Every day I get questions by email or through the comments on my websites asking the same thing: “What is the simplest and quickest way for me to start earning at least some money online?”. Luckily, there are a few legitimate ways to do this, even if you’re a complete newbie. And one of those ways is Arbitrage.
I have done arbitrage myself as one of the first ways of making some money. It’s quick, it’s easy and doesn’t even require you to have your own website.
What Is Online Arbitrage?
Arbitrage is a pretty effective model and it involves selling something at a particular price (let’s say $20) and then buying it somewhere else at a much cheaper price (let’s say $5). Then you get to keep the difference as your profit.
The reason Arbitrage exists is because the same services and goods are sold in different countries at completely different prices. Something that a person in the US or Australia is willing to pay $50 USD for, can be bought for $5 USD in India or Belarus. Examples of those kinds of goods and services are:
- Digital portraits
- Company logos / website logos
- Printed mugs
As an example, an artist in India might be happy to spend 2 hours working on a digital portrait and get paid $5 or $10 for it. The monthly salary in India starts from $300 – $400 USD a month. So that artist can work on 3-4 portraits a day and make $15 – $40 dollars a day for their work, which will give them a monthly income of $300 – $800 a month.
Someone in the US will be more than willing to pay $20, $30 or even $50 for a high quality portrait. So if you wanted to make money with this method, your goal would be to sell at those higher prices and buy at lower prices, keeping the difference.
Where To Sell
First of all, let’s look at the places where you can find buyers who are willing to spend top dollar. One online marketplace where high quality, high price goods and services are sold is Etsy.
Let’s take “Digital Portraits” as an example. I went on Etsy and typed in “Digital Portrait” and clicked search. I get a lot of results with items selling for $50 – $150 USD. Here is one of the results that have come up:
As you can see, the seller is charging $185 AUD for it which is around $150 USD. And you can also see that there have been 216 reviews. Only about 50% of people leave reviews so my estimate is that approximately 400 items have been sold through Etsy. If we multiply, we can quickly see that total revenue for this listing has been around $60,000 USD which is not bad at all.
So now know that the “Digital Portrait” service is in demand and can be sold at really attractive prices. Let’s see what we might be able to buy them for.
Where To Buy
Now let’s see where we may be able to source some really cheap but high quality digital portraits. My marketplace of choice is Fiverr. You might have heard of it already. If not, then Fiverr became very famous several years ago because you’re able to buy almost everything there for just $5 USD.
So let’s quickly do a search for “digital portrait” at Fiverr. When I did that, I got TONS of results. And here is one of them:
As you can see, the price starts at just $5 USD for the basic portrait. And this seller has had 389 positive reviews which seem to be close to 5 stars on average. So this is quite a safe seller to order from.
There you go, we have found our very first potential service which we can “arbitrage”.
What Goods And Services To Use
There are unlimited possibilities when it comes to this method. You can literally do this with anything. Not just services but also physical goods. But just to get your creative juices flowing, here are a few suggestions:
- Printed Wall Paintings
- Digital Portraits
- Pet Portrait
- Pencil drawings
- Cartoon characters
- Website / blog logos
There are so many more… And they are easy to find. You should simply browse the marketplaces (like Etsy) and you will find so many more options. You just need to look at these two things:
- Is the item priced at over $30 USD? (this is to ensure you can make a healthy margin)
- Are there listings with over 50-100 reviews? (this is to ensure there is demand)
Which Other Websites To Use
If you feel selling on Etsy is not enough, and you’d like to sell on more websites, then here are some other suggestions:
- eBay – it has some higher price listings which makes Arbitrage very possible
And if you’d like one more website from which to source the goods from, then you can try Ali Express.
You probably already have a pretty good idea of how this model works. But just to provide a summary: you will need to set up your listing on Etsy or any other marketplace that you’d like to sell on. As part of the set up, you’d need to list your price, and put up some photos of the works you’re selling. In order to do that, you can reach out to the potential seller and ask if they’d let you use their images, since you’re going to be bringing the business to them.
After you’re done with the setup, you would simply wait for the orders to come in. Those online marketplaces already have lots of traffic searching for various goods and services. They will eventually find your listing.
You should consider pricing your services at a reasonably low price at first. That way you will be likely to get some initial orders quickly.
Depending on your goods and services, you can also find clients via other methods. For example, two profitable niches are Logos and eBook Covers. You don’t have to simply wait for an order to come through. You can proactively go out and start contacting owners of various websites and businesses that you might know and tell them about your new service.
Over to you. What did you think? Do you have any experience with Arbitrage? Do you know any other cool services to buy and sell, or perhaps some additional marketplaces?