Over the years, I’ve seen many music industry businesses, specifically in the world of pedals, jump in the game. This field is insanely saturated, but the market is big – and it’s a great opportunity with a person with a dream to start something and see where it goes. These people start in the basement, on the kitchen table, the spare bedroom, etc. Some can continue the grind and begin the slow growth of a business. Growing with employees and growing into a larger shop, etc. There are the dreams of selling products world-wide and develop a well-known and iconic brand.
I’m writing this post, because with COVID-19 and some of the positives that can come from this. Many of these people lost jobs or are working from home. Gears begin to turn and the thought of cranking up that business that has always been on the back-burner is suddenly timed right. Some of you are taking the leap.
Often times when I run into people starting out, NAMM (National Association of Music Merchants) is brought up. The idea of exhibiting at NAMM and have a large chain or distributor pick up the line – and whammo – you’ve made it.
I thought I would write a post basically outlining some pros and cons as well as a potential checklist to see if you and your business are ready for NAMM. I also wanted to outline some possible tips as well if you are ready.
But first, let me step back, I was a person dreaming of a business in the music industry. I started with a single counter top in the basement when I started Rattlesnake Cable Company. I’ve been to NAMM as a guess in 2018 and January of 2020 Rattlesnake purchased booth space. So I know the struggle. I know the feelings (and meaning) of going to NAMM. I’ve been meaning to write this post for a while.
NAMM Costs, Mistakes and Tips
When talking about NAMM, there is a feeling of FOMO (Fear of Missing Out). You see your business peers, you see the press at the event, etc. You see the excitement and buzz surrounding the event. Just getting into the game you might have a feeling you’re not worthy and your product or business is too young. Those feelings are normal, and potentially accurate. Don’t doubt your ability, worth, product, etc., but definitely question your process, your execution and scalability. Those are things you have to have a vision of before making any moves.
The next hurdle is cost. NAMM, is expensive. You’re spending $34/square foot. So a 10×10 is $3400 for just the concrete. You have to calculate your booth creation, travel, employees, food/lodging, Ubers, etc. At the end of the day, I would say you need to have $10-$15K set aside for that. Please note, that is Winter NAMM costs. Summer NAMM is probably half the cost, but less than half the size (that could be good or bad, depending).
Most new businesses start to see if they can hack this. To me, this is your #1 mistake – how to get your expenses cheaper by compromising. First compromise I see people do is to share the booth other companies. So, let’s say if I can get 2 other business to share the 10×10 and now I only have to pay $11.50/square foot. So now I have to come up with $1150 vs $3400. This sounds good on paper. But now with a 10’x10’ square, you might be sharing that with 6 people. That makes things tight. Sharing the marketing oxygen with those other businesses too, is difficult – meaning that people will be asking about a product that you are not associated with. People visiting the other businesses will block the view of people that might be into your product or business. Not good.
Another failed hack that you might jump on is to share lodging. It would be nice to not buy a hotel room for yourself or your crew/associates and maybe crash with a buddy that lives nearby or to maybe crash on the floor of buddy-business. That definitely will save money, but I have to say NAMM is exhausting. To be able to get good rest is important. A bed is gold.
For us, we purchased an AirBNB 1 mile away from the convention center. We could walk or take an Uber it was well worth it. The AirBNB also had a kitchen so we went grocery shopping and stocked up our fridge with late night meals and could even pack lunches depending on the day. The AirBNB was the same price as a hotel room, but we had living room and 3 beds available with a kitchen. Well worth it.
The next mistake is to skimp on the marketing. If you’re going to have a booth at NAMM, you should be all in – or not in at all. Get the brochures. Get the stickers. Do your best on the booth build. Bring product. You need to come with the A game. It’s more about “just being there”.
When dealing with marketing and product, you will then need to deal with shipping and freight. This is expensive – and scary. The thought of your booth or product not arriving – would not be fun. As a NAMM member and in their system, they provide all sorts of shipping partners and scheduling. This was the most stressed out portion of my experience, but after going through it – my confidence in the system is extremely high. They do an amazing job and have it figured out. It’s just intimidating to know and jump through the hoops. But like with everything, after you do it, the next time will be a piece of cake.
This again, is another mistake I see people do. Let’s save on shipping and drive it there ourselves. I don’t know how you would even do that with getting the pieces into the convention center. Driving it there to Anaheim, no problem, but walking all the pieces in could be an exhausting nightmare. When you freight stuff, the box is sitting at your space. You have to weigh in travel days on the road, with lodging, food, gas, etc. You need to factor dealing with traffic and parking, etc. Just the extra days alone on the road there and back is time expensive. If we did that, we’d be on the road for 4 days there and back. That’s 4 more days I didn’t have to deal with NAMM. Like I mentioned, NAMM is absolutely exhausting. The thought of me driving for 48 hours after NAMM was over? No way.
So I talked about some of the mistakes and it’s primarily focused around money – or how to not spend money. In my opinion – pay the money. So, when I say $10K-$15K total, there are some good hacks, that I’m blown away that people don’t do. First one, hustle and do some research on your state. Many states offer a grant program through the Department of Commerce. Look for incubator, SBA, business resources for low interest rate loans or partial grants. Look for sponsorships, etc. There are some free money out there to help cut the costs – by a ton! Get a credit card with low interest and no interest for 12 months. Assign that as the NAMM card. That will give you some wiggle room when you’re purchasing plane tickets, AirBNB, etc. If you’re lucky, it will have cashback rewards or miles that you can apply down the road.
Are you ready for NAMM?
Okay, with that out of the way, let’s talk about if you’re ready for NAMM. What do I mean when I say “ready”? Like I mentioned above – you may need to question your process, execution and scalability.
The general point of NAMM is to interact with dealers as potential buyers. Other points are exposure, network connections and brand awareness. Exposure, connections and brand awareness do translate to sales but as a long play. The short play is quick transactions with dealers.
So first item, what are you wanting from NAMM? If your goal is to get into stores and expand your dealer network – then your ROI will be much faster. If you’re going for brand awareness and networking, expect a much long ROI, and if that’s the case, can you absorb that expense?
Some people (like us) wanted all of the above. So our goal was to break even as fast as we can, but was okay to extend that debt with brand awareness and networking.
I asked the question about process, execution and scalability. This could apply in a bad way if you don’t understand your business and you get a surge of orders. The worst situation you can get yourself in is to work out a deal, and was not able to fulfill it in a way that both parties are stoked on it. So how do you build your product? Can you build a 100 in a month? Do you have inventory? Do you have supplies that can handle a jump? If you’re unsure, then you’re not ready. You should be able to look at your systems and simply say – if we double our orders, maybe even tripled our orders for the month, we can handle it. If you can’t you need to see how to improve your process, your supply line, etc. Get those in place first. It’s good business any way without thinking of NAMM.
The next step is to look at budgets. If we go on the low end.. say $8K-$12K, what percentage of that is gross sales? I’ve talked to people that make $20K a year in gross sales. So that would be 50% of gross sales. 50.. percent. That’s too high. You need to find the percentage point that you can ‘burn’ and not affect or hurt the business. Your priority should be on inventory, payroll, expenses, etc. What can you do to cut into that that won’t sting too hard. If you break even at NAMM, then you get it back and your future will retain those new sales. But let’s say you don’t land any new deals, you’ll need to absorb that cost. Hedge your bet a little.
Preparation for NAMM
This is a mistake zone too. You can purchase booth space the day before the event if space is available. There is a deadline to get your booth in the NAMM map and app. That would be a smart move right? So be sure to reserve your space before that. Typically that’s 6 month before or so. Other prep items to consider, and probably the most important, is to design your space. Do that early on. Draw it out. Think of the flow. Think of the crew you need. Start buying your items. Prep your marketing, etc.I would probably give yourself at least 6 months of prep time. More is better. Less will result in a rushed result.
Pro move – buy a fake foam floor.
Scheduling was strategy that worked will for me. Outlining what I had to buy per month, so expenses were spread out. This again falls into absorbing some costs prior to the event allocating profit from 2019 to pay for 2020 NAMM.
NAMM is exciting and is a huge milestone for a business getting into the music industry. Go into it knowing your goals and ROI to maintain expectations. If you’re not ready, as yourself why, and begin the process of goal setting and plan to get in a position to be ready.
With COVID-19, the future of tradeshows is unknown. I’m staying optimistic, knowing that one day we’ll be able to interact in crowded venues again. Summer NAMM 2020 was cancelled, and at the time of this post, there has been no word on Winter NAMM 2021. Also, we need to be flexible of the future and look for opportunities. I’ve been seeing virtual tradeshow notifications – so that could be something to for in the future. When things ramp back up and we get an all-clear, there might be lower costs for flights, booth fees, AirBNBs while people acclimate back to normal – who knows.