Easy Concert Tix

Greg Cox asked:


Have you ever wanted to go to a sporting event or concert and after realizing the event is sold out and went into shock at how much the ticket was selling for in the secondary market? If you have been there, you are not alone. You have realized the potential profits in the ticket broker business.

On the surface it seems like an easy enough business to get into. Low barriers to entry, one can slip in and out of the market as one desires, potential for big profits - these are all true and are good reasons to become a ticket broker. Just like every other business, there are risks involved - what happens if the tickets do not sell? How do you maintain a large inventory and not loose track of everything? What are the best places to sell? What are the best tickets to buy? A few wrong decisions can become very costly.

Many would-be-entrepreneurs will simply never enter the ticket broker business. The moniker of “scalper” keeps them away. Somehow “scalper” has become equivalent to “used car salesman” or “Enron energy trader”. It has a perception as a slimy profession. Out attitude is let it stay that way. It only keeps people out of the industry. One thing that hurts the existing people in a business is when there is a flood of new entrants into the marketplace. The scalper perception keeps people out of it.

Speaking of scalping, why is this bad? How did people get the idea that all mankind has an inherent right to purchase tickets from the place of origin? In the US we have capitalism. Think back to your economics 101 class and the supply and demand lecture. Sport and entertainment tickets are a perfect example of a perfect market, which is where the price of the supply is solely affected by the demand. Prices for a Hannah Montana ticket are way more than a Foghat ticket.

When someone buys a house and resells it, we call it flipping houses. If they are good at it they get a cable TV show. How come they don’t call it house scalping? Which one really has more impact on the average Joe?

Back to the business. You are convinced that there is money to be made. The first order of business is deciding what to buy. This is not always so hard. If Madonna is announcing a tour, there will be demand. The hard part is knowing who is announcing their tours and when the tickets go on sale. This can be a time-consuming task.

Someone who knows a bit about current music has enough knowledge to know what tours are going to be popular or not. This is not rocket silence. We spend a lot more time investing in discovering what is coming up for sale than we do on the decision on whether to buy or not. This is an important point. If ticket brokering is you business, you need to spend more time deciding what event to buy and not discovering what events you can buy. More on this later.

The next part of being a ticket broker is deciding where to sell. There are many options and you keep getting new ones. Stubhub and Ebay are good starting points. Ebay you pay a bit upfront and if you have a large inventory, you need to invest in third party software to help out. Also with eBay, if you have a problem with a customer, you have to solve it. One cranky and unreasonable person can suddenly cost you 20 hours of your precious time. When you consider that, is the 15% Stubhub charges seem expensive? Does the Stubhub 15% charge sound expensive when you can sell some tickets for 25% more than Ebay?

Let’s not forget about the ticket coop site. TicketNetworkDirect and others list your ticket on hundreds of sites and charge fewer fees per ticket. FanPrice has a different system all together because they let the buyers quote a price they are willing to pay.

The reality is most ticket brokers use a combination of all these channels to sell their inventory. They choose the channel based on time to the event, time of the year and nature of the event.

A few examples:



NBA Tickets make great Christmas presents and you can get some premium prices by listing them on eBay one to three weeks before Christmas

The best price you can get on an MLB ticket is in February on Stubhub right after the tickets go on sale to the public.

If you are days away from an event, recover any cost you can from Fanprice

Never stand in front of a stadium saying “I got two”. This is the worst use of your time.



The next big item to consider is whether the seats you are about to buy are worthy of the secondary market. For a World Series game, every ticket is a good ticket. For a Madonna concert, maybe not. Top 10 rows on the floor are going to command a high dollar. Nose-bleed seats you will be lucky to get rid of. Just like in real estate - location, location, location. We do not buy a ticket for every opportunity we get to buy one, not even for the biggest events. We do our homework and figure out what is a good seat to buy in a specific stadium and what is not. Half the time, we do not buy anything because what is offered to us is not any good and we will not be able to sell.

When you start getting more and more inventory, an efficient operation becomes an important item. When you are buying fifty to one hundreds transactions a week, you cannot waste time. The time window for buying good seats is small. Presale codes are essential. Presales enable you to buy tickets before the general public. These seats are often, but not guaranteed, to be better seats.

Sounds easy enough, but how do you get all the presale codes. They come from multiple places - credit card companies, stadiums and fan clubs are just a few. Just like with trying to find out what is coming up for sale, you need a good and reliable source for presale codes. Without these lifelines, your ticket brokering business will flounder because of lack of supplies.

There is an approach to the ticket brokering business that is helpful. There are several events every year that everyone has the potential to buy tickets for. These select events enable you to make thousands of dollars on each transaction. We base out business on positioning ourselves to purchase these tickets. Our goal is to make a decent return on many events through out the year (15% - 25%) and capitalize on these high revenue events that can bring in up to an 800% return.

Being a ticket broker can be a very lucrative business. Any business comes with risks. The more you know about the industry, the more likely you are to make the correct decisions and stay profitable. It is always a good idea to learn from those who have been there. Take the lesson from their mistakes as opposed to making the same one yourself.

One also needs to find quality sources for on-sale information and presale codes since these essentially determine the quality of your supply chain.



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Greg Cox asked:


Like many of you, I am always looking for a new way to make a buck. Also like many of you, I have looked into a number of opportunities in several fields. For example, I have owned several pieces of real estate. I am currently a landlord and have been for 15 years. I see no reason to believe that I will not be for the next 15. I have bought and held onto a property for years and sold when I thought the market was right or wanted to avoid having to put $10K into it for the next tenant.

I always struggled with making a decent return on the House Flip. Buy and hold has done right by me. I find that no matter how dilapidated a house is, the owner is never so stupid to sell to me at 50 cents on the dollar. When I have been able to buy under-market, the cost of upgrades ate into my profits.

The foreclosure route was not much better. Those foreclosure auctions seem to attract enough of a crowd these days to drive up the price to near market.

Even though I have a preference for buy and hold, everyone who hears that I have invested in real estate wants to here about my experience as it relates to flipping houses.

“How many have you bought and sold this year?”

“uh.., none but I did last year and I wish I held onto it.”

“No you did the right thing. Where are you looking now? Can I get in?”

People love the flip. Everyone want to flip a house. I can even watch some cable TV shows about flipping houses. If you are a house flipper - power to you. I dislike the pressure of having to move it quickly. I like knowing I will hold onto a property for a and get a better return.

I you want to flip something, I have a better suggestion - sports and concert tickets. Half of you said to yourselves “Ticket scalping?” and the other have asked “Is that legal?”. Yes and yes are the quick answers but let’s take a closer look at the concept and the ability to make money.

Ticket scalping gets a bad rap. Somewhere it got embedded in our minds that we have an inherent right to purchase tickets for our local team or concert directly from the source. Anything that impedes that is an attack on our basic human rights. Hogwash. As an entrepreneur, you have the right to seek out markets where there is a limited supply of a product and the demand exceeds that supply. Tickets fit the bill.

Still not sold? I figured a few of you needed more. I brought up the house flipping scenario for a reason. People love the house flip. Buy under market value, slap a coat of paint on and sell over market value. The value the house flipper brings to the table is upgrading the “curb appeal”. I haven’t met a house flipper yet who wanted to upgrade the heating system. Now what do which is closer to meeting a basic need - shelter or a baseball ticket? Not even close.

Please do not read this the wrong way. I am not attacking house flippers. I love house flippers. I have done it and will do it again. But the general population loves the house flipper and loathes the ticket flipper. One serves a want and one serves a need.

Now hopefully most of you have made the mental switch that it is OK to flip tickets. Lets get down to business and talk about how some people are making money at it and why this is a good thing to look into.

Let’s start with the reasons this is a good market to jump into

Low barriers to entry - You can pick a hot concert touring the country buy some tickets for a few hundred dollars and resell them on line. It is not unheard of to get a 20 - 50% return on a deal like this if the show is popular. While you might not retire on a few hundred dollars profit, there is always someone touring that you can score some tickets to. Not a lot of industries offer an ability to get in and out so quickly without much cost.

Quick Inventory turnover - If you are buying and selling concert tickets, you might be holding your inventory for about three months on the long end. Like Sports? If you are working with sports tickets you might hold them for six months. Regardless, when you are making 20 - 50% returns in a two to six month period, the annual return is that much higher.

Many places to sell - there are several places to sell your tickets online. Each has some pros and cons. eBay of course seems to have the most volume, but you have to deal with your own shipping, listing fees and the expected eBay buyer who decides not to buy after all. Stubhub seems to be the leader of the pack in the non-eBay crowd. They have completed over 12 million transactions. The have higher fees than eBay but they include the shipping, only charge a fee when something sells and take care of all those nasty people who change their mind about buying your product. RazorGator is another place that follows the StubHub model. They just do not get as much traffic.

TicketNetwork and EventInventory each have high volume but these places cater to the full-time ticket broker instead of the person doing this on the side or a newbie. Lastly, if you want to scrape the bottom of the barrel and make extra work for yourself, you can always post your inventory on CraigsList.

Is it Legal? - While there are some restrictions in some states - every where else it is fair game. For example, If I live in New York and the venue seats more than 6,000 people, I can only mark the ticket up by 45%. If I do not live in New York, I can sell the ticket for any amount I choose.

The laws regarding this are old and are written to keep people away from selling tickets outside a stadium. In an online world they are just antiquated. There is a trend in state legislatures to ease up on these laws. With a market size $12 billion dollars, go figure that eBay and StubHub have hired some lobbyists to help ease up on the laws.

Flipping tickets is a good place for an entrepreneur to look into making some cash. At least compare to flipping houses, it has lower startup cost, higher returns and quicker turnover. Everything you want in a business.

Whether you want to dive off the deep end solo or get some help from people who have been there. That help is relatively inexpensive and provides a high value regardless of where you get it from. It is definitely cheaper than a real estate attorney.



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Greg Cox asked:


What do these have in common – used car salesperson, energy trader for Enron and ticket scalper? The answer is all three are looked down upon by our peers and society.

 

The used car salesperson has to fight the stereotype that they are always trying to sell someone a lemon. The energy trader was once viewed with respect, but now the secret is out that they did their part to de-rail parts of the economy and stuffed their pockets while everyone else is paying for it. The scalper is the guy who bought the ticket before you and is standing outside the stadium selling it to you for more. The same ticket you were going to buy yourself.

 

Whether these negative perceptions of the industry represent the reality or not, it brings up an interesting question. When you, as an entrepreneur, are considering a new business opportunity, one of the things you need to consider is how new entrants to the marketplace will affect you. You want barriers to entry to be high so not every person that comes along can start their own business and compete with you. You also want the barriers low enough so you can enter the business with your available capital and time constraints.

 

Imagine an industry where profits are high, barriers to entry are low, but people do not flood the industry because of preconceived notions against it. Would it be prudent to take a step back and really examine those notions for yourself? Ticket brokering, Ticket Scalping, Ticket Flipping, or whatever term you put on it, is this industry. Lets take a closer look at the components of it.

 

High Profits – Buying and selling tickets is a high margin endeavor. It is not unheard of to make 20%, 30%, 50% or even 300% return on your investment of certain events. There is always a good market for good seats to popular events. There are tricks to identifying what the popular events are and how to regularly find them. Once employing these tricks, one can continually make money wit limited maintenance.

 

Low Barriers – If you have a few hundred dollars you can be a broker. Nothing is free and these are about as low of barriers to entry as one can get, regardless of industry.

 

Preconceived Notions – I have bought and sold many houses. I put my time into finding them, fixing them up and selling them. Each time I do this, I put in a lot of work and capital. I get my return when I sell it. There are a couple of points of view to take on this. The first is that I am being rewarded for taking a risk and putting in my time and money. The second is one could say I am creating a false value and how dare I drive up the value of that house and make the family who eventually buys that house pay for it. I can tell you this, the vast majority of people take the first point of view and see house flipping as a person taking advantage of capitalism.

 

With real estate, we glorify the house flipper. We even give them cable TV shows. I have never been called a house scalper. Why is that? What exactly is the difference between flipping houses and flipping tickets?

 

There actually a few differences. Flipping tickets takes less capital, less time, shorter cycles and generates higher returns. Outside of these things, they are essentially the same. Buy low. Sell high.

 

Risks – No venture is without risk. The last thing you want to do is buy some tickets that you cannot use. The self-discovery can be expensive. It is a good thing there are inexpensive places to teach you insider’s tricks and well as offer presale codes and upcoming event information. Google “insiders guide ticket broker business” and you can find plenty. The break even on these types of material is reached fairly quickly. Avoid one or two bad decisions and you are there.

 

Entrepreneurs need to keep on the lookout for new ideas that others do not want to pick up or cannot pick up. Many people will always shy aware from becoming a ticket broker because they will just say “ticket scalper” and be done with it. Use this to you advantage. This is an easy industry where many people will just not enter, hence leaving more money to be made by the ones who can expand their horizons a bit.

 



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