I know, I know…you hate “scalpers”. They’re the evil ones who buy up all the tickets to that concert that you were really looking forward to.
Unfortunately, music venues, primary ticket vendors, and Broadway theaters all *love* ticket resellers! In fact, they’ve designed the rules of ticket sales in a deliberate way so as to create the conditions for ticket reselling to thrive.
Primary ticket vendors almost universally sell tickets on different dates for the same prices, almost guaranteeing that the most sought-after dates will get bought up first and get flipped for more money on the secondary market. It’s almost like they’re going out of their way to make sure that all the tickets that are sold at retail are mis-priced, and this discrepancy between the market price and the retail price is what attracts scalpers to the game.
If ticket vendors wanted to stop scalping in its tracks, they’d sell all event tickets in a rolling dutch auction. In a rolling dutch auction, small buckets of tickets are released to the public at incredibly high prices, and if they aren’t purchased at that price, then their price is lowered every so often until someone buys them. It’s a fantastic way to ensure accurate price discovery (a.k.a. supply and demand working its magic to set a market price). In a rolling dutch auction, scalpers wouldn’t have any incentive to buy tickets for resale because they’d have to pay a very high price for each ticket, increasing their risk. Venues/performers would capture the vast majority of the market price of the ticket, increasing their revenue. And customers would simply be competing with one another for tickets, so they couldn’t blame the event promoters for high prices because the high prices are a function of the consumer demand – if you’re a budding ticket buyer and you’re angry about ticket prices being too high, you only need look yourself in the mirror when seeking someone to blame!
Why does the entertainment industry continue to sell tickets in a way that encourages ticket reselling? Quite simply, the industry would rather that its customers direct their hate toward evil ticket resellers. This confusing deception allows the entertainment industry to shrug its shoulders and feign ignorance when the disaffected masses get angry over sky-high ticket prices. “Once we sell the tickets, what happens is out of our hands!”, they’ll whimper, without a shred of penance.
Dipping my toes in
Today is the first time I’ve ever flipped event tickets.
A few weeks ago, I read Vinh‘s post about the spring 2018 Harry Potter production on Broadway. After thinking it over for all of five seconds, I realized that Harry Potter was going to have huge demand from ticket buyers. I wanted in.
I signed up with Ticketmaster under my personal account and had my mom, my girlfriend, and my girlfriend’s mom sign up for the Harry Potter code lottery, too. As it turns out, I was the only one who ended up getting a code. Maybe they’ll get luckier next time.
I knew that the show was going to have some pre-opening shows in March and an opening weekend around April 20th, so I initially searched for tickets in late April. I couldn’t seem to find any available seats, so I set my eyes on May. Ticketmaster offered me six seats in the Orchestra section for some showing in May for $2,500 ( approximately $400/seat), and I let them expire because I thought that May might be too far after the show’s premiere, and I was hoping to get tickets in late April and sell them at a higher premium due to the proximity to opening night. A few minutes later, Ticketmaster offered me one pair of tickets to a show in late April, and I bought them for just over $400 per seat.
I immediately signed in to StubHub, only to see that there weren’t very many listings live yet, and price discovery hadn’t seemed to really happen yet. Early in the day, the Harry Potter listings on Stubhub were like the Wild West: vast, few-and-far-between, with some significant variation in elevation. There just wasn’t enough supply or enough demand to create and balanced market. Nobody knew how much to charge, and nobody knew at what price to buy. I watched the supply slowly rise throughout the morning, but the prices were mostly in the $2,500-$10,000/seat range, and I don’t think make ticket buyers were buying at those prices. I set my price around $5,000 per seat and watched to see if I was able to get any buyers. After an hour, I saw ticket listings for sale on similar dates for less money than I was selling mine for, so I lowered by price to $4,000 per seat, and then later to $3,000 per seat, and so on and so forth, until finally there seemed to be a good amount of supply on Stubhub, with ticket availability for most dates, and prices had fallen significantly, with some tickets selling for less than $1,500 per seat. I tried to keep my tickets priced competitively, near the lowest ticket prices on similar dates. Finally, after dropping the price on my seats to $900 each, my tickets sold, netting me a profit of $750 for about two hours work.
Would I do it again? Definitely. But ticket reselling is a risky business, and I have a lot of other, more productive things to do with my time than resell tickets to Broadway shows, so I’ll probably be taking a breather until the next time a sure-thing reselling opportunity comes along.
Generate points and profits flipping tickets using credit cards
Ticket reselling can be a really easy way to earn extra points on your rewards credit cards. Which card is best for ticket reselling? That’s up to you, but there are two contenders that stand out the most: the American Express Platinum Card and the Citi Prestige.
The Platinum Card (and any of its co-branded flavors) can be a godsend for ticket reselling because the American Express Platinum Concierge often has access to event tickets that aren’t available to anyone else. In 2016 and 2017, Amex’s Platinum concierge regularly had early access to restricted tickets for Hamilton in New York City, San Francisco, Los Angeles, Chicago, and more. Even better, if Amex didn’t have any special tickets, you could always task the Platinum Concierge with calling Ticketmaster on your behalf while you’re at work so that you can get work done instead of waiting on the phone all day.
The Citi Prestige is a good card to have for event tickets for two reasons: missed event reimbursement and 2X earning on entertainment. Many credit cards offer bonus points on certain spending categories like dining, travel, gas or groceries, but Prestige is one of the few that offers double points on entertainment purchases, which is a broad category that could include movie tickets or tourist attractions. Citi Prestige can also save your ass if you’re in a bind and can’t make it to the show:
If the unexpected keeps you from using tickets (such as tickets for a sporting event, concert, or lecture) for an event, we may reimburse you the price of the ticket up to $500 per ticket, including service fees that are listed on the ticket or receipt. You’re covered for up to $5,000 in a calendar year per account. To be eligible for coverage, you must pay for the tickets at least in part with your Citi card and/or ThankYou® Points. We will only reimburse the lesser of the actual amount paid for with your Citi card (including ThankYou® Points) or the maximum coverage per ticket.
For the purposes of ticket reselling, the Prestige could cover you in case your tickets don’t sell on StubHub, or if you forget to list them for sale in the first place, or if you’re unable to get a refund from the primary ticket issuer. Considering the risky nature of ticket reselling, the Citi Prestige gives you some valuable peace of mind that should not be underestimated.
Have a story to share?
Have you ever thought about event ticket reselling? Have you tried your hand at it and discovered some interesting things that you’d like to share? If so, feel free to email me at email@example.com and I’ll consider publishing it here.