Why Promoters Make So Much Money

I wanted to discuss something that I think is very important but some promoters just aren't grasping...I want to make sure everyone understands this completely, that's why I'm taking the time to post this topic...

Some people new to this business seem a little skeptical as to how they can make a lot of money promoting. They just don't seem to understand how much money is involved in the club, bar and party business.

It's a multi-billion dollar business yet people seem to not fully understand how a promoter can make so much money.

I keep getting asked "how can promoters get paid so much"or "how can the clubs afford to pay them so well"
...and here's the one-word answer to "how can they afford to pay them so well?"...

Alcohol

Clubs, bars, pubs or any place that sells alcohol work on a tremendous markup--one of the biggest in any business.

If you don't believe me, just think of that bottle of beer you bought in the club--the one you paid $7 for...just for ONE BOTTLE!

But, if you went to your local grocery store, you could buy an entire six pack of that same beer for about the same price...AND the grocery store is making money on you.
The same goes for wine, mixed drinks, and shots!

If you really think about it, everything at a bar or club is marked way up. The soda's from the fountain are $3 and that bottle of water you want just to cool down...another $5.

Also, remember, they are getting a good deal on it because the venues are buying the beer, wine, and liquor in BULK!

....think about these profits!

Individual drinks are just one revenue stream alcohol brings to the club...another is bottle service.

Typically, these bottles are served at the tables when you "buy a table" and most of the time, to get these tables, there is a 2bottle minimum.

The bottles that are sold are often marked up almost 900%! A $40 bottle of Grey Goose sold at the liquor store is sold to a table of people eager to have a great seat for over $350. That's more then a $300 profit *per* bottle!

One of the clubs I used to promote in New York City, brought in very high end clients, and the bar tabs were often way over $2,000 per night for each table.
Multiply this out and think how much money the bar is raking in. And again, the profit margin is very high on liquor so most of that is going into the pockets of the owners!!

....So how does this effect promoters?

Well, owners will do anything, or should i say PAY ANYTHING, to get people into their venue.

They want it packed to the brim with people who are willing to fork over money for their pricey drinks. (With these mark-ups, can you blame them?)

Now, if you are able to pull in a high-end clientele, the kind of people that buy bottles of liquor, clubs will really love you.They'll pay even more to those promoters that can bring in the "high-end" clientele that are willing to pay for the bottle service.

Lets look at this quick from a numbers point of view...

- imagine if every person that came into your bar spent $50.

- you knew that you profited $30 from that $50 spent.

- you pay promoters $10 for each person they could bring in....

...you profit $20 for each person a promoter brings to your venue.

Would you give a person $10 if you knew it meant you'd make $20 in PROFIT? Of course you would--and the owners do!

I hope that you can see how easy it is for promoters to get paid for every person they bring to the venue. Owners want to pay you this money because it means they have a lot of people in their venue and THEY are making money.

So the more people you bring, the more money the owners make and the more money they are going to pay the promoters! It's pretty simple.

As long as alcohol is around (I don't think it's going away anytime soon--they tried that once and it didn't work out too well) there will be bars & clubs looking to fill their venue with thirsty clients willing to pay for their costly drinks...

...and that means there will ALWAYS be a need for promoters to fill these venues!!

The Do's and Dont's of Promotions

Everyday I get lots of emails from promoters asking me questions on how to get started, how to make their business better, and how to throw the best party in town.
Recently though, I've been getting another question, almost on a daily basis, so I figured it would benefit everyone to address it in this blog...


"What are the BEST promotions to use to make my
party the hottest party around?"

In order to address this question I want to lay out the different kind of promotions, so you know what I mean when I say "promotions"...

1) Party Promotions:
these are promotions that are often tied to a theme or party concept. An example would be "Pimp 'n Hoe's" party or the"White Party" (like P. Diddy throws annually)

2) Bar Promotions:
these are promotions designed to drive traffic to the bar of the venue, such as nickel beer night, buy 1 get 1, or happy hours.

3) Door Promotions:
These are commonly used to get people in the door, such as Ladies Night or reduced admission before 10pm etc.

But first, I want you to ask yourself "why am I using a promotion" and do I really think this will a) make me more money
b) make my party that much better or
c) will it solve a problem that I am having

DON'T JUST USE A PROMOTION, TO USE A PROMOTION...

Promotions are great. I'm a big fan of them.
....But I also know that the fastest way to lose a crowd is to use too many promotions. (or the wrong promotion)

I've found my crowd gets bored of too many promotions and gimmicks, so i save them for when i really need them. I keep them locked away and only bring them out on special occasions.

Promotions are a good way to help a slow night or to pad the register on "off nights". They can also be used when you're starting to throw a new party or if your looking to pull an earlier crowd.

The key is to decide what your problem is that makes you feel that you need a promotion. Then see if you can come up with a promotional idea that will help to solve the problem.

An example would be:
If your crowd is showing up very late each Thursday night then try a reduced admission before 10p promotion to see if you can draw them into the venue on the early side.

A couple of quick Do's and Don't for beginners using promotions:

Do's:
Do use promotions that are right for YOUR CROWD. Don't just try out a promotion that you read about online or saw at a party.Make sure the promotion fits your crowd well.
Do ask the venue to pick up the tab or split the costs of the promotion. (if there are any)
Do spread the promotional ideas throughout the year...try not to use more than 1 a month.
Do use them on your softer nights---the "off nights" like Sun-Wed.

Dont's
Do NOT use a promotion your first night at a venue...try the venue out first and see how it goes before you add a promotion. You might not need one at all when first starting out.
Do NOT over use promotions...too many and your crowd will get bored.
Do NOT use a promotion on a Friday or Saturday night. (unless you are desperate) These nights should be bringing in the cash without a promotion at all!
Do NOT get too focused and distracted with using catchy promotions.Focus your time more on building your list of clients...you'll make a lot more money in the long run if you do!


Bonus Golden Tip:
Just so you get an idea, here is when I will use promotions:
If I'm throwing a party on a off-night and I'm having trouble getting it going, i will try a promotion.

If I'm trying to get people to come to a venue that is out of the way or maybe a brand new spot that no one ever heard of, then I might try a promotion.

If I've been throwing parties that make good money, but I see that the money I've been making at this venue is leveling off (not increasing every week) then I'll try a promotion.


Using promotions can be a great way to increase traffic and awareness of your party, help solve problems on slow nights, or add some life back into your regular parties.

But before you use them, make sure to know why you are using a promotion and how it will help your business make more money (isn't that the key to everything we do?!?!)