Joe’s Gas Station is having a sale, and he’s dying to get in on it. Unfortunately, for Joe, the gas station isn’t a very big operation. Unlike other places, Joe’s Gas Station doesn’t have the option of using high-cost advertising to attract new customers. Since people are used to seeing their Gas Stations listed on TV and in magazines, they’re not going to go into Joe’s Gas Station if they don’t know it’s there. So Joe’s Gas Station is forced to sit back and wait for customers to stumble across its location on the side of the road, hoping someone will notice it and ask if they can buy a can of soda.
So what does the retail arbitrage trades have to do with gas stations? Everything! High-end restaurants and cafes, and even roadside diners depend on retail arbitrage to keep their businesses viable. Here are some examples…
– A roadside eatery in town – Any aspiring restaurateur will tell you that location is one of the most important factors in getting customers to stop and eat. If the place is too far away, no one will bother to go there. If the place is too close, no one would bother to go there either. Either scenario could result in lost revenue. Arbitrage traders know exactly how far away each gas station is in town. They then use this knowledge to haggle over the price between the two gas stations, knowing exactly what price to charge so that they’ll still make money at the end of the day.
– A restaurant in town – If you’re lucky enough to own a restaurant, then you know that part of the fun of owning a restaurant is serving the best meals for the best prices. If the restaurant doesn’t provide quality service and sustenance in those areas, no one will bother to go there. Arbitrage merchants know exactly what kinds of restaurants to target in town. They will go to restaurants that have good food and excellent service and hope to make a nice profit off of them at the end of the day.
– An electronic device – Every day, some new electronic device comes out on the market. One of the hottest selling items is the digital coffee pod machine. These machines are incredibly convenient and make getting coffee fast and easy. In addition, they’re a great Arbitrage opportunity. If someone wants an electronic device and gas station are both within driving range, it’s usually worth going for the deal to make money off of both items at the same time.
– A retail gas station in town – Every town has at least one gas station, which provides convenience for people who don’t want to waste time getting fuel up to a gas station. People who work from home or who just want to be in the comfort of their home can get fuel up to their tank very easily. If you’re a good Arbitrage Trader, you should consider purchasing a gas station. You can turn around and resell it or just let it sit and reap the benefits of having a gas station in town.
– Another product – With Joe’s latest product, he needs to make some money. So instead of just waiting for the demand for coffee to build up again, he decides to build another product line. What product will he sell this time? It’s almost impossible to predict what will sell, but Joe knows that gas station and retail gas stations usually do well. He figures he’ll sell sandwiches at the grocery store, take out the garbage at the local dump, and sell gas to people standing in line at the gas station. Pretty soon, Joe’s new product line is going to be a huge success.
If you’re looking to become a retail arbitrage investor, Joe’s story may be about something you’d like to follow. Many investors find that having a mentor is one of the most important things they can do to help them earn extra income. But if you have no one to follow-and especially if you’re not good at following people and being able to keep up with their trends-then retail arbitrage can be pretty rough to break into. With Joe’s example, though, it showed us that it’s possible to make a lot of money retailing gas and other items even if you don’t know a lot about retailing and don’t have much of a background in the gas industry.
