StubHub is an online marketplace that allows users to buy and sell tickets for sports, concerts, theater and other live entertainment events. The site has become known for having tickets available at heavily discounted prices, sometimes as low as a fraction of the original face value. This leads many to wonder – how can StubHub sell tickets so cheaply?
Supply and Demand
One of the main reasons StubHub tickets can be found for cheap is basic supply and demand economics. When there is more supply of tickets available than there is demand from buyers, sellers have to lower prices to unload their excess inventory. Sellers would rather take a small profit or even a loss on the tickets, rather than be stuck holding unused tickets they cannot sell at all. If an event does not sell out initially, the secondary market like StubHub is flooded with extra tickets from the primary market. StubHub provides a platform that allows all this extra supply to be resold easily.
Similarly, as an event date approaches, if there is excess inventory left unsold, sellers become more eager to dump tickets at even lower prices. They would rather take any price, even an extremely marked down one, rather than be left holding useless tickets after the event date passes. StubHub aggregates all these distressed sellers together in one marketplace, driving prices down through competition.
Last Minute Cancellations
Another factor is last minute cancellations that put more tickets into supply right before an event occurs. Life circumstances or changes in plans can lead some buyers to cancel their ticket purchase on StubHub at the last minute. These tickets get put back into inventory and must be repriced much lower to get resold again within a short timeframe before the event occurs. Sellers take whatever they can get at the last minute to unload the tickets.
Ticket Transfers
StubHub also allows ticket holders to easily transfer or resell their own tickets through the site. Primary ticket buyers who can no longer attend an event they already purchased tickets for will often dump them on StubHub for cheap rather than take a total loss. They may sell them below face value just to get some money back, increasing supply and reducing prices on the site.
Lack of Seller Verification
Unlike some other ticket resale sites, StubHub does not thoroughly verify or vet people who want to sell tickets. This opens up the marketplace to potential scammers and ticket brokers who use unethical tactics to obtain tickets. They may use bots to sweep up tickets in bulk originally intended for the general public. By dumping this supply on StubHub, it drives overall prices down.
Razor Thin Seller Margins
StubHub charges fees to both buyers and sellers in a transaction. On the buyer side, there are service fees and shipping charges added during checkout. For sellers, StubHub charges a commission of around 15% on the final selling price. After covering the cost they originally paid to obtain the tickets, many sellers are left with a slim margin. They keep prices low to move inventory in volume and scrape together whatever profits they can in small amounts on each sale.
Risks to Buyers
While cheap ticket prices may seem too good to pass up, there are risks buyers take when using sites like StubHub. Since sellers are not thoroughly vetted, there is a greater chance of getting scammed with fake or invalid tickets. StubHub does offer buyer protection guarantees, but receiving a refund after getting scammed can still mean missing the event altogether. Buyers also must pay all the extra fees and service charges, so the total price often ends up higher than just the ticket listing price.
Conclusion
In summary, StubHub is able to offer tickets at cheap prices for several reasons:
- Oversupply of tickets flooding the secondary marketplace
- Last minute cancellations and distressed sellers
- Easy transfers of unused primary tickets
- Lack of seller verification attracting unethical behavior
- Razor thin seller margins after fees
While StubHub can provide big discounts on tickets, buyers should be aware of the risks involved in using secondary ticket marketplaces. The lowest prices may come from untrustworthy sellers. Still, for those comfortable with the risks, huge deals can be found on StubHub for major live entertainment events.
Factor Driving Down Prices | Explanation |
---|---|
Oversupply of Tickets | Excess tickets flood the secondary market when events do not sell out initially. |
Last Minute Cancellations | Tickets get repriced lower at the last minute when buyers cancel. |
Unused Primary Tickets | Primary buyers transfer unused tickets to StubHub for cheap. |
Lack of Seller Verification | Scammers and unethical brokers can dump bulk tickets driving overall prices down. |
Razor Thin Seller Margins | After fees, sellers keep prices low to make small profits in volume. |
Other Factors
There are a few additional minor factors that allow StubHub to offer cheap ticket prices:
- Buyers are responsible for all fees and service charges at checkout, so the ticket price itself can seem artificially low.
- Some events simply do not have high demand in the secondary market if the primary market did not sell out.
- StubHub promotions like coupon codes can incentivize buyers to make a purchase.
- Sellers have motivation to get positive reviews, so they may attract buyers with low prices.
- StubHub charges buyer fees but no seller fees for canceled orders, incentivizing cheap listings that may not sell.
Buyer Beware
Again, buyers should exercise caution when purchasing deeply discounted tickets. Here are some risks to keep in mind:
- Fake or invalid tickets from scammers
- No recourse if scammed right before an event
- Total price much higher after fees added
- Stolen tickets originally purchased with fraudulent credit cards
- Tickets cannot be verified or authenticated as real
- Getting assigned seats together is challenging
- Tickets may be oversold if duplicates exist
Alternatives to StubHub
Other large secondary ticket marketplaces like VividSeats, Ticketmaster, SeatGeek and TicketNetwork also offer discounted prices. But buyers may want to consider lesser known options for better deals and buying experiences:
- Direct ticket transfers from primary ticket holders
- Smaller resale sites with better buyer protections
- Fan-to-fan exchanges on social media
- Online classified ads from vetted individual sellers
- Empty seat upgrades offered directly through venues
- Auctions that allow buyers to dictate prices
The bottom line is that the massive supply and lack of protections on StubHub allow sellers to list tickets for incredibly cheap prices. But buyers should be wary of potential scams or hassles. With caution and research, big bargains on live event tickets can be found on StubHub and similar large resale sites.