Archives For Vendors

Editor’s note: This is the first installment in Al’s series that uses metrics to determine the financial relationship between vendors and festivals.Following articles will end up with internal links here (Part 2). It’s high-season in the outdoor festival business, but we’ll get them to you eventually.

I love to play poker.  When I was a kid, we would play for matchsticks. After the game was over, we would put our matchsticks back in the box, go outside, and play something else.  In poker for matchsticks there was no winner or loser, nothing ventured, and nothing gained.  We played for the fun of it, and a good time was had by all.

photo by Ibrahim Sariahmetoglu

In High School, and then College, we played for cash.  Usually nickel, dime, quarter games with a three raise limit.  It doesn’t seem like much, but after five or six hours and twice as many beers, you could win or lose a months’ rent.  Suddenly the good time was no longer guaranteed.  It was great when you could go home with 20 pounds of quarters in your pockets, but not so much when your solvency had dissolved in a brew of bad luck, bad beer, and bad play.  Poker had become what poker is…..a gamble.

Not being much of a gambler, I sought to improve my odds and remove as much of the ‘gamble’ as I could.  Or, to put it another way, to treat it like a business. Or, to put it yet another way, to understand and then manage the risk of playing poker to improve my profit.  Big surprise…..it all came down to numbers.

I’m assuming for the sake of this article that you are no longer playing for matchsticks.  You know the numbers that one must know to exist and survive as a private business in the 21st century.  You know the numbers of operating your business.  The numbers that I will offer are those relating to the environment in which you do your business, i.e. the relationship between your business and the festival itself.  These numbers are a key metric for you as a craftsperson in determining the return from festivals that you are considering, or in which you are already invested. They also are essential to a festival should it be concerned or curious about the health of the internal economy that it has created.

There are 3 ratios that serve as the main indicators of the potential economic success or failure of a single business and, if left unattended over time, of the entire internal craft economy. These are the cost/patron ratio, the profit/patron ratio, and the patron/vendor ratio.  

For the purpose of this article, I will address the patron/vendor ratio.  It is the leading indicator on which all others are dependent.  It is the numeric expression of the two primary concerns that you, as a craftsperson should have about a show that is asking for your investment.  

The first number, the number of patrons, is an indication of how successful the festival is in bringing money through the gates.  The second number, the number of crafts people who have been juried into the show, is an indicator of the festivals level of understanding or concern for the financial health and wellbeing of those who have invested in their show.  In short, the patron/vendor ratio simply put is; “How big a pie did they bake, and how many pieces did they cut it into.”  To determine the patron/vendor ratio you simply divide the number of patrons by the number of vendors.

A festival is obviously going to be concerned with the size of the pie.  It is the metric which, from their point of view, is the primary gauge of their success.  It is from this number that all others judged.  It is only natural, therefore, that they assume that the same would hold true for the individual businesses inside the gates.  “If we’re doing well, then the vendors also must be doing well.”  This is true only if the festival has either frozen the number of vendors or juried in a smaller percentage of new vendors than the percentage increase of the gate.

 For a vendor at a show it’s not so much the size of the pie as it is the size of the piece.  A show that has 200,000 patrons coming through the gate sounds like a great place to build a booth, right?   It would be a great show to invest in if there were only 100 vendors.  It would be if there were 150 vendors.  It would be ok even if there were 200 vendors…..but that would be the cut-off point for me.

  Over the thirty-some years of observing festivals and businesses I’ve come to a rule of thumb which has held true over the years.  A patron/vendor ratio of 1,000 patrons per vendor for an eight weekend Renaissance festival, or 125 patrons per vendor per day is the minimum amount to justify doing a show with the expectations of an acceptable return on investment.  When the ratio falls below this, money becomes tighter for each business and they have a tendency to start trying to extract what they need for the return on their investment in a more aggressive manner.  They also have a tendency to increase the size and display of lower dollar, bread and butter items in an effort to insure that they can meet the payroll and cover the booth fee.  

This is not a healthy financial environment for you nor is it healthy for the festival.  The patrons will start to withdraw, they will walk down the middle of the lane to avoid the shops.  Some shops, in turn, hire lane hawkers.  Soon there is nowhere for a patron to feel safe from the continuous pressure of being sold something. The experience is akin to paying twenty bucks to spend a day hearing life insurance salesmen and telemarketers trying to sell you their product.

If you are a vendor and you find that, at certain shows, you are having to compete harder for fewer returns, check the patron/vendor ratio.

 If you work at a festival and can’t understand why the lack of investment in booths and landscaping, why the lack of concern from the crafts community for the patron experience, check your patron/vendor ratio. 

If you are a patron and you find at the end of the day, on the way home in the car, or through conversations with friends,  the feeling that you’ve invested your weekend and your money in an experience that was tainted by aggressive sales techniques and low quality crafted products, check the patron/vendor ratio.

Next time—How to guesstimate what the actual gate count is so you can find the patron/vendor ratio….