VIP Seats an Evolving Business Model

The way we operate VIPSeats.com now is so different than the way we started out in the early 90’s.

Being a ticket broker used to be all about investing in inventory and selling for profit. Buying and selling inventory (our B2B Wholesale Business) is still a big part of our business but things have definitely changed over the years. I feel this change in our industry is not only good for business but great for fans.

The industry’s margins in our early years averaged out to around 50%. Today, our margins have shrunk to around 20%.

Let’s explore how the landscape has changed for ticket brokers.

Technology (1994)
VIP Seats used to store and manage our inventory in large racks. The inventory was handled without computers up until an industry software product, Ticket Trader, was invented and widely used in our industry. This advanced B2B technology enabled brokers to trade with each other anywhere, anytime. Ticket Trader allowed brokers to connect and essentially partner with one another. Brokers could now list and manage their inventory, link to the broker exchange to easily view millions of tickets to thousands of events, reserve inventory, sell out seats, push sales and cost-of-goods sold data to our QuickBooks accounting software, run reports and link to FedEx for shipping.

The software streamlined our operations and not only saved us money but gave us more time to concentrate on growing revenues.

Internet (1995)
VIP Seats developed one of the first online ticket websites in the world with the help of Gerard Gooch. Although archaic compared to our current VIPSeats.com site, the site was mainly used as a useful resource of event information that included industry news, tour information, sports team schedules, seating charts, ticket locations and prices.

Our newer version included the ability to order tickets online and was developed by our brother Aldo Giammusso and his company AldoMedia. A Chicago area company TicketsNow built an online version of Ticket Trader’s software for brokers online. This online tool allowed our staff to work from anywhere and most importantly pushed our inventory to literally thousands of websites across the US and Canada. Much like Ticket Trader, TicketsNow centralized brokers’ inventory but enhanced the service to upload all of this inventory onto our website. This online ticket feed was our site’s central nervous system. Online ticket sales were growing albeit slowly. We were still trying to harness the power of the internet and get eyeballs to our site.

Thanks to a complete site redesign in 2011 by Shawn Corio, branding that included a new logo, affiliate partner program, social media and a Search Engine Optimization Strategy by Alex Szczesny (our current Marketing Director), VIP Seats became a national company almost overnight! After 10 years of trials and tribulations, our e-commerce site was finally profitable and online web sales became the fastest growing sector of our business.

Open Market Legislation
It was always frowned upon to resell event tickets. I never understood why there were laws in place to restrict the resale of event tickets. The policies always claimed “to protect the consumer” when in fact the opposite was true by restricting supply. Ticket Brokers, travel agencies and individuals were skirting the law anyways by offering their event tickets in a package that included a t-shirt or pencil. In our early days, as VIP Entertainment, we offered pre-concert parties, hotels, bus trips, dinner vouchers as a means to create an experience, and of course, to skirt the resale laws in New York State. Looking back, we were at least fifteen years ahead of our time and industry migration and social acceptance of an open market.

The wild-wild-west days were over once the big boys in our industry, the primary ticket sellers, sports teams and venues decided they wanted a share of the secondary market. These players had the resources to overturn legislation at the State level with claims that these restrictive resale laws actually hurt the consumer. Open and free market lobbyists working for such corporate giants as Ticketmaster, StubHub, NBA, NHL and NFL owners were hugely successful knocking these laws down State-by-State like dominoes. Many of these restrictive laws had been on the books since the early 1900’s.

By the early 21st Century, it was legal to resell event tickets in almost every State in the United States and every Province in Canada. Europe is now following suit although years behind. Suddenly the biggest barrier of entry to starting a ticket brokerage business was removed almost overnight. VIP Seats had already been in business ten years at the time and had a good track record, recognizable brand and contacts in the industry. Most importantly, we had a very good reputation and a huge head start over all of the others just entering the industry.

Competition
It was necessary for VIP Seats to change it up to remain successful in an increasingly competitive marketplace. Consumers now had a choice as we were no longer the only game in town. We needed to further invest in our online presence to compete globally and further our brand outside of Western New York.

Again, we knew we had to adapt quickly in order to survive! VIP Seats was always about creating a better experience for our clients in the ticket business.  Our core values have always been and will always be the same. We know that our clients are willing to pay a little bit more for good seats and exceptional service, or what we refer to in our office as a true VIP Experience.

We are thankful to the big boys who brought along an awareness that had always been missing to an underground business and ultimately legitimized the ticket brokerage industry and VIP Seats. Lower prices were great for fans! For VIP Seats, it meant lower margins and higher volume to survive.

There was a definite increase in the supply of event tickets being resold in the marketplace by individuals looking to recoup their season ticket investments or for those just looking to make a little extra money buying and selling tickets. This is the reason we started our <a href=”http://http://www nolvadex australia.vipseats.com/sell_tickets/default.aspx” target=”_blank”>Sell Tickets Program to help ticket owners resell tickets for a profit utilizing our brand, technology, web presence, experience and reputation.

All entrepreneurs eventually learn sooner or later that it doesn’t do any good to resist change. In fact, it’s necessary to take a big picture view and get a sense of what’s going on in your industry, adapt and change or risk becoming extinct.  Keep an eye on your competition, talk to your industry peers and identify trends going forward like your life depends on it because it really does.

~ Nick

 

Nick

Nick Giammusso is the President, CEO and Co-Founder of VIPTIX.com, a ticket marketplace that helps clients buy and sell sports, concerts and theater tickets worldwide. Prior to starting VIPTIX, Nick worked as a concert promoter and box office manager for his god parents Irwin and Monique Pate and their companies Pate & Associates and Prime Seats. He worked his way up to become the Director of Marketing & Ticket Sales at Prime Seats, a Buffalo, NY ticket company. Nick was instrumental in helping to grow a start-up ticket service into what became known as Western New York’s Buffalo Memorial Auditorium Box Office in the late 80′s and early 90′s.