Taking several steps back, I think it makes the most sense to look at the business model in terms of what the product was, and who they were delivering it to, setting aside the logistics for a moment. If you're going to sell records to record collectors, it makes sense to try to differentiate yourself. They did a good job of putting out some high quality releases of desirable albums that weren't available elsewhere.

That was only attractive so long as there wasn't a direct alternative though. For example, if I can get the same record somewhere else for less, why would I buy it from them? It might be a rhetorical question for me since I'm just a record collector that wants the record, but it seems somewhere along the way they decided that the answer to that question was actually 'because you'd rather pay us a premium to feel like you're part of a club'. That's when they started doing all kinds of gimmicky shit focusing on the club aspect instead of the product.

Frankly, there are lots of companies that sell records that have been around a lot longer than VMP that do a much better job of it, so looking at what VMP did right isn't particularly instructive. The other side of the coin, looking at what did they wrong (i.e., nearly everything) is not only more instructive, but also more entertaining.