Trade Show Exhibit TO RENT OR TO BUY?

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1 Trade Show Exhibit TO RENT OR TO BUY? A Decision Maker s Guide Avoid Frustration, Spend Wisely, And Make An Informed Choice for Your Trade Show Booth Program Brought to you by: XIBITMAX 7458 Washington Avenue South Eden Prairie, MN

2 We see a lot of frustration at trade shows; that makes us frustrated. And that s how this ebook was born. Too often, we see companies make uninformed and costly investments in trade-show exhibit providers who provide incomplete proposals, misinformation, and booth packages that clearly do not fit. Results? Companies invest tens of thousands of dollars more than they should in a booth package that is just plain wrong. Ouch! So, what's our goal here? We re not trying to sell you anything, really. (We will point out where we can help you, though, and save you money!). Basically, we want to help you in the decision-making process for your next trade show, and share our experience so you spend wisely. We know the choice between exhibit rental and purchase is difficult. Certainly, there is a great deal to consider, such as graphic production, shipping, booth set-up and dismantle labor, material handling charges and other critical show costs. We have seen too many companies make the wrong decision rent or purchase mainly because they did not have all the information necessary to make an informed decision. We will share our experience in trade-show booth management so you can ask the right questions of providers and make informed choices. This will help eliminate the post-show surprise of additional billings and charges. And if this information makes you feel like XIBITMAX would be a good resource for you, fantastic, we d love to help! If all this does is enable you to plan better, save money and feel more comfortable with the decision you make, that will be reward enough for us! One note this document can t, and won t, have ALL the information to cover every contingency; that is just not possible in less than 10 pages. Also, we are leaving out the Hybrid exhibit category (a combination of rental and purchase) in this analysis this should be considered on an individual basis. Our information is based on more than 20 years of industry experience and our understanding of what works, what doesn t, and what things really cost. We believe our perspective can help. We hope you will feel the same after reading this. So, let s get started! 2

3 Trade Show Booths Rental Option Pros and Cons Many of our clients find the advantages of rental exhibits quite compelling. If your company attends just a few shows per year or one large show, you can benefit from the cost savings of a rental exhibit. No capital costs, no depreciation expense, no storage fees, and no repair costs are just a few of the benefits. In addition, this reuse of exhibit material is an ecologically sound choice in these green-friendly times. Here is a summary of the advantages to renting your next trade show exhibit. BOOTH RENTAL PROS: NO INITIAL CAPITAL EXPENSE With no trade show booth to buy, you avoid the administration and processing of a large capital expense. In addition, there are minimal or no storage charges for your exhibit, and maintenance and repair costs are low or zero. Do you want peace of mind? With a rental, you won t worry about your booth between shows. All in all, exhibit rental can mean significantly less mental investment and dollar cost compared to exhibit ownership. LOWER TOTAL COST With an exhibit rental, you can still get a custom-designed booth and the costs can be a lot less than purchasing all-new exhibit material. LESS HASSLE At most shows, representatives from your booth provider are on site to supervise the installation of the exhibit and assist you with last-minute needs. Because you don't own the booth, your responsibilities for its setup are dramatically reduced. IMPROVED IMAGE WITH MORE FREQUENT UPDATES Because your exhibit is rented for one or a small number of shows, you can afford exhibit updates without feeling you re stuck with a large investment in purchased material. AFFORD MORE A rental booth typically costs less per square foot, so you can afford a larger, more distinctive booth on the same budget. SAVE ON TIME & LABOR Labor for booth installation dismantle is usually included with booth rentals. Exhibit providers should be able to set-up booths quickly and efficiently to your specs. You can focus on preparing to make sales at the show. SAVE ON STORAGE Storing your own tradeshow booth material (often in several crates) will cost you time and money. Show-specific signs and displays will add to your storage costs. Exhibit rental eliminates this issue. SAVE ON MAINTAINENCE AND UPKEEP Since you don t own the booth, you don t need to worry about material maintenance. ABILITY TO DO MULTIPLE SHOWS AT ONCE IN DIFFERENT VENUES 3

4 If you decide to participate in multiple shows close on the calendar and across the country, renting is a smart option. You will not be limited by your own exhibit inventory, and you ll have greater show participation flexibility. BOOTH RENTAL CONS: GENERIC MATERIALS & DESIGN Your exhibit provider may have a limited supply of materials, meaning your rented exhibit won t have the design panache of a fully customized purchased exhibit. LONG TERM COST CAN BE HIGHER If you participate in several shows per year using the same exhibit configuration, renting is not the best choice. Considering material storage and booth repairs, it takes five shows for an exhibit rental to be more expensive than an exhibit purchase. MATERIAL AVAILABLITY ISSUES Rental pieces are not inventory you own, and there may be times when the inventory you wish to have is not available. It rarely happens, but it can and occasionally does. The best bet is to plan ahead and secure your rental exhibit in advance. CONDITION OF BOOTH MATERIAL Sometimes cabinets, doors, tables and other rental pieces can be scratched and will show wear and tear, even for a new design. The best exhibit houses will maintain their equipment and minimize these issues, but this is rental equipment, after all, and its condition will not be perfect. FIT AND FINISH MATERIALS Rental booth pieces are typically made from less expensive substrates and finishes. If you are looking for premium laminates, veneers and finishes for your rental booth, your choices may be limited. FURNITURE The cost of furniture rental from show-sites can be outrageously high. Plus, your selection will be limited to the very basics. We have found the cost of handling, maintaining and storing furniture is prohibitively high so we understand where the furniture rental companies come up with their pricing. There is definitely an advantage to owning your own furniture for trade show exhibits. Trade Show Booths The Purchase Option Pros and Cons If you display at five or more shows per year, booth purchase is the best option from a cost perspective. In addition, most exhibit houses can more efficiently manage the maintenance, shipping logistics and event management of your own booth property. The com prehensive service of a purchased exhibit compared to rental management can be reduced or eliminated. 4

5 BOOTH PURCHASE PROS: LONG TERM COST First and foremost, if you are an active exhibitor (more on what makes an active exhibitor later), you should own an exhibit. At a certain point, usually after five shows, renting a booth is simply more expensive. AVAILABILITY Your booth material is always available unless you have conflicting shows (which does happen, especially if you are an active exhibitor). FIT AND FINISH With your purchased booth, you can define the quality and fit/finish of the display. If you have a premium brand and want the look, feel and experience of materials that reflect your image, then purchasing a booth is the way to go. As mentioned, wear and tear and occasional damage occurs to booth elements. Your exhibit provider should proactively communicate estimated life-span and average post-show repair costs. CONTROL Simply put, if you want to have more control over your material, where it is, how it looks and where it goes, owning is the only option. Also, if you have the staff and resources to manage logistics, maintenance, and updates, plus installation and dismantle of the booth, this is the option to pursue. DESIGN Owning your exhibit means you can have the exact booth design you want. With ownership, you can customize every individual piece, making the booth a pure reflection of your brand and brand image. Rentals usually require some design concessions because you re constrained by vendor inventory. BOOTH PURCHASE CONS: COST RESPONSIBILITY As the owner, you bear the burden of any repairs, storage and depreciation that comes with ownership. Trade show booths can incur significant amounts of wear and tear when used, plus occasional irreparable element damage. The industry standard is to calculate three to five percent of the purchase price to account for damage after EACH use of the booth. Trying to get reimbursement for damage from insurance, shippers or show providers is problematic at best. Also, you will be responsible for storage charges, usually with the exhibit house that built your booth (we do recommend this practice, unless you have considerable storage availability and a proficient and dedicated staff on hand to handle repairs, maintenance and management of materials). LIMITED FLEXIBILITY A new acquisition, a new brand, or just a new logo can change everything regarding your exhibit. We ve seen whole exhibits go obsolete due to board-room decisions. Unless flexibility is implicitly part of the design, being able to drastically change your design is not possible with a custom-designed purchased exhibit. 5

6 HIGH INITIAL EXPENSE/CAPITAL EXPENSE The initial expense for the booth property averages around $150 per square foot. This cost is for production only, and does not include any transportation or show services costs. Typically, this expense is capitalized. Many companies simply don t want to incur such a capital cost, or they simply don t have the reserves to pay for the up-front costs of ownership. Pricing: Rental vs. Purchase What you will get, and what to look for in your next trade show booth proposal BOOTH RENTAL Pricing Summary We have experienced numerous instances where companies take what they think is the low bid, only to discover that costs such as shipping, material handling, and installation were not included in the proposal. In the end, these companies were responsible for costs considerably above and beyond the rental costs estimated and budgeted (sometimes double the original estimate!). If you are savvy, and know your way around ordering event services, you can go this route. We at XIBITMAX don t recommend this practice. In fact, we (and many other trade show companies) generally require that we manage all services with our rentals. It s our property, and management of all services surrounding it should fall on us. This avoids potential finger pointing and possible miscommunication down the line. In every request for proposal, you should require ALL INCLUSIVE or TURNKEY PRICING (details below). This will require the companies bidding to include all the costs and services involved with the booth implementation, show services management, delivery, set-up and removal from the show. This is important; companies may interpret or propose options to their own advantage, not yours. If a company does not provide pricing per your guidelines, their bid should be disqualified. Following is a summary of booth costs you should be aware of, and tips on what to look for in every rental proposal you receive: Booth Design, Engineering and Set Up Instructions: These are costs for your initial booth design, any subsequent revisions (IMPORTANT ask if this is included; in many cases revisions may be extra), booth engineering (drawings to build the booth), and set up instructions (drawings to instruct on-site crews to construct your exhibit). These costs typically range from 5-10% of your total project cost, depending on your provider. Also, graphic design usually is NOT included in these proposals. Typically, exhibit houses rely on their client s in-house resources or advertising agencies to design booth graphics. Some exhibit houses can do graphic design, be sure to ask about their capabilities. Booth Rental Costs: These costs are for the rental of the material in your booth, and should include carpet, structure, shelving and other critical pieces. In some cases, installation, dismantle and transportation is included (if not, they should be line itemed below). Also, this should include Pre-Show Test Fitting to ensure all materials work properly, are labeled for installation, and fit 6

7 perfectly. Off-site labor is less expensive, and pre-show test fitting improves on-site set-up efficiency, lowering installation expenses. Also, it minimizes the chances of delivering incomplete or incorrect materials, which can add a surprising amount of labor, material handling and shipping costs. Graphic Costs: These are costs to produce (not design) the graphics for you booth. See the note above regarding graphic design. Be aware that some providers charge file set-up fees for graphic set up and pre-production. Make sure to discuss this with your provider as well. Exhibit Prep/Pack/Load on to Truck: Packing and loading costs may be included in the Booth Rental costs, but be sure to ask. Exhibit Return/Re-warehouse/Check for Damage: These costs may be included in the Booth Rental Costs, but, again, ask to be clear. Show Service Costs: This is the area where the most confusion occurs. This category of costs covers everything from Shipping to Set-up and Dismantle, and is where the bulk of missed items comes from. Here is an overview of these costs: Shipping (Round Trip) Hanging Sign Labor Rigging (if needed) Floral Compressed Air (if needed) Theatrical Lighting Electrical (Service and Labor) Material Handling (AKA: Drayage) Furniture Rental Booth Cleaning Catering (water, etc.) Audio Visual There are more, but these constitute the most common show service costs. BOOTH PURCHASE Pricing Summary Booth Design, Engineering and Set Up Instructions: As with renting, these are costs for your initial booth design, any subsequent revisions (IMPORTANT ask if revisions are included, in some cases they are not), booth engineering (drawings to build the booth), and set up instructions (drawings to instruct on-site crews to construct your exhibit). These costs range from 3-10% of your total booth construction cost, depending on your provider. Also, graphic design usually is NOT included in these proposals. Typically, exhibit houses rely on their client s in-house resources or advertising agencies to design their booth graphics. Some exhibit houses can do graphic design (but typically not very well), be sure to ask their capabilities. Booth Construction Costs: These costs are for the construction of the material in your booth, and should include carpet, structure, and any test fitting in the shop. Please make sure your provider test fits the booth ahead of time; you would be surprised how many exhibit houses do not do this! This is like taking a car straight off the assembly line and not test driving it! 7

8 Graphic Costs: These are costs to produce the graphics for you booth. See the note above regarding graphic design. Exhibit Prep/Pack/Load on to Truck: This is the labor cost to prep the booth for shipment, load the crates, and load onto the truck for shipment. Sometimes this is included in the construction line item; make sure to have clarity here. Exhibit Return/Rewarehouse/Check for Damage: This is the labor cost to receive the freight after the show, check it for damage, provide basic cleaning and re-warehouse the crates. Many providers have different levels of receipt, and try to up-sell you on an A or Premium level, saying it will save money in the long run. Don t fall for this. It s the equivalent of the extended warranties at major retailers and is often unnecessary. If you plan ahead and manage your program well in advance, there is no need for this added expense; go for the basic service. Show Service Costs: While you can manage requesting services and the associated costs for your exhibit, many exhibitors are choosing to outsource this to their booth provider. We believe you should discuss the situation with your booth provider. A qualified partner will seamlessly manage this aspect of your show, often being more efficient and cost-effective than assigning internal resources, which may lack expertise in show services management. This category of costs covers everything from Shipping to Set up and Dismantle, and is where the bulk of missed items come from, here is an overview of these costs: Shipping (Round Trip) Hanging Sign Labor Rigging (if needed) Floral Compressed Air (if needed) Theatrical Lighting Electrical (Service and Labor) Material Handling (AKA: Drayage) Furniture Rental Booth Cleaning Catering (water, etc.) Audio Visual There are more, but these constitute the most common show service costs. Case Studies Rental or Purchase Based on the above information, you now should have an idea of what is the best solution for your trade-show needs. And if you re still unsure, we ve taken some case studies and examples to help facilitate your decision: 8

9 Case A: The 10 x 10 booth Basically, you should always own your 10 x 10 trade show display (but rent the carpet!). With the price of pop-ups these days (many under $1,000), mid to large-sized companies should have several of these easily portable exhibit pieces. Should you ever rent a 10 x 10? The only time you should rent a 10 x 10 exhibit is if you don t have any booths available and you are testing a show. That is, you are exhibiting at a show to gauge a market and see if it is worth investing with sales staff, continued presence, etc. However, once you are committed to a trade show and a 10 x 10 space, buy a booth and go at it with gusto! Don t rent here. Case B: Company does 4 shows: 1 qty. 20 x 30; 1 qty x 20; and 2 qty x 10 This one is a much more difficult decision. Our recommendation would be to rent the 20 x 30 exhibit and possibly the 10 x 20, and purchase the 10 x 10 booths. Why? If you purchase the 20 x 30 booth, it will take 5 years to recoup the cost of the booth compared to rental, unless you do a large number of shows. Yes, you could build a reconfigurable booth (not recommended, however) that would take care of all of the configurations. It s much more efficient, however, to have uniquely designed 10 x 10 booths, instead of trying to re-arrange a variety of 10 x 10 exhibits into a large booth design. Case C: Company does 1 show a year 20 x 50 Rental 100%. You would be wasting a good deal of money by purchasing this display for one show per year. Case D: Company does 3 large shows (40 x 50, 20 x 50 and 20 x 30), and 5 in-line booths (2 qty., 10 x 20s and 3 qty. 10 x 10s) Recommendation Purchase, with a twist. Typically companies would like to use the 40 x 50 display materials to build all their smaller exhibits, and this can work. All the large island exhibits should come from the same booth material. In-line displays are different, however, and we would exclude the in-lines in this instance. You could possibly make a 10 x 20 display out of the material, but our recommendation would be to have a separate budget for the in-line booths that are crated differently and exist separately from the large exhibit. This is much more efficient and cost effective in the long run. Plus, based on our extensive experience, this is much, much easier to manage! Overall Costs - Exhibit Rental and the XIBITMAX Advantage Some companies won t entertain a rental project for less than $200 per square foot. Because of this, show organizers such as Freeman appear to be the only option for many exhibitors. However, XIBITMAX has been able to carve out a niche of high-quality designs for prices as low as $50 per square foot for booths over 1000 square feet. Regardless, we have found that All Inclusive rental packages can range from $50 to $150 per square foot, or more. What changes over these price points? The lower you go in price, the less original the design, and you receive less graphics and less amenities. Note: This rental vs. purchase discussion does not include the initial cost of your booth exhibit space. 9

10 That is it! Thanks so much for taking the time to read this. We hope this helps your decision-making process and enables you to make appropriate decisions regarding your trade show program. At XIBITMAX, we provide comprehensive show services management for our clients who own or rent their booth. We are completely vested in the management of your booth. If you have any questions or care to discuss your specific situation, feel free to call us anytime: , and ask for Bruce Powell - or drop me a note at Good luck! Bruce Powell Founder & President XIBITMAX Effective Exhibiting LinkedIn: Twitter: https://twitter.com/xibitmax 10

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