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    How does the ticket scalping business work? 10 points?

    How do those ticket scalpers at baseball games, for example, make money? And how much do they make? I feel like when I buy scalped tickets I buy many if not most of them for below face value. Where do they get all these tickets? Do a big group of people get together and get season tickets? I feel like it would be hard to make steady cash or turn a nice profit scalping.
    10 months ago 1 Answer

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    Scalping used to be mostly innocent activity. Someone would find they had tickets they could not ot did not want to use, so they would stand in front of the entrance of the event and sell their tickets to whoever was looking. The idea was to get the money back instead of taking a total loss. Most were sold for less than face value, but SOME were in high demand, front row seats or some such, and then, scalpers would charge a premium to the desperate souls who simply HAD to get inside. Now, it has turned into big business with "official" ticket resale sites. Some of these ticket resale sites buy huge blocks of tickets with the idea of selling them as the deadline nears, hoping to get more than face value. For popular events, this WORKS. They hoard tickets by being first in line, buying a huge block of premium seating, knowing there would be people who will pay more than face value on the last night for a sold out event. Where I live, they passed a law making it illegal to stand near an entrance and offer tickets for sale. That has caused the increase in popularity of the web sites that resell unused tickets. The original owner of the tickets gets SOME of the money paid back, so it is not a total loss that simply not attending would be. People who wait until the last minute sometimes CAN get a bargain, and the scalper takes their cut. A $100 ticket, for example, may be sold for $75, which is a good deal for the buyer at under face value, with $50 going to the original ticket holder. Sure, the ticket holder lost $50, but that IS better than losing $100 and the scalper takes $25, a huge profit for the little work done. The scalper has NO RISK on a ticket resale. Do you see why this works? As for buying blocks of tickets immediately when they go on sale, THAT is simply the reseller gambling on demand exceeding availability so they can charge more for the ticket than what they paid. They risk losing all of the money paid for tickets that end up unsold. Like the $100 ticket holder, they lose ALL of their investment if the ticket is unsold later. With a $100 ticket, they have to sell each at $125 to make the same $25 profit, and the risk is in who will be willing to pay more than face value. Criminals used counterfeit tickets at sporting events. The fake tickets mostly got you in the front door, but you ended up standing because of course, the real seats went to the real tickets. THAT is why the law outlawing ticket sales by the entrances, to limit counterfeit ticket sales by criminals scalping tickets. All the law did was move the scalpers down the street to the nearest private parking lot, but still, the law HAS had an impact on scalping tickets the night of the event in the vicinity of the event. As for sales, the cash is NOT steady, since you have no idea how many people want to resell their tickets, and buying a block is an outright gamble on whether the event will be popular enough to make the investment back by late sales.
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