RAPAPORT... For the five days of JCK Las Vegas, June 1 to 5, the highest stakes around were not in the city’s legendary casinos, but on the floor of the show. Anyone who walked the halls and met with vendors saw that the exposure and the potential sales were impressive, but the logistics and costs of running a booth and exhibiting diamonds to the world are considerable, indeed. But just how much, exactly, should diamond sellers who obtain a coveted space at JCK, or a show like it, expect to spend?
DOLLARS AND SENSEApart from the $5,000 to $6,000 fee paid to JCK for each space in one of the exhibition halls, a vendor can easily part with $10,000 or more to custom-build a booth and equip it with posters, cases, curtains and lights. In the June show, this expense applied not only to large companies like Philadelphia–based GN Diamond, but even to family-run businesses like Los Angeles–based A&M Diamond & Jewelry Inc.
Sam and Alex Nazarian, the principals of A&M, had to have two booths custom-built to accommodate their inventory. They spent $20,000 on their booths, in addition to handing over $12,000 to JCK for two spaces in the Sands Expo adjoining the Venetian Hotel. All this outlay is apart from whatever is spent on promotion. “We concentrated on our established customers, calling, emailing, going after people,” says Alex.
Generating a preshow buzz can take up dozens of hours of employee time, besides the more tangible costs of collateral materials. Jacqui Ekstein, account executive for Eknam Diamonds, Inc., in New York City, says that he spent $5,000 on ads and mailings before JCK.
Then there’s the cost of moving your inventory to and from Las Vegas and insuring the diamonds. A vendor must hire a security service like Brinks or Dunbar, spending $200 per bag as well as 25 cents per $1,000 worth of merchandise for insurance. For those with huge inventories, like Los Angeles–based Paul Zobian of Modern Art Jewelers, Inc., the transportation costs plus insurance costs easily run $25,000 to $30,000. Other vendors reported spending anywhere from $700 to $2,000 on insurance.
AT THE SHOW
The costs of plane travel to and from the show vary, but once you arrive in Las Vegas, it is evident that a “Las Vegas economy vacation” is a contradiction in terms. For example, of the four people from A&M who attended, two stayed at the Venetian Hotel and two at the Flamingo Hotel, costing about $500 per guest per night, for a total of $10,000. A cup of coffee costs $4 to $5, let alone lunch or dinner with a prospective client in a swanky restaurant.
Zobian paid a model from San Francisco $1,500, plus expenses, to come out and showcase his goods. He also took two prospective customers out to dinner at a steakhouse every night of the show.
Arden Kartalyan, account executive for Diaco Diamonds in New York City, hired as many as seven people to operate the booth, in anticipation of swelling crowds demanding all kinds of information.
NEW VENUEGiven all the costs and work, it is no surprise that some vendors were anxious. They hoped to see a huge return on their investment, something that didn’t happen for the 400 vendors exhibiting at the Las Vegas Convention Center (LVCC) instead of the Sands Expo, where most of the show took place. In an open letter in the “JCK Navigator” show catalog, Dave Bonaparte, group vice president of JCK Events, promoted the fact that for the first time in its history, “the show is taking place in two buildings,” and he invited guests to take the shuttle from the Sands Expo to the LVCC, where they could “take advantage of faster registration, daily complimentary lunches and wine and cheese receptions for buyers.” Each morning, the JCK managers opened the doors of the LVCC one hour ahead of the Sands in the hope that guests would go to the LVCC by default. Hardly any did.
“This idea was an utter failure. This really, really killed us,” says Raj Mehta, the principal of Cincinnati, Ohio–based Regal Jewels International, Inc., in a reaction typical of LVCC exhibitors.
“It was horrible; it was a disaster,” sums up Jacob Kohen, a principal of Amden Jewelry, Inc., in Los Angeles. Amden’s parent company, Ital Gold, was at the Sands Expo, so its staff is all the more aware of the discrepancy between how things went at the Sands — where the volume of Ital Gold’s sales was as strong as 2006 — and the bleak scene unfolding at the LVCC.
“There were no customers, not even a single potential buyer,” exclaims Shakeel Japanwala, sales executive for the New York City–based C.D. Diam, LLC, adding that attendance was so poor that lunches intended for customers started turning cold and the food sellers began giving them away to the jewelry exhibitors. Forget about diamond sales: “I wasn’t even able to give away my brochures; I had to haul them back to New York,” he says.
Modern Art Jewelers’ Zobian questions why people would be willing to leave the Sands Expo to make the 30-minute bus trip to the LVCC. “If the outside temperature is 115 degrees, who’s going to come?” he demands, adding, “In Vegas, if people are gambling $200 on the tables, who’s going to care about a free sandwich? You could have played soccer in the halls, they were so empty.”
“I lost so much business,” says Kartalyan, adding that at past shows, “I got sample orders, people tried an item and then they bought it.” But this year, he says, “No chain buyers came, and my appointments were cancelled.”
DEAF EARSA number of the LVCC exhibitors voiced their concern to JCK’s management. “We sent five emails, but nobody responded,” says Zobian. Others also complained about their concerns going ignored.
When RDR mentioned some of these concerns to Bonaparte, he explained that the Sands Expo could not accommodate everyone, so 150 vendors had to go to the LVCC. Once that decision was made, Bonaparte says, it was necessary to move an additional 250 vendors in order to build up a “critical mass” at the LVCC and attract attendees to the new venue. Bonaparte says that he and his colleagues chose those 250 based on several criteria: number of years exhibiting at JCK shows, product type, customer retail following, booth size and where the exhibitors had been located at previous JCK shows. The idea was to get a diverse group into the LVCC, mixing some first-time exhibitors and some veterans. “It was not our intention to make them unhappy,” Bonaparte asserts.
This explanation does not jibe with what some of the exhibitors say they heard from JCK. “They misled us,” says Paresh Jain, president of New York City–based Gem Wave Inc., who is in talks with lawyers about possible legal action against JCK. “They told me there was construction going on, but that was not it.”
“I don’t know how they got that,” replies Bonaparte. “That’s just miscommunication. As you could see, there was no construction going on at the show.”
(sidebar): The Costs of Exhibiting• Building a customized display booth: $10,000.
• Renting a space for the booth at JCK: $5,000 to $6,000, depending on location and number of years exhibiting.
• Preshow advertising: $3,000 to $5,000.
• Air travel to and from the show (within U.S.): Varies, but often $500 to $600 per person.
• Transporting merchandise to and from the show: $200 per bag, plus 25 cents per $1,000 value.
• Lodging in Las Vegas: Varies, about $250 to $500 per person per night.
• Minimum total cost: About $20,000 to $30,000 for company owner/executive, with costs increasing per each additional staffer who attends.
Article from the Rapaport Magazine - July 2007. To subscribe click here.