April 2006
Best Practices: Spin-off services
SHOPA’s Buyer 2 Seller MarketPlace generates new revenue stream
By Cathy Chatfield-Taylor

The growing popularity of one-on-one events led the School, Home & Office Products Association (SHOPA, www.shopa.org) to launch the SHOPA Buyer 2 Seller MarketPlace (SBTS) in 2002. Within two years, the new subsidiary, SBTS Inc., generated a profit and, by 2007, will fully pay for the matchmaking software that makes it all possible.

“We set up the for-profit subsidiary to take advantage of the business model where vendors pay registration fees, and there are no costs to buyers,” says Steve Jacober, President of the Dayton, OH-based association, which represents 1,500 manufacturers, wholesalers and distributors in the $311 billion school and office products industry. “As we developed expertise, we saw an opportunity for the association to generate revenue to support our industry.”

Now a full-service meeting and event planning company with eight full-time employees, SBTS not only runs the SBTS marketplaces but also operates one-on-one events for Messe Frankfurt Exhibition GmbH (www.messefrankfurt.com), a global trade fair organizer headquartered in Frankfurt, Germany. The business will produce nine marketplaces in 2006 and generate $2 million to $3 million in revenue.

Behind this successful operation is custom-built software that stores data on people and products, matches buyers to sellers, schedules appointments, and records product buying notes, among other functions. SHOPA hired programmers in 2001 to tap staff expertise and develop the application. Beta testing with member volunteers worked out the bugs. Within 16 months, the software was ready for the first marketplace, where 50 buying groups met with 57 vendors.

All participants were equipped with laptops loaded with tools to facilitate their meetings, and buyers used handheld scanners to record product codes in the showroom. Although the matchmaking software handled the scheduling challenge, the staff had to overcome logistic challenges such as getting people to their appointments on time and training them how to use the tools.

Feedback fueled improvements in both the software and operations. By the Sept. 26, 2005, SBTS MarketPlace in Las Vegas, 56 buying groups and 77 vendors met through 4,620 appointments. A CD-based primer walked participants through the matchmaking process and individual orientations familiarized them with the equipment.

Marketplace events complement SHOPA’s annual trade show by introducing buyers to products up to a year before they’re ready to write purchase orders. The events may even boost trade show attendance.

“The traditional trade show format is undergoing changes, and the SHOPA show is no exception,” Jacober says. “There have been dramatic declines. The SBTS format is making up for lost revenue.”

The International SHOPA Show had declined from more than 500 exhibitors several years ago to just 377 in 2004, the last time it was held. In 2005, SHOPA partnered with Messe Frankfurt and PROPAPER (a Spanish trade association) to produce the first Paperworld USA, held Nov. 9-11, 2005, in Las Vegas, with 390 exhibitors and 4,025 attendees.

In addition to Paperworld, SHOPA entered into a four-year agreement with Messe Frankfurt in October 2005 to produce marketplace events for various industries. For school-and-office product events, they’re joint partners and share revenue. For other product categories, SBTS is an independent contractor for operations and receives a percentage of net profits.

This revenue will help repay SHOPA’s original $1.6 million investment in SBTS technology and, as the subsidiary grows, contribute to up 40 percent of the association’s overall revenue stream.