If you need quick cash, nothing beats a couple of quick arbitrage deals. There are always people on message boards asking how to make a quick buck on the internet. Internet marketing is not a get-rich-quick scheme. Arbitrage is the exception. If you are not familiar with the term arbitrage, let me give it to you straight, buy low and sell high.
You find something in one area that is undervalued and sell it at a higher price in a different place where there is a market for the higher price. It is the most basic form of commerce. I got my first taste of arbitrage when eBay was young. It was probably 1998 or 1999. I had a bunch of stuff around the house I wanted to get rid of. I started putting things on eBay and the stuff was selling. Remember, this was early in the e-commerce days. It was thrilling watching people bid your items up at the last minute, getting really good money for something you had trouble finding a buyer for in our local area.
I was addicted for a short time. I began looking for things I could pick up cheap and sell on eBay just to fulfill my addiction. I finally cooled on my addiction when a couple of pieces didn’t move well and, if I remember right, eBay changed some of their rules and I just lost interest. Arbitrage remains a very good business model. Some people are even earning a full-time income from it and building substantial businesses just by doing arbitrage.
Let’s look at five ways people are profiting from arbitrage.
Arbitrage Method #1; Free on Craigslist sell on eBay
I guess it’s so obvious, but yet I never really thought of it until I heard someone doing it. I was listening to the Gary V. show a couple of months ago and he had a caller who said she was making decent money scanning the free listings on Craigslist and relisting them in either the paid area or on different websites.
And, by decent money I mean she was earning up to several hundred dollars on each deal. This is the neat thing about arbitrage. Not everyone wants to take the time to look for the best markets to sell their items. Many people just want the stuff out of their house or garage and aren’t interested in who gets it and if they make money on it.
The bad part of using the free listings on Craigslist is that you need to spend time driving around to pick the stuff up, finding a better market for it, sometimes storing it until you find a buyer, and then shipping it out or completing the transaction. There is a ton of labor involved. But, there is money to be made in there too.
Arbitrage Method #2; Clean out your house on eBay
I’ve used this several times in my life and made some pretty good money doing it. I’m not a big saver or collector of things. If too much stuff gets piled up, it drives me nuts and I just need to get rid of it. Before eBay came along, you had to sit on it until spring when you burned up a weekend and had a yard sale to try and get rid of the stuff.
If the items I needed to sell had a little more value, I would put a posting at the local grocery store or library bulletin board. Other than that, I might have just given it away. Then, in steps eBay.
It’s been around long enough now that we have become numb to it. If you have something to sell, you just whip it up on eBay and get rid of it. When it first came out though it revolutionized the personal sales market.
Think about it. We went from selling our used stuff to our neighbors to being able to get the top price for it by selling it all over the world. I have two very important suggestions for you when you begin selling on eBay. GET TRACKING NUMBERS for everything you are selling.
I’ve gotten burned a couple of times, once by a big eBay seller, for not providing tracking numbers. I sent the parcels by USPS Flat Rate service and threw the receipt out before copying down the tracking number. Several weeks later the company disputed the sale because I didn’t provide the tracking number. I asked them if they received it.
They said they had no idea because all of their items were in the system by tracking number. If I couldn’t provide a tracking number, then it was their position that they didn’t receive the item. The second time it was a delivery to a person’s house and he said he never received it. I guess it’s eBay’s position to have the seller prove the delivery through a tracking number.
Needless to say, “Get a tracking number!” and make sure you enter it into the correct field in the eBay sales area. The other recommendation I have for you is to keep a really good eye on your shipping costs. I like the USPS Flat Rate system. Anything you can stuff in that box is the same rate no matter where it goes in the continental U.S. The packaging is free from the post office if you use their system and once you know what box your item will fit in, you know what to quote for shipping.
Arbitrage Method #3; Retail closeouts to Amazon FBA
This is pretty cool. I heard about this one on the Side Hustle Nation podcast. People go around to different retail outlets and find items on closeout. They do a quick search on Amazon to see what the item is going for and if there is money to be made. They buy it. They buy all of them they can find.
If you aren’t familiar with Amazon FBA, this is pretty cool too. Amazon will store your items for you at their warehouses, sell them for you on their site, and then deliver them to you after the sale. They do have fees, but to do all that automated work for you is nice. You just need to find the items and send them to one of their warehouses. They have guidelines on what you can and can’t sell.
And, they have packaging guidelines also. You will have to prepackage your items so they are ready to sell. But, using the proven Amazon selling website, their reputable brand, and their delivery system is well worth the expense and the work you’ll need to go through to use their system. There a people making full-time incomes just by doing Amazon FBA arbitrage.
Arbitrage Method #4; Local garage sales to eBay or Amazon FBA if it is a collectible
Now, what about selling used stuff from garage sales on Amazon FBA or eBay? eBay is the obvious choice for this because it started as an auction site where people sold used items. But, Amazon FBA is a different story. I’ve never done it, but I did a little research. Supposedly, you can sell used stuff on Amazon if it’s listed as a collectible and is marked as used. There is a little controversy over this because people have gotten their accounts shut down by violating their guidelines.
Be sure you are careful not to violate their terms because an Amazon account can be very valuable. You don’t want to do anything to screw up your relationship with Amazon.
Arbitrage Method #5; eBay to Amazon FBA arbitrage
I’ve heard about this one before also, but have never done it. People buy stuff on eBay and then use the Amazon FBA program to resell it. eBay has become a marketplace for new items. Buying something on eBay that is undervalued and then selling it on Amazon is a pretty good way of doing business. There is nothing to store for any length of time because once you get the purchased stuff from eBay you can repackage it, label it, and then turn around and send it to Amazon the same day.
Just make sure you know your margins and your shipping costs well. I’d suggest you start a spreadsheet where you can just fill in the blanks and it calculates your profit on every item. Why stop at eBay for your items? There are a ton of discount retailers out there where you could potentially find discounted or closeout items to sell.
I do find my love for a quick arbitrage slip back now and then when I see a good deal on something. I’m not the type of person who loves running to the post office and sometimes waiting in the long lines just to mail out a sale. Call me lazy, but I prefer the electronic download or a good affiliate deal over arbitrage any day. The arbitrage model is great for quick money.
I think, if you’ve never done it before, you need to give it a try at least once to get a taste of what it is like to see quick dollar signs pop up in an eBay account.
Be Safe,
Kevin