Did you know that eBay is another great source of product for your eBay business?

Ever heard of eBay Arbitrage? If not, you should get familiar with it. Arbitrage has been used in financial markets for a long time. It’s the act of taking advantage of lower priced deals and marketing the same thing in a creative way at a higher price, thus making a good profit.

This is happening now on eBay, everyday. People will troll the site for something that is very popular at that moment but marketed poorly by certain sellers. When I say marketed poorly I mean that tiles are misspelled, titles are very short and not driving traffic to the auction, no photos of the item are included, the description is less than semi-professional, etc… The “trolls” buy the item and flip it on eBay for a substantially higher price.

I once found a niche that I could exploit using eBay arbitrage. I tapped into a hobby that is popular among teens. It was easy finding auctions with terrible, misspelled titles. The attention to detail just is not there with some of these sellers.

The best opportunities are in hot items or fads. Examples would be the recent Elmo doll craze or the limited supplies of the Wii and Playstation 3. You could also buy lots of items, split them up and resell at a much higher price.

Common Seller Mistakes that Help Arbitrage

Those who make a living doing eBay arbitrage are keen enough to exploit the mistakes other eBay sellers have made.

Misspellings account for a huge majority of arbitrage opportunities. When customers search on eBay they input keywords into the default search engine on the main page, (not the advanced search that eBay offers), and since the default search looks only for matching titles, those listings that are misspelled get much less traffic. If the original seller simply spell checked their work or consulted a dictionary they could have sold their item at a much higher price: more people viewing and bidding on an item can kick in a much more aggressive bidding war, thereby increasing the seller’s financial gain.

This means a savvy buyer searching out misspelled auction titles can get the item at a much lower price then turn around and sell it on eBay again—but with a correctly spelled title of course!

Do you realize how important the correct listing categories are to successful auctions?

Simply knowing how to market an item is not enough; it takes a bit of creativity and finesse. A seller’s job is to get a feel for current trends and approach them appropriately.

Let’s say someone has an old-school Fraggle Rock lunch box and it’s listed under eBay’s “Fan Shop” category. An astute arbitrager finds it and realizes it may do much better if it’s marketed under “Collectibles” because she or he knows the sentimental value of such an object. They may also realize how rare those lunch boxes are, so putting it in the Collectibles category makes more sense.

Really exploring and considering the proper markets can generate much more income. That same lunch box could also do well under the “Entertainment Memorabilia” category. By cross marketing you have opened the item up to potentially thousands of other buyers and you can reap the benefits of a bidding war. In a nutshell, if you come across an auction that seems sloppy or out-of-place, it may be a good target for eBay Arbitrage.

Buying from one online store and selling it on eBay…

…is not out of the realm of possibility because that old-school metal lunch box isn’t just at yard sales anymore! The Internet has lots of other auction sites as well as stores and collector sites that have great stuff. But, few people see them because eBay is the auction site most used by the public.

Buying stuff on another auction site then reselling it on eBay is called cross auction arbitrage and it’s a powerful way to increase your profit margin (if you know where to look). Stick with any general auction sites that you can find. More specialized collector sites are probably frequented by experienced, intense collectors so deals will be harder to come by. Try it with some of my examples above or use some of these resources to find your own hot niche!

Learn more about eBay Arbitrage by clicking here.

Filed under: eBay

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