What is arbitration?
Simply put, arbitrage is the purchase of an item in one market for immediate sale in another market in order to profit from a discrepancy in price between those markets.
Arbitrage is a term most commonly used in the world’s financial and stock markets where, for example, traders seek and take advantage of differences in currency prices between the currency markets of different countries.
In any situation where there is a difference in the price of a product, service, or item, an arbitrage opportunity presents itself because it allows you to buy at the lower price and sell at the higher price, making a profit in between.
ebay arbitrage
So what does arbitrage have to do with eBay, and how can you apply the concept to make a profit?
Every day, sellers post items on eBay in inappropriate categories or with misspelled, incorrect, or misspelled titles and descriptions. Due to the way most people search for items on eBay (by entering keywords in the search box), these poorly listed auctions are hidden from the vast majority of buyers.
Given the sheer volume of auctions that are listed and running at any one time, these mis-listed auctions are a constant source of potential arbitrage opportunities.
Let’s take a look at the different types of arbitrage opportunities on eBay…
Misspelled titles and descriptions
Taking advantage of misspelled titles and descriptions is probably the best known and most popular type of arbitrage on eBay. These opportunities exist simply because people don’t realize how important your auction title is to the success of your listing.
As we mentioned earlier, most people search for an item by entering keywords into the search box on eBay’s home page. What most sellers don’t realize is that eBay by default only looks for the auction title and not the auction description as well. To search for the description of the auction, as well as the title, the user must use the “advanced search” option and check “search title and description”.
Very few people are aware of this “feature” and even fewer take the time to use it.
To give you an example, searching only titles for the keyword “Playstation 2” today returns 10576 items, but searching for “playstation 2” in titles and descriptions returns 59879 items.
This is not to say that there are nearly 49,000 “playstation 2” arbitrage opportunities, as a large proportion of these will be genuine items that just don’t have PlayStation 2 in the title, but it does prove that these opportunities exist and are there. waiting to be found.
It really is just a matter of common sense and simple math; If a listing rarely shows because the keywords in the title are misspelled, then you’re simply not going to get many bids. The lower the number of bids, the lower the final price of the item!
So how do you use this information to your advantage and benefit? Simply search the listings for items with misspelled keywords in the title.
An easy way to do this is to use a free search engine designed to highlight these arbitrage opportunities, such as http://www.ebooboos.com, but you can easily search the listings yourself for misspellings. http://www.searchspell.com/typo/ is a free website that will generate misspellings for you based on the keywords you enter. For example, entering “playstation” gave me the following misspellings;
playstation, playstation, pray station, paystation, plystation, plastation, playtation, playstation, playsttion, playstaion, playstatin, pleighstatiom, preighstatiom, pleighstation, pleighstaton, preighstation, preighstaton, pleighstashon, preighstashon, pleighstashun, preighstashun, pleighstasion, preighstasion, praystasion, playstaton, playstashun, playstashon, Praystation, Praystaton, Praystashun, Praystashon, Playstasion, Pleighstachun, Praystachun, Preighstachun, Playstachon, Pleighstachon, Praystachon, Preighstachon, Playstachun, Playstation1on, Playstation, Playstation,1on, Playstatino Playstation, Playtsation, Plasytation, Plyastation, playstation, lpaystation, playstation, laystation
ok some of these are going to be very out of place (pleighstashon for example) but these will give you a good place to start.
You don’t have to search for each misspelling at once, eBay allows you to use a sort of logical OR functionality in your searches by entering your keywords in parentheses separated by commas, for example;
(playstation, paystation, plystation, plastation)
The only limitation here is that you must limit your entire search query to 300 characters.
Once you’ve found a potential arbitrage opportunity, your next step is to research the typical final sale price of equivalent but correctly spelled items on eBay.
To do this, you must search closed auctions for the exact same item as your potential arbitrage opportunity. Just click “advanced search” from any screen, enter your description, and check “full listings only.” Checking this box will only show listings that have already ended, allowing you to research completed auction prices for your item.
It’s important not to search for the exact same title when searching for full prices, especially if the item has something like a model or serial number in the title, just look for the most obvious search phrase.
(If you find you’re getting irrelevant results, simply use negatives in the search box to search for items that don’t contain the word, eg “playstation 2 controller” to find all listings containing the keyword “playstation 2” in the title but not the keyword “controller”)
When looking at finished items, it makes sense to ignore closed auctions where the final sale price is significantly higher than the others. It’s tempting to focus on these points, but they’re exceptions and not the norm, so be sure to look at what the typical final sale price is and base your potential final sale price on that.
You should always factor shipping costs into the item’s final sale price. A $20 item with $5 shipping is essentially the same price as a $5 item with $20 shipping, so when researching your potential final sale price, you should consider both figures.
Assuming you find equivalent items that sold on eBay for a high enough price to make a profit, you’re in business. The only thing left to do is decide how much you’re willing to pay for the misspelled article, including shipping, and then make your offer.
So the next question is when to make the offer.
If there are no other bids on the item you must immediately bid the minimum amount, if there are already bids on the item then you must either wait until near the end of the auction to place your bid or use a sniper tool to bid. the last seconds of the auction.
Why should I bid on the item if there are no existing bids? Simple. eBay only allows sellers to review their items if there are no existing offers. If the seller realizes that he has misspelled a critical word in his auction and there are no bids, then he can revise his listing and the arbitrage opportunity is lost. Bidding means the seller is blocked from the auction.
This type of arbitrage is a numbers game: some you will win, some you will lose. There are a lot of people looking for things like “playstaton”, “pearl neklace” or “camra”.
Cross Auction Arbitrage
Cross auction arbitrage is simple; Just search for items on eBay that you can sell on other auction sites (or on any Internet site that allows you to sell items).
For example, many computer games sell on eBay for less than their used equivalents sell on Amazon.com. The secret to success here is to bid on a lot of items (once you’ve researched their prices on Amazon), you’ll lose most, but the few you win will net you a nice profit.
Books are another potential cross-auction arbitrage opportunity between eBay and Amazon.
positioning
To explain how positioning as an arbitrage strategy works, you need to understand the mindset of buyers and sellers on eBay.
When people are interested in buying or selling a particular item, they stay within their own specific market. For example, if you were an antiques collector, you would browse the “collectibles” categories looking for items to buy, and likewise, if you were a collectibles seller, you would list your items in the same category.
But as a seller, there are other markets potentially open to you that many people just don’t think to capitalize on.
To continue the collectibles example, there are people who may be more interested in the specific theme of the item than their specific collectibles. Take vintage posters, aside from their potential value to a collector, these posters may be of even greater value to someone looking for something nice to hang on their wall!
All that’s left is for you to be in the middle of purchasing the items as collectibles and relisting them as art objects!
The secret here is to list the item in the most appropriate category using keywords and phrases that appeal to your new market, not the current market.
favorite searches
Hardly anyone on eBay uses the favorite searches feature, but for those of us interested in finding arbitrage opportunities, it’s a potential gold mine.
When you search eBay using keywords (the way most people search) and hit the search button, you’ll be presented with a link in the top right of your results labeled “add to favorite searches”. When you click this link, you will be taken to the “add to my favorite searches” page, which allows you to save this search for future use.
Now here’s where it gets interesting: check the “email me every day” box and you’ll receive an email from eBay highlighting potential arbitrage opportunities when they’re listed – you don’t even need to search!
Conclusion
We hope this article has given you an idea of the many arbitrage opportunities that exist on eBay. For more free tips, ideas, and strategies for selling successfully on eBay, visit us at [http://www.learn-to-sell-on-ebay.com]
