StubHub’s All-In Pricing Structure Is A Killer For Sellers, Great For Buyers

This is not an advertisement. In fact, this is a formal complaint if anything.

I’m a longtime advocate of StubHub.  When it comes to buying tickets, the StubHub service is super user-friendly, easy to use, simple, etc.  I’ve never had a problem with fake tickets either.  And when it comes to selling tickets, StubHub has been good to me.  It’s just as easy to sell tickets as it is to buy.  I’ve made some nice pocket change over the years flipping tickets for all kinds of events (shout out One Direction)

For the past 5 years or so, the way StubHub has worked is the prices you’ve seen for tickets did not include fees.  So if the ticket prices listed were $100/ticket, you’d end up paying something like $115.  And the $100 was how much the seller would take home.  Essentially, the buyer was always paying more than what StubHub was showing at face value (no pun intended).

Today, StubHub offers an “all-in” pricing structure where the ticket prices listed under an event are exactly what the customer pays.  If the price/ticket is $100, the buyer is paying $100, but the seller is taking home $90.  The listed rates include all fees so that it’s 100% clear exactly what the buyer is paying.  If you’re the buyer, what more can you ask for?  No hidden fees, no buyer’s remorse, nothing.

Here’s the problem.  The seller wants to make as much as possible on a sale.  With the all-in structure, the prices that the buyers are seeing are now higher than usual because they include the fees.  So if I want to make $100 on a ticket, now I have to list it at $110 whereas I used to be able to list it at $100.  While the transparency works in the buyer’s favor (because they know exactly what they’re spending), the higher prices are a detriment to the seller.

Confused?

Before this all-in structure, if the cheapest tickets for a football game were all in the $100 range, that’s what that seller would be seeing, and that’s what the seller would be making.  But now if those same sellers still want to make $100/ticket, the listings will all be in the $110 range.  The tickets now appear more expensive.  What this does, based on perception, is drive demand down.  Buyers are more turned off, and sellers are forced to drop prices and thus make less money.  And I’m dissatisfied.  For any fellow ticket-flippers, keep this in mind.

Maybe I’m just upset because I took a loss on tickets for the first time.  But I think I nailed this economics lesson.

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