Stubhub Case Study

Overview of Company

Stubhub is the largest ticket marketplace in the world form the sales point of view. Basically stubhub is the place where fans buy and sell tickets of sporting, concert, live entertainment events including the one which are sold out. Stubhub reinvented the market of reselling tickets in 2000. It provides a joint for buyer and seller like flea market but over the internet. Stubhub was founded by two MBA students from Stanford University. Stubhub is now acquired by EBay which was one of the competitors previously. Before stubhub was found, there were ticket scalpers who use to buy extra tickets from Fans or ticketholders, ticket brokers. They usually show up at event in last hours to sell tickets at higher price to fans looking for last minute deals. Eric Baker and Jeff Fluhr noticed this market was growing and decided to provide a marketplace for the fans to buy and sell tickets same ways. Over the time stubhub has grown very big and earning profits every year. Stubhub even has contract with NHL, NFL, NBA, MLB, and NCAA teams to sell their tickets through Stubhub.

Business Model

Stubhub was found to provide better option to buyer and seller. Its business model is very simple. People who have extra tickets or cannot go to events list their tickets on stubhub for selling. Stubhub doesn’t charge any service fee for listing tickets like its competitors. If a ticket is sold then Stubhub will send seller information about transaction. Seller will send tickets through mail to buyer. As soon as buyer confirms the delivery, Stubhub will charge the buyer’s account for the price of tickets and then will pay seller’s account as per terms. Stubhub charges commission of 15% from seller and 10% service charge