Online Arbitrage For Beginners: What Is Arbitrage & How We Take Advantage? (Part 1)
Hello, this is Kev from LifeSuccessEngineer.com! Today, I’m going right back to basics about online arbitrage!
Watch the video below:
I’m going to use this to start an online arbitrage training series where I’m going to show you how I used this model to transform my life. I went from zero to 30,000 within six months. I quit my job, and this has transformed my life.
Back to basics!
What is arbitrage?
It sounds and looks quite complicated, but it’s fundamentally very simple. All it means is you are taking a product, you are going to then purchase a product so it is now yours, and then you’re going to sell that product in a different marketplace for more money.
The difference in that is profit, and that’s what arbitrage is!
For example, if you walk into two stores, you could see the same product in both stores but charged at different prices! That is exactly what arbitrage is. It’s the difference in price in marketplaces.
You’ve basically got two different models, but they are also essentially the same.
You’ve got retail and online. With retail, you are physically going into a store. With online, you’re basically doing the same thing, it’s just online.
How can I benefit from arbitrage?
Well, what we can now do is take advantage of two different marketplaces. So you can purchase a product from one of the two stores in my example that is selling the product at a cheaper price, then you can take advantage of companies such as Amazon, eBay, or Shopify.
Products on Amazon for example, could be selling for double the price.
Why would that happen?
Why would somebody pay double the price for something when they could just get it there?
Well, let’s think about this. When you think about yourself as the consumer, is the price fundamentally what makes your decision?
You’ll find that, for example, if you can’t get it at this price or it’s sold out, you go to Amazon and find that product somewhere else. Then, you may find it on Amazon – the biggest retailer in the world – and even if you see a higher price, you will get it because it’s sold out elsewhere.
Believe it or not, people go to Amazon because they are the first company they think about, even if a store has a 50% off sale on the product they’re looking to buy. That’s exactly what arbitrage is.
How can I take advantage of this?
Amazon have an amazing programme called Prime. What you can do is sign up to Prime and you can get products the next day! What Prime means is the Fulfillment by Amazon programme, so you can purchase a product, send it to Amazon, they will store your product and when it sells, Amazon then literally pick your product up and send it to the customer.
Do keep in mind that there will be a fee you’ll have to pay to Amazon for using this service. It’s usually about 30%, depending on the size, weight and cost of the product!
Your profit and your return on investment may seem small, but think about how much you could be making if you were selling hundreds or even thousands of products!
I will keep this series on online arbitrage going if you enjoy it, so please let me know if you’ve liked it!
If you have any questions about online arbitrage, let me know in the comments! 🙂
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