Tilting at Windmills – The Social Media Monster

by M of the FrenzyGals

I admit it. I am NOT a savvy Social Media user. I only joined Facebook a few years ago (basically when we started the business), and I was never on MySpace. I really don’t “get” Twitter. In fact, I kind of totally hate it, but I try. Blogging is new to me and I have a lot to learn. Then you throw in Tumblr (I REALLY don’t get THAT), Pinterest, Digg, StumbleUpon, and Google+ and I am WAAAYY out of my element.

This makes things difficult, and somewhat ironic, considering I run a web-based e-retail business. Trying to keep up with the constant changes to the Terms of Use and functionalities of all these “tools” as well as trying to find that balance between staying engaging and not crossing the line to overbearing, is a full time job. In fact, I know of several companies who have at least one individual, if not a team of them, whose entire job is to manage the Social Media Presence of said company!

So, with all that AND the job of actually RUNNING a business (i.e. filing the proper licensing and tax forms when necessary, processing orders, finding or making new merchandise, responding to information requests, developing marketing strategies, and working on website malfunctions) how does a girl get a grip on reality?

The truth is, I don’t. Not really. Despite the setbacks and the frustrations and the “what the hell is this new thing I have to learn and master to survive and compete in the new global marketplace” I still manage to find that well of optimism that washes me with a belief that I actually CAN do it all.

It helps to have a business partner that is also my sister and one of my best friends so I know her inside and out. We fight fair(ish) and can work together even when we don’t like each other very much. She is amazing (yes, K, I’m talking about you!) and I am very lucky to have her.

But even with the optimism, the support system, and that annoying little voice inside my head that pushes me to do better and learn more, it is a daunting task. So I ask you

How do you form a strategy for dealing with a Monster you don’t understand, that is constantly evolving and changing the rules, and is always growing new heads?

I don’t know the answer to that question. I am still on the steep side of the learning curve. I read articles and books and blogs that promise to give you insider tips and the “Top 10 Ways to Use Social Media for Your Business,” but I always come up empty-handed, or, rather, with hands full of even more questions.

I don’t want to spend my days worrying about how many people “LIKE” my business page, or re-share my photos, or @ me on Twitter. I want to spend the bulk of my time creating and presenting inventive and quality work to the marketplace. And, yes, I would like to get a decent amount of sleep on a fairly regular basis.

But the nagging questions remains, how does a micro-business (we are even smaller than small) compete in the world of web business without these tools? How do you remind people you are a business and translate that knowledge into sales? How do you balance the 27 different hats you wear as an entrepreneur on your head, all at the same time, without dropping any?

Maybe we have to drop a few hats every now and again. Maybe we have to go radio silent to think about what we actually want to say. Maybe we have to say, “fuck the stats” and just do what makes us happy and share what brings us joy without the worry of how many people will LIKE or SHARE it.

Staying the course. It is a nice little buzzphrase, but really hard to put into practice. We do our best, and that is all we can do. For us, here in the Frenzy Universe, the thing about social media, is the social part. We like the interaction, the commentary, the discussion. And so, our strategy, if you can call it that, is to put it out there, honestly and openly.

We aren’t experts, we are simply us. We will scrawl our message on the side of the monster with whatever art supplies we have on hand. It may get washed away by the rain, or graffitied over by others, become irrelevant, or be challenged, scrutinized, and deemed invalid by the powers that be.

We may be hard to hear over the din or hard to read in the dim shadows and awkward corners. But we will be here, optimistically sharing our little corner of this world and inviting you all to cross the Portal of the Possible and step into the Frenzy Universe, where the Impossible happens every day. Even a luddite like me navigating the waters where the Social Media Monster lurks beneath the waves.

We’ve recently been asked why we have cut back on the number of conventions we have been doing this year. We thought we would explain our decision through a lesson in Vendor Economics. We do an extensive Cost/Benefit analysis when making such decisions. What follows is a basic example of what it costs us to vend at a convention and break even on our expenses. This includes getting paid for our time, which is the only way we actually make a living since this is our full time job. (Most of the time that last part doesn’t actually happen and any “extra” funds get reinvested in the business.)

Below is a Glossary of Terms and explanation of the numbers we will be using in the calculations later in this article:

Booth Fee – Prices for booth space vary from con to con. Looking back over the 10 conventions we did last year, the average price for a booth was about $200.

Hotel Stay – Most convention hotels average around $100/night. For a three day con vendors usually show up a day early for set up. So, that is 3 nights, at least. If you have to drive more than a few hours you may need to stay over an extra night after tearing down and loading up. For this purpose we will assume a 3 night stay. $300

Gasoline – The closest Steampunk con is 3 hours away for us (approximately 150 miles). We have driven farther, but, honestly, it just wasn’t worth it. We have to drive a van to haul our merchandise and booth display. At 15 miles per gallon for 150 miles that is 10 gallons of gas each direction at $3.50/gallon. (150/15=10, 10x2x3.5=70) $70

Driving Time – again, this varies, obviously with your home location and the location of the show. Let’s use the 3 hours drive from the gasoline example for consistency. That is a 6 hour round trip for two people in the car. If we were to get paid a driver’s wage for that, we would make approximately $13.50/hr (based on national averages for delivery drivers). (13.50x6x2=162) $162

Merchandise – the cost of merchandise varies widely as well, but for argument’s sake we will take a conservative estimate and say that merchandise is marked up 100%. Example: you buy an item for $5, and sell it for a $10. If you are surprised at this, we apologize that you are unaware of how commerce and retail works. The discussion of mark-up rates and pricing is the topic of another conversation and we will not get into that here. But, using that example, you must take 50% of your gross revenue to just cover merchandise costs. EXAMPLE: if you make $2000, $1000 of that is up-front capital you have already invested in the sale and is sunk costs you need to recover. 50% of Revenue

Hourly Rate for Work – We arrive on Thursday (after 3 hours of driving) to set up the booth. It takes us about 3 hours to set up including hauling everything in around all the other vendors and getting checked in with the organizers, finding our booth, unpacking, etc. Vendor hall hours vary greatly and are usually at least 8-10 hrs a day. Sunday’s are often shorter and only about 6-8 hours. Let’s assume Friday is an 8-hour day, Saturday is a 10-hour day, and Sunday is a 6-hour day. That is 24 hours of “OPEN” time. (8+10+6=24) Vendors are usually asked to be in the hall an hour prior to opening – add 3 hours; tear down is usually faster – about 2 hours. We are now at 32 hours for the weekend AT the con PER PERSON. (3 hrs set up + 24 hours work + 3 hours open prep + 2 hours tear down.) If we pay ourselves a minimum wage that is $7.25/hr for each person for 32 hours. (7.25x32x2= 480) $480

Meals – Living on the road you can eat pretty cheap. We did a show where we bought a jar of peanut butter and a loaf of bread and ate for several of the travel days on about $6.75. However, most people eat out while working, if they get to eat at all. If we assume breakfast is included with the hotel stay (which is actually not as common as you might think) then we have lunch and dinner to cover. Corporate per diem rates vary by location, but for our zip code in Ohio the per diem rate for meals and incidentals is $51 (http://www.gsa.gov/portal/category/21287). We will lower that to $30 since we are cutting out breakfast. $30 per person for 2 people for 4 days (1 travel day + 3 con days) is $240. Seems pretty high to us, but even at $20/day it is still $160. Without access to a fridge or kitchen it is difficult to keep the prices much lower. $160

Credit Card Fees – Credit Card Fees vary based on the type of card used, transaction fees, and your card processor. For this example we will use The Square base rate of 2.75%. You have to take 2.75% off the top of whatever you make to cover the fees. 2.75% of gross revenue*

Sales Tax – We will use an average of 7% for this calculation. We have vended in places where it was as much as 10% and as low as zero on certain items (e.g. clothing in NJ is not taxed, but everything else is). 7% of gross revenue**

Licenses – Getting a business and/or tax license in a foreign location (not your home county/state) can be free or cost upwards of $150. You might not think this should count in the calculations, but it is a cost for doing business in the location and does have an impact on your bottom line. Average $50 ***

Here are the numbers we are working with:

Booth Fee   $200

Hotel Stay   $300

Gasoline    $70

Driving Time   $162

Merchandise   50% of total revenue

Meals   $160

Hourly Rate   $480

Licenses   $50

Sales Tax   7% of revenue

Credit Card Fees  2.75% of revenue

59.75% of revenue + $1422 = what you need to make just to break even on your investment.

100%-59.75%=40.25%. $1442 is 40.25% of what you need to make.

1442/.4025=gross revenue needed = $3582.61

Most Steampunk conventions we’ve attended seem to be thrilled reporting attendance numbers of 500-1000 attendees. The question about these numbers is: Does that include all badges (performers, staff, and vendors as well as paid attendees) or just the off-the-street attendees? For argument’s sake we will give them the benefit of the doubt and say it is unique attendees. (Some large cons claim 15,000 in attendance, but use each day’s individual numbers and add them all together so people get counted every day they attend. Thus, one person attending all three days gets counted three times. In effect making their attendance number only 5000 in reality.)

If there are 1000 attendees, to make back your investment and break even (not having any profit), each attendee would need to spend $3.58 in your booth alone. (3582.61/1000=3.58261) It is highly unlikely to have every attendee spend money in your booth. But that’s okay, because most sales are an average of $17 (based on our personal calculations), so not every one needs to spend money with you, you just need the people who do spend with you to spend more than $3.58.

If there are 20 separate vendors (which these days is a conservative number) and we assume each vendor has similar monetary break-even needs, then the vendor hall needs to gross, on average, $71,652 for everyone to make their costs back. Thus, with 1000 attendees, each attendee needs to spend $71.65 in the vendor hall. Again, this doesn’t seem unreasonable, but remember this is just a BREAK-EVEN analysis. This isn’t anyone making a profit, funding their up-front costs for next year (or the next con), or making more than minimum wage. And, let’s be honest, who wants to start their own business and only ever make minimum wage? It also doesn’t give them any capital to invest into their business for new merchandise, tools, supplies, workforce, etc.

A few extra costs of doing business that we did not include in this analysis but bear mentioning include: Marketing (business cards, posters, flyers, etc.); Change (most banks are not open during convention hours and you need to prepared to break the $20s people get from the ATM on their way to the con); Parking (some hotels can charge upwards of $28/day for large vehicle parking); Travel Expenses (costs increase exponentially if you need to travel longer than a few hours); Damaged/Stolen Merchandise (yes, it happens, probably more than people want to admit); Time Away from Your Business (time not spent making new merchandise, managing web sales, answering phones, etc.); and Incidental Costs (booth display, zip ties – we go through A LOT of those – shopping bags, internet access for credit card processing, vehicle maintenance, chiropractor visits, attorney fees, insurance).

We understand that each vendor is unique in their goals, business objectives, reasons for vending at conventions, etc. The numbers above are generic averages pulled from our experience. They are also based on the most conservative situation of travel we have in our experience. We have vended at shows in Washington, Colorado, Arizona, Texas, Georgia, Indiana, Ohio, Detroit, and Oklahoma, so we are no strangers to excessive travel for our business. We also run our business as the primary source of income for two people, therefore we think more in cost/benefit terms than many people we encounter who have other sources of income to pay for their hobby businesses.

When vendor hall organizers come up to us at the end of a show and ask us how we did, we often say, “Well, we had a good time, but we have to do the final numbers to see.” That is not a way to avoid the question or avoid potential judgement of our opinions on the show at hand. It is simply the facts.

If you have other ways of determining if a show is successful for you and your business or you would like clarification on any of the information provided above, we invite you to comment and/or ask questions. We welcome open discussion of this topic and believe everyone can benefit from honest communication and sharing of information.

 

* We are aware that many transactions are on a cash basis, but because of the varying rates charged by credit card processing companies the 2.75% is a conservative estimate and it is simpler math to take it off the top of all $ made, instead of trying to guess what percentage of sales are credit vs. cash for this example. DISCLAIMER: we do not use The Square, we are not affiliated with The Square or the company that makes it, we have a credit card processing account with a company that covers our website AND onsite sales at conventions. We are simply using it as an example that is familiar to many vendors.

** Many people don’t collect, file, and/or pay their sales tax, but it is the law and we consider it a cost of doing business. While it is a break-even cost usually (i.e. what you take in is what you pay out), it is an expense that comes out of your total intake at the end of a convention and therefore you cannot look at your gross revenue without taking it into consideration.

*** While we are aware that many vendors do not apply for business and/or tax licenses in the locations where conventions occur, many of the planning organizations put it in their contract that you are responsible to do so and we take that seriously.

 

What follows below is our humble opinion. While being respectful of the hard work and dedication of convention organizers, volunteers, guests, performers, and attendees, we just needed to have our say!

Much has been said recently about the challenges of being a con planner/organizer and being a con guest/performer. We thought we’d take this opportunity to add a third perspective – that of con vendor.

We acknowledge the difficulties faced by both planners and headliners of steampunk cons. On one hand, con planners are trying to fund and organize a weekend-long fun and informative experience involving diverse groups and individuals. On the other hand, guests and entertainers’ livelihoods depend on promoting themselves and getting paid or being treated to certain perks. However, we feel that none of the recent posts on this topic has indicated an awareness of or has acknowledged the vital roles vendors play in the success (or at least the occurrence) of conventions and the challenges faced by vendors.

When sourcing funds to secure both a location and entertainers to draw attendees, vendor fees play an important role in providing the funds that get a con off the ground. Most cons, even first-year cons, charge between $100 and $500 for a single table/booth space. Vendors pay this price up front, commonly before any details of location, entertainment, and attendance are available. This speculative investment makes vendors a solid part of the financial foundation of a convention.

Vendors also play a vital role in confirming hotel accommodations and establishing convention room rates. Vendors reserve rooms early and commonly reserve extra nights before and after the convention, which is an important step in convincing hotels that the convention can provide the room-nights that make it worthwhile for the hotel to reserve the block of rooms at a lower convention rate and allow the convention to take over essentially the entire hotel.

Vendors themselves are often a draw to the convention, attendees visit the vendor hall to see their favorite makers/sellers, to see what’s being made and sold, to get inspiration, to buy hard-to-find costume pieces, and to keep up on new developments in literature, gaming, technology, art, costume, and film. The vendor hall is the epicenter for this type of activity and information.

The problem is, once vendors have been contracted, vendor hall operations commonly take a back seat to other convention organization. Here’s a summary of potential pitfalls for convention vendor coordinators (in no particular order):

• Careful vendor selection and balance must be maintained, so that you don’t have a room full of vendors selling similar wares. (And while we understand, for the above-mentioned reasons and for increasing attendees – shopping options, trying to book as many vendors as possible, planners really should consider the vendor-to-attendee ratio to ensure that vendors feel that the competition is reasonable.)
• Often vendors arrive at a con having very little information about vendor hall layout, set-up/load-in, and tear-down/load-out procedures. This causes a lot of stress on vendors and can set the tone for the weekend.
• Vendor hall hours are long and may fluctuate. Please consider how long your vendors will be cooped up in the hall, and make sure the hall hours are reasonable and solidly established before the day of the con.
• Communication between vendor hall coordinators and vendors is frequently spotty. When one vendor asks a question, assume that other vendors want to know the answer. Set up a forum or other easily accessible way for vendors to get and share up-to-date information.
• Most vendor halls have poor lighting and climate control, and sometimes security is sketchy as well. (Several conventions we attended last year did not even have locking vendor hall doors!)
• Vendors aren’t always aware of who is con staff/volunteers and who is an attendee. Make sure the contacts and lines of communication are clear so that issues in the vendor hall can be handled in a way that is least disruptive to the vendors and to attendees.

Worst of all, vendors have to MISS the convention. That’s right, vendors pay the most to be there and get to experience the con the least. We stand on our feet for hours, watching the con walk by, but we don’t get to engage in the panels, workshops, entertainment, or leisure like everyone else. In exchange for this, we have the opportunity to present our wares for your perusal and the potential to make a little bit of our initial investment back as sales. All we ask in return is a little respect. Even if you never say, “Hey, man, thanks for being a fundamental part of my con experience,”please visit the vendor hall, interact with us, and leave us feeling like underwriting the next con is totally worthwhile.

Thanks!

the frenzygals

When we discovered Coilhouse Magazine a few months ago, we were over the moon! What a great mag! Gorgeous artwork and photography combined with interesting and relevant stories make this periodical a must-have. So, when we chose to place an advertisement in their upcoming issue, imagine how nervous we were! It was very important to us that we honor the aesthetic of the magazine as well as properly promote our brand. So, with the fantastic design work of Main Vine Studio‘s Robin Norris, and a little help from Nadya and Courtney at Coilhouse, we arrived at what we think is a beautiful solution. AND, there’s a coupon code for goodies ordered from www.frenzyuniverse.com!

Now, Issue 5 of Coilhouse Magazine is on newsstands across the country. Word on the street is that the website is nearly (if not completely) sold out, but you may still be able to score a copy in person! Check out your local independent bookstore, or swing over to Barnes&Noble or Borders, to see if they’ve got this magazine in stock! In addition to getting to see our ad, you’ll find stories about Tiffa Novoa, Chet Zar, Clive Barker, Wil Wheaton, Ali Mahdavi, and many more!

We were lucky enough to meet Wil Wheaton at GenCon and have him sign our copy of the magazine!