are as exclusive as the kind put on by competitors Wal-Mart and Kmart. At these private shows -- called "style-outs" -- the mass retailer controls the exhibitor list. If you're not a current supplier, you may have a very hard time snagging an invite.

Hughes maintains that shows controlled by buyers "are unique to the mass-retailer industry." In most industries, he adds, "the buy side doesn't have nearly that much power."

The cost of exhibiting can be exorbitant. Gutkin recalls a Kmart style-out he attended last year in Hong Kong. After traveling 17 hours across the world, he arrived at the Shangri-La hotel only to discover that the meeting rooms were all taken. He was forced to rent out the swank presidential suite at a rate of $2,400 a night. He stayed two nights. The hotel staff lugged the Louis IV furniture out of the suite to make room for his two truckloads of luggage products. In the great room usually reserved for visiting dignitaries, Gutkin apparently made a royal impression. He says he walked away with a "multimillion-dollar" order for the year and increased his sales to Kmart by 35%. And, oh, the view of Victoria Bay was spectacular, too.


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