Arbitrage is a practice of taking advantage of price difference between two or more markets. The imbalance of prices between the multiple markets will create a profit when you capitalize between them. Two products that can be found consists of physical products and digital/service products. The system is great because it provides a model that can be done with very low initial start up cost or financial investments. Since transactions are all done online, this allows your business to diversify into multiple countries and advertise to a board audience or concentrate efforts on a single market.
These products are a commodity, or a physical, tangible item that satisfies humans wants and needs, or an item that is useful or desirable which sells to businesses and consumers. These items do not contain things such as ideas or services.
Example of physical items: Iphones, Shampoo, Books, kitchen appliances, clothing, shoes, electronics, jewelry, food and cars.
B2B (Business to Business):
Example: A lead company can find a set price which obtains 500 shirts per month. The company will find a shirt supplier that is willing to sell the 500 shirts for that set price with 20% reduction. You can earn 20% commission when the two businesses partner together as a joint-venture and will sustain a monthly recurring income.
B2C (Business to Consumer):
Example: One of the most popular method of Business to Consumer market is drop-shipping because it is implements all over the world successfully. Drop-shipping delivers the ordered product bought from the supplier to the client. With this tool, you can build your own online marketplace where you can sell your product at a specific price point. The key to to this model is purely marketing with the goal to gain a potential price point. Since its an online market you can leverage it as well.
Digital products are intangible which means it is a “good” that does not have a physical nature. These tems such as downloadable music, mobile apps or virtual goods used in virtual economies are all examples of intangible goods, and is are also easy to track. The products do not require physical shipment which creates a simpler process.
Examples of digital products: Music downloads, Videos, online blog, online newspaper, ebook, education, and electronically stored traveling tickets.
SEOClerks and Fiverr:
SEOClerk.com can find micro jobs for roughly $1 and can be sold on another website, Fiverr.com, for $5. Fiverr is used to find people to create designs or portraits for $5.
SEOClerks for example could sell its service for view clicks on youtube. Through SEOClerks clients could provide youtube services that allow users to sell views. This site offers views up to 1000 with a price range under $10.
eBay and Amazon:
Ebay and Amazon offers sections that allows users to view the best selling products on the market. This is where you can find the best products that are trending on the market currently. You can track a products sells activity along with other competitors prices. This will find a product that best suits your business with the best profit margins.
- Start with a low price product so it can sell fast so allows good reputation and more relibabily This creats an competitive advantage but increases your seller limits.
- Be sure that you can obtain a margin of at least 40% for maximum profits
- Its important to check your rating and status, to maintain a “Top Seller Status” Again this is to create a good reputation so online consumers will chose your product over a competitor
- eBay allows special requests for sellers increase when sales are going well with a sellers limit
- Title Builder is also a great tool to use when marketing online. This application helps find key words to best match the product you are selling. Using the right key words can make it easier for potential clients to see your advertisement