GearSource.com has been around since 2002, but the online global marketplace of equipment for the entertainment industry hasn’t thought of itself as a tech firm. But that’s changing now that GearSource is using a high-performance platform and preparing to roll out new services.
“I would say I wasn’t brought up as a tech founder, I was brought up as a pretty normal, boot-strapping business guy,” says chief executive Marcel Fairbairn, who launched the business in 2002.
That approach has worked well for GearSource, which gets 70% of its orders through online searches and the remaining 30% through live customer service. Relying mostly on email and word of mouth to build business, revenue growth averaged 5% to 7% annually without acquisitions, says Fairbairn, who won’t reveal actual numbers.
“Everything we’ve done is organic,” he says. “We’ve been profitable almost every year.” The only exceptions were in 2008 in the wake of the economic crash and more recently in the fallout from the COVID-19 pandemic.
Customers range from the Super Bowl to Google and Apple
GearSource provides all manner of lighting, audio, video, staging and rigging, and related equipment to vendors servicing live entertainment venues. Ultimate users have included touring bands and mega-events such as Super Bowl half-time shows, and occasionally such large companies as Google and Apple.
More typical purchasers are companies working with nightclubs, other smaller entertainment venues, and wedding-reception halls. In one notable instance of GearSource working in what Fairbairn calls “very high-touch mode,” the country-music star Morgan Wallen needed 100 rare lighting fixtures ASAP. GearSource found them in Singapore and got them delivered to Nashville in six weeks — a quick turnaround given the logistics involved.
GearSource works both ways, providing vendors with the equipment they want and as a market for disposing of equipment no longer needed by the original buyer. In all, GearSource claims 40,000 users, including 5,000 to 6,000 active sellers offering 933 brands and between 30,000 and 60,000 products, according to Fairbairn.
“I would venture a guess that about 98% of our business is B2B,” he says.
GearSource focusing on fast growth
GearSource’s parent company, GearSource Holdings LLC, is based in Miami, but its 17 employees are fully remote. Most are in the United States, with some in Canada, Europe, and Asia.
Now GearSource aims to grow revenue by 10 to 20 times over current levels in three to five years, Fairbairn says. To do that, it’s going to ramp up search and email marketing, employ some unspecified “in-person branding opportunities,” and possibly return to trade shows, which it used in the past but hasn’t recently.
The company shifted into a higher gear recently after a larger marketplace expressed interest in acquiring it. No deal materialized as GearSource’s would-be acquirer itself became acquisition bait. But the suitor’s interest prompted Fairbairn and his team to take a close look at their operations and business model. They soon saw untapped growth potential.
The platform clearly needed improvements. GearSource had used an in-house platform for 15 years, until 2020, when it was replaced by one developed by a third-party vendor augmented by various plug-ins and custom coding. But while the new platform had some strengths, order documentation sometimes took 30 to 40 seconds to pull up, and it had difficulty handling complex orders, Fairbairn says.
“We were on a Frankenstein platform,” he says.
Managing a complicated marketplace
There’s no lack of complex orders on GearSource. The marketplace operates in 100 countries, thus “we’re a very complicated marketplace,” says Fairbairn. “Sixty to 70% of our transactions involve more than one currency,” he says, adding that all settle in U.S. dollars. The average transaction is $18,000. The company also has to track taxes and logistical data.
Enter New York City-based Nautical Commerce Inc., a multi-vendor marketplace platform founded in 2020. CEO and founder Ryan Lee had done stints at Apple Inc., where he worked on the Apple Pay payments service, and at Visa Inc. in new products and business development. GearSource decided to take a chance, signing on with the newbie last May and going live on Nautical’s platform in November.
So far, so good
“Speed is one of them,” he says when asked about Nautical Commerce’s advantages. Other improvements include better dashboards and reconciliation processes. “The information is more accurate, the dashboards are very clean and simple,” he says. The platform also gives GearSource customers the ability to create so-called micro-marketplaces for their own customers within the GearSource site, he says.
GearSource accepts credit cards through payment processor Stripe Inc., but most of its transactions are wire transfers processed through Nautical Commerce. GearSource charges fees to sellers based on order size and frequency.
Next up, within a couple of months, is the planned launch of a freight-brokerage subsidiary dubbed GearMoves to handle customers’ transportation and logistics needs throughout GearSource’s global footprint. Buyers will continue to be able to use sellers’ shippers or third-party shippers, but GearMoves will provide another option, says Fairbairn. Also in the works, though Fairbairn isn’t ready to give details, is a software-as-a-service (SaaS) offering.
All of this is part of a drive to keep his online market a go-to place for equipment buyers and sellers. “The show must go on is the overriding theme in our industry,” Fairbairn says.
B2B Ecommerce Handbook
This article is part of special report, B2B Ecommerce Handbook: Formulas for Digital Growth, which is available at no cost from Digital Commerce 360.
Jim Daly is a Mount Prospect, Illinois-based freelance journalist covering business and technology.
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