If are not already familiar with eBay arbitrage, it is the art of purchasing an item on eBay and then reselling it on eBay. Arbitrage has been used in the financial and securities markets for decades. For eBay sellers, it represents enormous opportunity for profit and minimal inventory overhead if you know how to make it happen.
Look at it this way: In any marketplace where a difference in product pricing exists, there is an arbitrage opportunity. It allows a savvy seller to buy a marketable product from an inexperienced or careless seller at a low price and then sell it professionally and skillfully for a larger profit.
On eBay, taking advantage of misspelled titles and inadequate descriptions is the most common form of arbitrage. However, that is really just the beginning for an industrious seller who knows how to seek out golden money making opportunities.
Every day, sellers list items on eBay in the wrong category, include misspelled titles or poorly written item descriptions. Since the average eBay buyer enters keywords in the search box to find an item, these badly listed auctions are hidden from the majority of buyers. Therefore, there are literally thousands of badly listed auctions that present arbitrage opportunity for diligent sellers.
Misspelled titles and descriptions – Taking advantage of misspelled titles is probably the most well known and popular type of arbitrage on eBay. Most sellers have no idea how critical it is to get the title right. In reality, it makes or breaks the successful outcome of the auction. On the search page, the default (which over 80% of buyers solely use) only searches titles and NOT descriptions. A buyer must make a conscious effort to check the box that enables the advanced search – most do not simply because they don’t want to have to sift through the hundreds of search returns. They want only the most relevant matches. Therefore, listings with spelling errors in the title are a lost cause. Obviously, if a listing rarely gets displayed in the search, it limits the number of buyers that know about that item, and as such the final selling price is much lower than it should be.
Cross Auction Arbitrage – Cross auction arbitrage simply means that you purchase items on another auction site and resell it on eBay for a nice profit. Poorly listed auctions do not just exist on eBay. There are other auction sites, as well as collector sites and ecommerce sites that offer these same opportunities. Since these other sites don’t receive the traffic and bidder interest that eBay does, there is a promising prospect to buy low and then resell on eBay for a higher dollar amount.
Positioning – Every single day, eBay sellers list their items in appropriate categories. These are ripe for the picking for an astute arbitrage seeker. Buyers generally look within specific markets to find what they are looking for. However, as a seller you determine the market, and open up the marketing opportunities for an item. It is here that you can find opportunity to capitalize on markets that others may not consider. For example, an old general store sign would most likely be listed in the Signage category. However, retro is in right now and listing it in the Home Décor section may open up the item to a whole new market of potential buyers. In this form of arbitrage, you are the middle man – buying the sign as a collectible and then relisting it as a work of art for a modern, eclectic home.
Just remember to list the item in the most appropriate category using targeted keywords and description phrasing that will appeal to your NEW market and not the collectibles market.