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Justin Bieber

When:

Friday, Dec 10, 2010
7:30pm

Where:

Madison Square Garden
4 Penn Plaza
New York, NY 10001

 

  Fi

Find Justin Bieber Tickets

The Ticket Broker Business

Wednesday, December 31, 2008

Isn't Ticket Scalping Illegal?

Is Ticket Scalping illegal? There are two sides to this question. First, is that the individual or business that buys the tickets in advance is taking the risk that there will be enough interest in the tickets to make a profit later. This is simply disambiguation or the supply and demand model, which regulates all commerce in the Free World. Secondly, other people state that the only reason the events are sold out in the first place is because the ticket brokers bought up all the tickets when they went on sale making it sold out and ticket brokers shouldn’t be allowed to do this.

Well, to the second point they are not. There is usually a limit on the number of tickets that can be purchased from a given address, person, email address or credit card. Also, many of the presales require a Fan Club membership to purchase tickets in advance with added costs and limits also.

The first point of supply and demand like any other speculative endeavor has its prices. The Ticket Brokering business has a tremendous number of applications with eBay being the most used in that at any given time there are approximately 65,000 plus sales for tickets listed. Most of these are listings in which people are either trying to unload their tickets for events that they cannot attend but more often someone has purchased the tickets and wishes to resell them at a profit.

There is no assurance that number one the tickets that are listed on eBay will sell at all and number two that the expected sales price can be obtained, The downside of using eBay is that if the tickets don’t sell the seller still generates expenses in the form of listing fees.

However, eBay is a great venue for new brokers to use to sell tickets who don’t have a customer base, have no website and thus no exposure or simply want to test if this business model can work for them. The key to success as in any retail or wholesale business is to buy low and sell high.

But how low is low enough and how high is too high?

One can purchase tickets from different sources, Ticketmaster, Craigslist or even eBay itself in advance of the event and then turn around and list your tickets back on eBay. This can be profitable but is very risky, particularly if one is not experienced in the buying and selling process.

Just today, tickets went on sale on Ticketmaster for Miami Dolphins Playoff Home Game 1. The only tickets available with fees cost $90.25 each. These in Section 418 Row 29 which is almost at the top of Dolphins Stadium. Comparable tickets are selling on eBay for about $40-$50. So this is not a viable means to acquire those tickets. It would be much more advantageous to buy those on eBay to begin with.

Thus, one can purchase tickets for below face value on eBay and speculate that as the event gets closer they will appreciate in value and one be able to sell at a premium to the original purchase price. As was mentioned, there is no guarantee that this will occur. As with any business that depends on a physical inventory, the key is to buy the product wholesale and sell later for more. This is true whether it is jewelry, clothing, home improvement products or event tickets. The problem with the ticket business is that the inventory is time sensitive. The products will expire after the event and then be worthless.

The ticket brokering business is not extremely difficult but it is a tricky business to be able to be profitable at. Things maybe going great one day, profits rolling in, all of your inventory being turned and your customers happy. Then the next day can be wrought with all kinds of troubles. “Customers” giving you bogus credit cards over the internet, events being undersold and your tickets not selling at all, Express Mail not being delivered on time before that “Big Game”. Bye the way, guaranteed deliver by 3:00 PM only guarantees against the postage paid and the $500 automatic insurance is not automatic. I’m not a FedEx stockholder but I definitely believe in them now.

Nevertheless, the ticket brokering business if approached systematically can be very rewarding, both mentally and financially. Treating your customers right is a good first step. Get them the tickets they want at a reasonable price. Don’t buy General Admission tickets, they’ll probably be available at the door and watch the venues you’re considering. The resell market is a lot better for The Eagles and Britney Spears in Dallas and NYC than for Ryan Cabrera or Mudvayne in Corpus Christi, Texas or Des Moines, Iowa. Sorry, Corpus and Des Moines but that’s the facts. Same goes to Ryan and Mudvayne.

Ticket Scalping in its purest sense is standing out in front of a venue and selling tickets to would be attendees at an inflated price. This is illegal and most municipalities have ordnances against this. However, the ticket brokering business is legal in most states with a few exceptions in which thirteen states have laws that prohibit ticket scalping. These being Arkansas, Connecticut, Florida, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Rhode Island, and South Carolina but this can usually be circumvented by sellers in other states using the internet or imposing a service charge to supply the tickets.

So ticket brokering is not illegal but it is also not guaranteed profitable.

Michael Davis is the President of EZ-Ticket.com, an independent ticket brokerage located in Dallas, Texas which has been in operation since 2002.