The Economics of Ticket Scalping
Why would someone want to be a ticket scalper? What benefit can they hope to derive from frequenting events in order to find buyers for the tickets that are in their possession? After all, there are ticket agents and brokers, so those who attend the events shouldn’t have the need to be approached by a ticket scalper. Truthfully, if that were true, ticket scalpers would not be able to stay in business.
Before you attempt to answer the above questions, think about the economics involved in being a ticket scalper. The scalper buys tickets at face value, and for the sake of convenience, we'll say $30 and sells them at $50 — that’s a profit of $20 for every ticket he resells, or a profit of $200 for every ten tickets. Of course, the picture I have painted here is not the real picture as most scalpers charge much more than that — generally about three times the original value of the ticket. If the scalper has a large number of tickets to sell, he has the potential of making a great deal more money than that.
Ticket scalping is nothing more than a secondary market for ticket sales, and as long as people are willing to invest in attending events, scalpers are going to be willing to take part in the economics of it. The real problem lies in the fact that a few of these scalpers sell tickets for events that truly are sold out or seats that have already been sold, and someone is left out in the cold when it’s time for the show or event. These few “bad apples” make it difficult for some of the honest scalpers who are just trying to provide the public with what they want. When there is fraud involved, it leaves the management in the position of trying to determine if the ticket holder has a legitimate ticket or if they must deny entrance even though the patron has paid the price for the ticket. The purchaser must become more observant and know the scalper with whom he chooses to do business.