Arbitrage is the difference between what you pay for a product and what you get. The same thing happens when buying or selling products on eBay or Amazon. There is a person, probably an online retailer or an internet marketer, who purchases an item at a lower price than he or she normally pay and then sell it on eBay or Amazon. In order to make money, the retail arbitrageur (retailer) must ensure that his or her profit from this transaction is higher than the cost of the item he bought in the first place.
This can be difficult because not every seller is going to realize this potential. After all, if he or she sells the item at a lower price than it was originally bought, is he or she still making any money? This is why retail arbitrage is so important to the online seller. By understanding how the auction process works, one can take advantage of the opportunity to profit off the retail price of an item.
Some people theorize that eBay and Amazon have artificially driven up the prices of certain items. Others think that this phenomenon is due to supply and demand. However, there are a number of ways to distinguish between legitimate retail arbitrage opportunities and those that are not. Here are some common ways that arbitrage is mischaracterized:
o sells the same item twice. If an online seller is selling the same item twice, he or she is probably doing retail arbitrage. This is a great way for someone to earn extra money by selling items at two different prices. By choosing to sell the second item at a higher price, the buyer will likely make his or her initial purchase at a lower price.
o Sell a vintage item. There are plenty of vintage stores online that have very unique items that never made it to their original retail price. These sellers often stand by their products and do not mind passing the savings along to their customers. However, you will need to contact the store to find out if they actually carry the product or if you can get it directly from the manufacturer. If you can get the item directly from the manufacturer, you will save a lot of money on the retail price.
o Sell refurbished items. Many companies only sell a product through a middleman such as an auction website and do not have physical products available to sell to end users. For these companies, the cost of maintaining the websites and storage costs is much lower than the cost of maintaining a physical product on the market. Thus, the company does not have to charge the same rate for retail as it would for wholesale. If you can find a company that is providing both wholesale and retail arbitrage opportunities, this could be a great way to get a good bargain on an item and get it to sell for more than it cost to buy from a retailer.
o Sell expired listings. eBay and Amazon offer the opportunity to list an item that is no longer available for sale with a “expires” update. When people sign up with these sites, they often buy a product when it is no longer available and then have to wait to purchase it when it becomes available again. arbitrage between eBay and Amazon allows you to offer this type of arbitrage opportunity to your customers so that they will be able to purchase the item at a discounted rate when it becomes available again.
The price accuracy that you see with an Amazon and eBay price comparison is not accurate and should not be used as the sole basis for making a decision. If you find a price difference, you should consider the fact that there may be other sources for the same product. You should make sure that you are getting an accurate “buy it now” price for the item. By using Amazon or eBay, you are not only saving yourself time, but you are also saving the buyer money by providing them with accurate price comparisons.