subject: What Ebay Arbitrage Is All About? [print this page] If I can buy something for resale for $5 and then turn around and sell it for $20 I make $15 for the time and effort. That is arbitrage. The $15 gain represents an arbitrage profit. We can look at a couple of examples. So now you can understand why finding such a technique to do eBay arbitrage is so lucrative.
One Type of Arbitrage - One Good, Two Markets
What if I find the DVD of Shaft in Africa for $10 in Walmart? I happen to know that on eBay the DVD sold for between $20 and $30. I can then buy up available copies and sell them on eBay for $10-$20 per DVD. This wont remain in effect forever because some of the following could happen:
1)Walmart runs dry of this particular DVD
2)Walmart ups the price on remaining copies as they see that someone is buying a lot of them.
3)The supply of Shaft in Africa DVDs goes wild on eBay, which causes a fall in price. This particular kind of arbitrage is pretty common on eBay. Dozens of eBay Sellers go to flea markets and yard sales looking for that special collectible. The problem here is that the Seller knows the true value of what he likes and it has been priced too low.
If you find such a deal on time, you can make eBay arbitrage. You see, eBay arbitrage doesnt have to mean that you find the product on eBay and them resell it on eBay again, it could means find the product where every youd like and sell it on ebay.
They find a rare collection of Colecovision games from the yard sale. They paid $10, and turned right around and sold the games for $100. These things do not come free of costs. You dont walk into a yard sale very often and find a valuable item just lying there. You have to wake early on Saturday morning to wait in your car for the sale to begin. You, of course, have to spend time learning about what is valuable and what is not for obvious reasons. Something that happened in the past might not happen in the future so adding the financial outlay and the opportunity costs involved, we would expect the ebay arbitrage traders on this market to make the same money as they would doing other productive activities that require basically the same set of skills.
