Interesting piece in Tuesday's Boston Globe about how scalpers around Fenway Park are having a tougher season than the injury-riddled Red Sox. In anti–free market Massachusetts, scalping remains mainly illegal (although there are now some licensed resellers who perform the very same service). The Red Sox currently enjoy the longest consecutive-sellout streak in Major League history, at 608 games and counting. But that streak may be in jeopardy, as are the profits of the scalpers outside the oldest Major League ballpark.
Some people blame the economy. Some blame complacence in the Sox fan base after winning the World Series twice in the past decade (after a famous 86-year championship drought). In any event, the Globe article by Robert Mays follows around a few scalpers as they have difficulty selling their tickets for a recent game. Even after the game has started, one scalper is still trying to unload seats at a 200 percent markup. Here's the (ahem) money quote:
Like many of his colleagues, he is having trouble moving the seats. To a casual onlooker, the solution seems simple. Drop the price. But when the idea is brought up, the man in the gray cotton T-shirt quickly shoots it down.
“Let me ask you something,’’ he says. “If you owned a store, and you sold milk, and all your milk was about to go bad, and everyone held out until the last minute to buy your milk, and you dropped the price, what would happen?’’
He doesn’t wait for an answer. He explains that no one would be willing to buy milk at full price. The integrity of the product would be compromised.
(That's my emphasis on the last sentence.)
Law firms are often quick to throw discounts out to clients to get the business. Maybe they figure they can make it up with extra hours later on. But what lawyers tend to forget is that discounting the price of their services compromises the integrity of the product. The discount tells the client that the legal advice or representation is worth less. (Which is why I say that discounting is worthless.)
Price your goods (legal services, illegally resold baseball tickets, etc.) carefully. But don't give in to the easy temptation of discounting. It devalues your goods in more ways than one.
What do you think? Feel like legal services differ from baseball tickets in some fundamental way? Sound off in the comments below.