A new online ticketer intends to bring a bit of eBay, and the penny auction craze, into the ticketing arena.
Wilton, CT-based HiLo Tickets is entering the online ticketing space doing double duty — customers are invited either to bid on tickets in an auction-style set up or to jump on a deal with the site’s “Buy It Now” option.
Launched just last week, the company is in the process of setting up auctions for a variety of events, including sports, concerts, theater and other live entertainment. First up for the site in early October: General admission tickets to Swedish House Mafia’s December 17 show at Madison Square Garden (MSG).
In order to bid on an auction, customers buy “bid credits.” These credits, available for purchase both before and during an auction, allow a customer to enter the auction and start bidding. All auctions start at one cent, and each time a user submits a bid credit, the price bid goes up by one penny, making that user the high bidder. As the auction proceeds, screen displays provide information on the ticket’s current difference from face value as well as the monetary value of the user’s bid credits for that auction. When the auction expires, the highest bidder wins the tickets.
For those who do not want to bid on tickets, the site’s “Buy It Now” side invites users to purchase them outright from an available $1 billion inventory, both from its own and others offerings. Here, users may purchase tickets just as they would from any ticket broker. The sources of these “Buy It Now” tickets are not disclosed in order to protect brand for the ticket providers.
Co-founder Rob Perez tells TicketNews that he got the idea for HiLo Tickets when he became frustrated searching for reasonably priced tickets to the Masters last year.
“I couldn’t figure out any alternatives [for tickets] until an idea involving auctions came to mind,” Perez says. “EBay’s business model was intriguing, but ultimately, the tickets always end up selling for the same price they go for on the likes of StubHub anyway. It wasn’t until we experienced a penny-auction Web site called skoreit.com (auctioning retail products), that HiLo Tickets was born.”
Perez and co-founder Ian Wells knew that a bid-based system to sell tickets at well below face value could be attractive to both buyers and sellers. But there was one problem with this model.
“Penny-auction Web sites sell items for massive discounts,” explains Perez. “The catch is, you have to purchase ‘credits’ to participate in these auctions, and only the high bidder wins the item. Everyone else is left in the dust. I was one of the people left in the dust. I spent $30 trying to win an iPad, and I got nothing but a confirmation of my bid package purchase and a debit on my credit card statement.”
Perez and Wells had another idea in mind: “The twist that HiLo introduces to the world,” says Perez, “is [that] all bids placed by customers that did not result in auction victory are fully reimbursed.”
Instead of leaving bid losers to walk away empty handed, the company provides them with a site credit equal to their final bid credit total for that auction. They may then use their credit to purchase tickets at the site’s “Buy It Now” side. As Perez puts it, “If you know you’re going to an event no matter what, wouldn’t you want to try and score those tickets for dirt cheap if you knew that money applies to your ticket purchase regardless if you win or lose?”
The bid system is somewhat similar to the Scorebig.com set up, where users bid on tickets to live events, but HiLo attempts to auction off only sold-out, high-ticket-demand events. Perez actually sees the competition for its business coming not just from one or two rival sites, but from all other ticket brokers. He says, “Anyone who has a market for buying and reselling tickets has a share of the business we need to be successful.”
HiLo’s auction and “Buy It Now” sides provide two streams of revenue, one from users purchasing bid credits and one from the company’s buying and reselling of tickets for “Buy It Now.”
The company currently serves three geographic locations — the New York metropolitan area, Miami-Dade County, and North Carolina — but plans are to expand from there as the business grows in these core markets. “HiLo Tickets would like to become a nationwide brand,” Perez says. “Our plan is to focus on these three areas, drive interest, and have it spread to outlying states.
He continues, “As the brand develops, it’s our hope that the company Facebook and Twitter pages will become home base for our customers, and it will become a forum for people across the country to request events to be auctioned.”