Scalping refers to the practice of buying tickets to popular events like concerts or sports games and then reselling those tickets at a higher price. Scalpers, also sometimes called ticket brokers, often use bots and other means to buy up large quantities of tickets the moment they go on sale. They then turn around and sell the tickets on secondary marketplaces at significant markups compared to the original face value.
Scalping is a controversial practice, but it persists because there is money to be made from the high demand for hot event tickets. Fans are often frustrated when scalpers buy up all the tickets and prices skyrocket out of their budget on resale sites. However, scalpers argue they are providing a valuable service to fans who are willing to pay more to secure seats.
So what exactly do scalpers do with all the tickets they acquire? Here is an in-depth look at the scalping business model and what happens behind the scenes.
How Scalpers Obtain Large Quantities of Tickets
Scalpers utilize a range of methods to buy up as many desirable tickets as possible when sales open to the public:
– Bots – Scalpers often use special software bots that can automate the ticket buying process online. These bots can search for tickets and complete orders far faster than any human could manually. This allows scalpers to snap up huge volumes of tickets within seconds.
– Ticket Brokering Networks – Large scalping operations form networks with individual scalpers and brokers. By pooling their resources, they can buy more tickets and corner larger shares of the market.
– Season Ticket Plans – Some scalpers purchase season tickets to popular team sports like football or basketball. This guarantees them a steady supply of tickets to resell at a markup for individual games.
– Pre-Sale Codes – Scalpers try to obtain pre-sale codes that allow access to early ticket sales for fan club members or credit card holders. This gives them first crack at inventory before the general public.
– Multiple Accounts – Scalpers will create multiple user accounts across ticket sales platforms to circumvent purchase limits imposed on individual buyers. This expands how many tickets they can obtain.
– Onsale Services – Scalpers hire onsale service companies who specialize in quickly acquiring tickets from primary ticket sellers using an array of manual and automated tools.
The bottom line is that scalpers use every trick and tactic they can to beat out regular fans and purchase as many tickets as possible for sought after events. Their access to technology and networks gives them a major advantage over the average ticket buyer.
How Scalpers Store and Keep Track of Ticket Inventory
To run a profitable scalping business, ticket brokers must carefully manage large ticket inventories across multiple events and venues. Here are some of the ways scalpers store, organize, and monitor their ticket holdings:
– Inventory Management Software – Scalping operations use inventory management systems like TicketEvolution and TicketBank to catalog and track their ticket assets. This software allows them to see ticket quantities for each event and location.
– Spreadsheets – Simple spreadsheets and tables help smaller scalpers manually track their varying ticket supplies. They can update quantities as tickets are sold.
– Barcodes and Serial Numbers – Unique barcodes and serial numbers attached to each digital ticket allow scalpers to closely monitor the distribution and sales of specific ticket assets.
– Secure Storage – Digital tickets purchased online are securely stored in the scalper’s account with the ticket seller or resale marketplace. Hard copy tickets are kept in locked locations for safety.
– Alerts and Notifications – Scalpers set up alerts that notify them when certain ticket supplies are getting low. This helps them modify prices and manage inventories.
– Receipts and Sales Records – Detailed records of all ticket purchases and sales allow scalpers to audit their inventory levels and profits.
Managing thousands of tickets at once for high-volume events requires scalpers to operate like logistics professionals. Keeping inventory supplies and sales tightly controlled is critical to maximizing profits.
How Scalpers Set Retail Prices on Tickets
The huge markups scalpers often charge over face value tickets depend on some careful price calculations:
– Event Popularity – The most in-demand events allow scalpers to charge the highest premiums. Events with the hottest performers or teams let scalpers push prices higher.
– Supply and Demand – Scalpers weigh how many tickets they hold versus how many fans want them. Low ticket supplies coupled with high demand drives prices up.
– Market Monitoring – Scalpers follow secondary marketplaces closely to see the market value and prices other resellers charge. This informs how high they can set prices.
– Profit Margins – Scalpers consider what profit margin or percentage above their acquisition costs they want to make. Often this can be 100% or higher.
– Location and Seat Quality – Better seats or sections closer to the stage or field warrant higher prices. Obstructed views may merit lower pricing.
– Purchase Timing – As an event nears with fewer tickets available, scalpers will raise prices to capitalize on last minute demand.
– Volume Discounts – Some scalpers offer discounted prices on larger bulk ticket orders to lock in bigger sales.
Skillful scalpers are always aware of market conditions and adjust pricing on their inventory to maximize earnings as demand shifts. Underpricing tickets could lose profits while overpricing risks having unsold inventory. The key is finding the sweet spot.
How Scalpers Resell Tickets
There are several avenues scalpers use to resell event tickets at inflated prices over face value:
– Ticket Resale Marketplaces – Major sites like StubHub, VividSeats, and Ticketmaster Resale offer scalpers an online platform to list and sell event tickets. These sites take a commission on sales.
– Social Media – Facebook groups and Instagram are popular channels for scalpers to connect with buyers interested in purchasing marked up tickets. Transactions occur offline.
– eBay – The auction site provides scalpers an established marketplace to list tickets for bidding by fans. Sales fees apply.
– Ticket Broker Websites – Larger scalping firms operate their own dedicated resale websites to sell inventory directly to consumers.
– Outside Venues – Some scalpers peddle tickets curbside on the streets around event venues. This facilitates in-person cash sales.
– Contacts and Networks – Scalpers may leverage existing business contacts, client lists, and networks to offload tickets without public listings.
– Trade Shows – Industry ticket resale conventions like the Ticket Summit allow scalpers to network and sell inventory to other brokers and marketplaces.
The internet has vastly expanded scalpers’ reach, allowing them to efficiently connect with buyers and close sales through digital marketplaces. But in-person sales channels persist for last minute cash transactions.
Why Scalping is So Profitable
Several key factors make scalping a lucrative enterprise, even with the effort and risks involved:
– Huge Markups – Selling tickets for hundreds or thousands above face value leaves room for massive profit margins. Markups frequently exceed 100%.
– High Demand – Immense consumer demand for tickets to premium events like playoffs, finals, or favorite musicians guarantees sales.
– Limited Supply – Venues only have so many seats. Scarce total ticket inventory works in scalpers’ favor.
– Die-Hard Fans – Loyal, affluent fans are willing to pay almost anything to attend a big game or concert of a beloved team or artist.
– Timing – As events approach, demand rises higher while supply drops lower. This dynamic enables price spikes.
– Repeat Customers – Satisfied customers become repeat buyers willing to pay scalper rates for premium access.
– Low Costs – Scalpers incur minimal upfront costs beyond the event tickets. Reselling online has little overhead.
– Minimal Risks – Inventory that doesn’t sell can often be returned or exchanged through marketplaces for a refund.
– Cash Business – Reselling for cash makes revenues harder to track and tax. Scalpers pocket extra untaxed earnings.
Scalpers sit in the perfect position to capitalize on fans’ insatiable appetite for the best seats by squeezing the supply. Even with limitations imposed by venues and ticket sellers, the business remains highly profitable.
Negative Impacts of Scalping on Fans and Venues
Despite the financial success of scalpers, their activities cause detriments to everyday fans and even venues:
– Priced Out – Less affluent fans get priced out of events when scalpers drive secondary market prices sky high. This frustrates and disappoints fans.
– Fewer Real Fans – With more tickets going to scalpers, fewer get into the hands of genuine enthusiastic supporters of the teams or artists.
– Black Market Risks – Desperate fans shopping the black market run risks of paying for counterfeit or fake tickets with no recourse.
– Reward System – Scalpers profit from others’ hard work creating performances, teams, and events that fans are passionate about.
– Venue Damage – Venues lose control over ticket distribution and miss out on data about their customer base from scalped tickets.
– Unfair Advantages – Scalpers undermine public onsales by exploiting insider access, bots, and bulk purchasing tools unavailable to the public.
– Public Relations – Media stories about sky-high scalper pricing generate negative PR for artists and teams powerless to control secondary sales.
While scalping provides certain efficiencies in ticket distribution, the lopsided benefits in favor of scalpers come at a cost to ordinary fans, performers, teams, and venues. More controls may be necessary to create a fairer marketplace.
Anti-Scalping Laws and Restrictions
In response to some of scalping’s downsides, various laws and restrictions aim to curtail the practice:
– Price Caps – Some jurisdictions impose price caps on resold tickets. Scalpers in those areas cannot legally exceed a set percentage or dollar amount above face value.
– Ticket Limits – Venues and sellers increasingly impose lower max ticket purchase quantities to cut down on scalper bulk buying.
– Buyer Restrictions – Making tickets non-transferrable to bar reselling or requiring ID checks deter scalpers.
– Registration Requirements – Reseller registration programs allow venues to monitor major scalpers and brokers purchasing their tickets.
– Primary Sales Only – New laws in some regions now prohibit any unauthorized secondary ticket sales by non-approved resellers.
– Cancelled Tickets – Terms allowing cancellation of suspicious bulk ticket orders or confirmed scalped tickets disrupt their activities.
– Captchas – CAPTCHA tests help block scalper bots from rapidly sweeping up tickets during onsales.
– General Prohibitions – Some areas have blanket bans on ticket scalping with penalties for violations to deter the practice entirely.
– Tax Enforcement – Efforts to more closely enforce tax requirements on scalper ticket sales reduces untaxed profits.
Anti-scalping restrictions face challenges balancing consumer choice and pricing efficiency with fairness and access. But the impacts on everyday fans have put pressure on limiting extreme scalping behavior.
Ethical Considerations of Scalping
The debate over scalping also raises ethical considerations:
– Fairness – Is it ethical for scalpers to buy up scarce tickets just to profit off fans’ demand? Or is it a fair market transaction?
– Deception – Are tricks scalpers use like bots and multiple accounts to thwart ticket limits acting unethically?
– Price Gouging – At what point does reselling at above face value become unethical price gouging?
– Legality – If scalping violates no laws, does that make it ethical? Or are some laws unjust?
– Market Efficiency – Does scalping provide more optimized price discovery and distribution than regulated sales?
– Value Creation – Are scalpers adding real value through resale services or just siphoning value through speculation?
– Artists’ Interests – Are the interests of performers harmed by scalpers reducing accessibility? Or helped by additional promotion?
– Consumer Autonomy – If buyers choose to pay scalper prices voluntarily, does limiting that show insufficient respect for consumer freedom?
– Unintended Consequences – Do laws aimed at scalpers create negative unintended consequences like black markets?
There are good faith arguments on both sides of these ethical debates. Scalping exists in a gray area with evidence supporting multiple perspectives. Reasonable people can disagree on where lines should be drawn. The complexities showcase the nuances of modern ethical quandaries.
The Future of Scalping
Some possible directions for the future evolution of the ticket scalping industry include:
– Technological Arms Race – New bots and tactics will compete with shifting anti-bot protections in an endless cat-and-mouse game.
– Consolidation – Smaller scalpers will be pushed out by large scalping firms with dominant capital and software.
– Decentralized Sales – Blockchain-based platforms may arise to cut out resellers and directly connect fan buyers and sellers.
– Tightening Restrictions – Amid public demand, regulators may impose harsher limits on pricing, supplies, and reselling.
– Relaxed Regulations – Alternatively, some jurisdictions could move toward deregulation and letting the free market dictate prices.
– Mainstream Acceptance – As price gaps shrink with rising initial face values, paying above face value may gain wider acceptance.
– Direct Sales – More teams and artists may sell primary tickets directly to combat scalping rather than outsourcing to major vendors.
– Anti-Scalping Technology – Developments like digital tickets and ID checks could curb scalping, but raise privacy concerns.
– Shifting Ethics – Younger generations may see scalping simply as variable demand-based pricing rather than unethical.
In the decades ahead, scalping will likely persist but transform in response to shifting laws, technologies, business models, and attitudes. The cat-and-mouse game between speculators and regulators continues to evolve.
Conclusion
Ticket scalping is a complex and contentious phenomenon. Scalpers drive up prices for fans by snatching up scarce inventory of popular event tickets using sophisticated tools and networks. They then resell those tickets at steep markups on secondary markets to profit off demand. Their activities generate major profits but also criticism of unfair practices and exclusion of less affluent fans. Anti-scalping laws seek to constrain the worst excesses but face limitations. Ongoing debate continues around ethics, regulations, technologies, and business approaches. Despite the backlash it faces, scalping persists as a lucrative niche of capitalism by exploiting high consumer demand. Like it or not, scalpers appear poised to remain a fixture of the live event ticketing landscape for the foreseeable future.