Ticket brokers, also known as ticket scalpers, make their money by buying tickets to popular concerts, sports games, and other events and then reselling those tickets at a higher price. This allows them to profit from the difference between what they paid for the tickets and what buyers are willing to pay for hot tickets. So how lucrative is this business? Here’s a look at how much money ticket brokers typically make.
What is a Ticket Broker?
A ticket broker, or scalper, is a person or company that buys event tickets with the intention of reselling them to make a profit. Brokers will acquire large quantities of tickets, often using special software or insider access, and then sell those tickets at significant markups compared to face value.
Some key things to know about ticket brokers:
- They make money by charging more for tickets than they paid. The difference is their profit margin.
- Brokers get access to tickets ahead of the general public through special presales or business contracts.
- They use technology like ticket bots to automate mass ticket buying.
- Tickets are resold on secondary marketplaces like StubHub or through a broker’s own platform.
- Broker prices can be 2-10X or more the initial face value of tickets.
While sometimes criticized, brokers provide a way for fans to get access to in-demand tickets sold out through primary vendors. The markup generates significant profits for successful ticket brokers.
How Do Ticket Brokers Get Inventory?
Ticket brokers employ a variety of methods to obtain inventory and secure tickets to resell:
- Presales and preorder codes – Getting early access to presales through special codes and promotions.
- Season ticket holders – Buying unused tickets from season ticket holders looking to sell extras.
- Ticketindustry contacts – Leveraging industry connections to access VIP allotments and reserved tickets.
- Ticket bots – Using specialized ticket bot software to automate mass ticket buying.
- Speculation – Pre-ordering tickets in bulk for events expected to sell out and have high demand.
Having large inventories and access to prime tickets is key to brokers being able to maximize profit margins. The largest brokers may acquire hundreds of thousands of tickets or more for major events like the Super Bowl.
What Are the Revenue Sources for Ticket Brokers?
There are two primary revenue sources for ticket brokers:
- Primary ticket sales – The core revenue comes from reselling tickets at marked-up prices. Brokers aim to sell out inventory at the highest prices the market will bear.
- Service and processing fees – On top of ticket prices, most brokers add on extra fees like shipping, insurance, and order processing charges.
For high profile events, brokers can make upwards of 5-10X their cost or more. Fees provide additional income. Top brokers generate 8 and 9 figure revenues annually in total ticket sales.
What Factors Determine Broker Ticket Prices?
Brokers use a variety of strategies to set and adjust prices to maximize profits. Key factors include:
- Event popularity – More demand allows higher markups. Big concerts and games typically have higher broker prices.
- Ticket availability – Limited tickets means brokers can charge more. As events sell out, prices go up.
- Market value – Brokers research sale prices on secondary markets and price accordingly.
- Tiered pricing – Better seats (front row, VIP boxes) command higher prices than nosebleeds.
- Timing – Prices increase as events get closer and inventory declines.
Brokers use dynamic pricing algorithms to adjust prices in real-time based on market conditions. Prices for the biggest events like the Super Bowl can fluctuate by hundreds or thousands of dollars over the sales cycle as factors shift.
How Much Money Can an Individual Ticket Broker Make?
The earning potential for an individual ticket broker varies widely based on things like:
- Sales volume – More tickets sold means more potential profit.
- Profit margins – The amount above face value a broker can charge per ticket.
- Costs – Overhead like employees, sales platforms, and inventory acquisition.
- Experience – Veteran brokers with industry connections make more.
A solo broker selling a few thousand tickets per year to local events might make $50,000-75,000 or so in profit. At the other end, large brokers selling millions in tickets can make $10-25 million. Top performers with access to the hottest events can make substantially more.
There are major players in the ticket broker industry that generate 9 figure sales totals and 8 figure profits annually. But building to that level requires significant capital, insider access, technology, and business infrastructure to manage high sales volumes across major events.
What Is the Revenue of Major Ticket Brokerage Companies?
Looking at the sales and revenue numbers of the largest ticket brokerage companies provides a view into how big the secondary ticket market is:
- StubHub – StubHub is the largest online ticket marketplace. The company reportedly sells tens of millions of tickets per year and generates over $1 billion in annual revenue.
- Vivid Seats – Vivid Seats is one of the largest independent secondary ticket marketplaces. They sell millions of tickets per year across NFL, NBA, MLB, NHL, concerts, theater, and more. Estimated annual revenue is around $500 million.
- TickPick – TickPick is a leading no-fee secondary ticket marketplace that has sold 5+ million tickets. Revenue is likely in the ~$250 million range annually.
- SeatGeek – SeatGeek provides both primary and secondary ticket sales. They report facilitating $2 billion+ in annual ticket transactions across dozens of leagues, teams, and venues.
- Gametime – Gametime is a mobile-focused last minute ticket app. They’ve raised over $130 million in funding and generate 8 figure revenues on strong growth.
The largest brokers are profitable multimillion dollar companies, with some on pace to hit billion dollar valuations. But the industry remains fragmented, with thousands of small independent brokers and resellers also participating in the lucrative secondary ticket market.
How Profitable is the Ticket Broker Business?
The ticket brokerage business can be extremely profitable due to the high markup on tickets and strong demand environment. Some key profitability factors:
- Gross margins for brokers frequently top 30-50% or more of sales.
- Large brokers benefit from scale and being able to better absorb fixed costs.
- High demand and scarcity for top events allows large profit margins.
- Industry consolidation is driving growth among leading brokers.
- Adoption of ticket bots and AI pricing algorithms further optimize pricing.
Major players like StubHub and SeatGeek are generating hundreds of millions in sales and likely $50-100+ million in profits annually based on the size of the industry and comparable business margins. The largest brokers have built multi-million dollar businesses from their ticket brokerage operations.
What Are the Biggest Costs and Risks?
Running a ticket brokerage also comes with substantial costs and risks:
- Inventory acquisition – Paying upfront for large supplies of tickets ties up capital.
- Employees – Staffing for sales, marketing, technology, and support.
- Platform costs – Fees for secondary marketplaces, bots, and tools.
- Overhead – Offices, legal, finance, insurance, etc.
- Unsold inventory – Eating costs of tickets that don’t sell as expected.
- Fraud – Fake tickets and chargebacks from buyers.
These factors can cut significantly into profit margins, especially for smaller brokers. But for established players, strong cash flow and business infrastructure helps smooth out those costs.
Is Reselling Tickets Legal?
The legality of ticket brokers and scalpers depends on local regulations. In many states, reselling event tickets is perfectly legal and regulated. However, some areas do have laws restricting or banning ticket scalping entirely or under certain conditions.
Common legal restrictions include:
- Price caps on markups over face value.
- Prohibitions on selling within proximity of an event venue.
- Requiring a license to resell tickets.
- Limiting the number of tickets brokers can buy.
Violating these laws can result in fines or even criminal charges. Brokers must be careful to follow all applicable local ticket resale regulations.
That said, the ticket broker industry operates openly in most states and areas. StubHub processes tens of millions in resale transactions annually, for example. So long as brokers adhere to local rules, the business remains overwhelmingly legal.
Conclusion
The potential profits in ticket brokering are huge. Major players earn 8 and 9 figure revenues with strong margins in the billions-dollar secondary ticket market. Even smaller independent brokers can build six-figure businesses.
Of course, costs are also substantial when managing ticket inventories at volume and larger brokers handle millions in sales. Profitability ultimately comes down to factors like access to top-tier ticket inventory, pricing optimization technology, and effective business infrastructure to support overhead and costs.
For those able to capitalize on the scarcity and demand around major concerts, games, and events, ticket brokering provides an opportunity to generate significant profits each year. The secondary ticket market looks positioned for continued growth as events recover from COVID slowdowns and fan demand remains high.