Advance Selling for Services

Although some sellers have practiced advanced selling, the generality of its profit advantage is just now being realized. Further, recent development in technologies such as electronic tickets, smart cards, biometrics, and online prepayments now make it appropriate for nearly all services. Advance selling can improve profits for reasons very different from the traditional price discrimination explanations associated with yield management (i.e., charging the pricesensitive segments less). Essentially, advance selling can improve profits when buyers are uncertain about their future valuations of a service.