Making Quick Cash Online And Offline With Arbitrage - ShoeMoney


Making Quick Cash Online And Offline With Arbitrage

by Jeremy Schoemaker on August 7, 2007 · 77 comments

money pickSo last week I said there was no way to get rich overnight and really there isnt well there is but to be honest that could be one of the worst things to happen to you. Why? Cause you dont know how to do it again. So lets look at some easy things to start. I am going to take you back to my roots when I had a day job. This is how I started doing my own thing way before I ever even had a website. I still do it -

Arbitrage is the cool new word now in with all these kids making bank with search engine arbitrage but you know there are other forms of arbitrage that have nothing to do with search engine marketing but everyone sitting @ home RIGHT NOW can take advantage of?

I watch slick deals every day. One day 2 months ago I saw this deal for 500GB external hard drives from dell.com for $97. I purchased 25 of these. I would have purchased more but my dell rep said you could only get 25. I sold 22 of them locally for $140 on the Lincoln Nebraska Craigslist. The last 3 I sold on eBay for between 99 and 119 + shipping on eBay (just dumping the extras).

Did I get rich off of this deal? Hell no……. I was however able to turn $2500 into $3500 in less then 10 days. AND the best part is I put in less then 2 hours work total of my own time and then about 4 hours of my assistants time who I was already paying regardless of what they are doing.

So how did I know what to buy? Well in this instance it was pretty easy. I looked at what these items have sold for on eBay then also compare the price to my local bestbuy (selling point for craigslist).

The thing is I REALLY LOVE finding ways to make money. The amount is really irrelevant. Its a fun game for me. I love finding market imbalances and exploiting those.

So I know some out there are already coming up with reasons why they cant do this.

1) Shoemoney I dont have $2500 to test this on wah wah wah

Ok fair but you probably have 100? Then you take the profits and keep going. Thats how I started.

2) Shoemoney I live in a small city and Craigslist doesnt get any traffic wah wah wah

ORLY? its smaller then Lincoln Nebraska?

3) Shoemoney I dont have the time it takes for this?

Plz just quit now u fail.

Seriously this is so easy

 

This is one example I will show you another tomorrow.

full disclosure

About the author...

– who has written 2895 posts on ShoeMoney.com.

Jeremy "ShoeMoney" Schoemaker is the founder & CEO of the ShoeMoney Blog, Elite Retreat Internet Conference, & the PAR Program. In 2013 Jeremy released his #1 Amazon Best selling Autobiography titled "Nothing's Changed But My Change" - The ShoeMoney Story. Jeremy currently lives in Lincoln Nebraska with his wife and 2 daughters.


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{ 67 comments }

1 Joe

I love reading these kind of posts. It’s amazing how many small things out there like this people can do to make a few bucks.

But I bet it would have made it easier if you had used Omaha’s craigslist combined with Lincoln’s. =p (I’m from Omaha) That’s like 1.2m people total in those two cities.

2 Kiley

HOT DOG!!!
Finally someone else like me. I look at everything as a potential profit. One of the days that I really make killing off of is Black Friday, EVERY YEAR.

Great post, Jeremy!

3 Adamz

Shoe,

Good topic, as Arbitrage can be done with almost any item that can be bought cheap and sold higher yet below the retail value. Hence the added value to the buyer is getting the item below retail..True arbitrage is having it sold before you ever buy the item(s). I have done lots of real estate arbitrage basically find property, informally get the home owner to agree to my price & terms and than sell the house to a new buyer for a profit before I ever close on the property with the original owner (seller). Basically with homes in forclosure..works best as you got money so you make the rules of engagement..

Arbitrage:

The simultaneous purchase and sale of an asset in order to profit from a difference in the price. This usually takes place on different exchanges or marketplaces.
Also known as a “riskless profit”.

4 Deron Sizemore

That’s great Shoe! This is the type of thing that really gets me going. Two hours worth of work for a grand profit. There is money to be made everywhere if you think outside the box, and you sir, definitely think outside the box.

5 Ian

I think you are underestimating the time it took you total to sell the hard drives. There is no way your total time invested was 2 hours. Did you meet the people on craigslist somewhere? Factor in the travel time there and back to your home. How about gas money? What about time answering the emails? Have any no shows for the exchange? etc…

It’s a good idea, and I’ve done it. I sold a 360 for $675 that I bought for $525. I’ve also sold video cards for $40 that I bought for $4. But it is work.

6 Ginene

My co-worker’s boyfriend buys sneakers on sale when there is a buy one get one half price or buy one get one free. He normally buys about 20. Then he sell them on ebay and makes a profit of about $20 or more for each shoe. He has been doing it so long that this all he does for a living. I need to take the time out and do a 101 ebay course and start selling.

7 Dave

Yeah I tried this game sometimes, often happen that people don’t see the value of what they own so you can buy stuff from these people for cheap and sell it for much more on ebay :)

8 Adamz

Shoe,

Google pisses me off, with all this crap about arbitrage on google in the ringtone vertical. It should absolutly not be called arbitrage. I see it as simply investing or buying clicks. Just because the potential for profit exisists between the cpc and epc does not classify it as arbitrage..Arbitrage is riskless profit.. Google once converted in the ringtone space at a lower cpc yes but has always been risky.. I think google should call what some of us do, media investment placements. Arbitrage indeed” Google, just makin shit up again! to justify higher cpc rates..They take the profit out of every vertical by useing the reporting tools they offer us free to hurt our businesses, of course only after we teach them how to make money!Why we have shorter revenue cycles on some hot verticals.

9 Paul Bradish

Shoe, this is a great idea. I love to study market imbalances and find them fascinating as well.

As a kid, I collected old comic books from antique stores and garage sales. I never cared to read them but was able to turn around and sell them to collectors for decent profit. Mind you I was about 13 at the time. I’m not sure if there is still a market for that sort of thing.

10 Blogging Experiment

Arb is a beautiful beautiful thing. It is definitely time consuming and there are some lessons to learn but like you said, you can practically bootstrap your entire operation and you make money quicker than anything else I’ve tried.

11 Blackbeard

Shoe, if you had been alive 1,000 years ago, you probably would have been a traveling merchant, buying things in one city only to sell them for much more in a city elsewhere.

12 Leonid Shalimov

I really need to use slick deals more often, that’s freakin awesome. :)

13 jeremy

Arbitrage! I never knew what to call it, and now I shiver with anticipation for your next post.

14 Jack

I did this to pay my way through college. I would go on Ebay and check all the new listings for lower-than-market BUY IT NOW items. If I could make at least a 50% profit selling them, I’d buy and resell it back on Ebay. Of course, do what you know. For me it was music equipment and electronics.

15 andrew

True arbitrage is 0 risk as you sell before you ever have it in your possession. Buying and then reselling is exactly that, reselling. The only difference here is that you are buying from a reseller to resell.

These are good opportunities, and should be exploited asap when they arrive, before the gap closes.

16 Gecko Tales

It’s smart to start small, like $100. That way if it doesn’t work you haven’t blown your load too early. I think it’s best to invest a little at a time and learn what works. Once you have a workable plan you can do more. I’m building up all the time so eventually I can buy a food franchise. I would love to own a Zaxbys. I would eat the chicken fingers all day long. Fat and Happy.

17 matt

I used to do something similar. My wife used to work at a clothing retailer that would occasionally have great sales — They’d take everything already marked down on sale and say “half off everything on sale”

I’d find things like shoes marked down to 10 or 20 bucks and pay only 5 or 10 for those. Then I’d turn around and put them on ebay. I’d do the same for jeans, belts, shoes, etc — I didn’t make big money but it was an easy way to make a little extra cash.

18 SonicReducer

I started doing this same thing and made decent money. It just got to be too much dealing with physical inventory and shipping. Which is what I absolutely love about the affiliate game, no customers and no inventory. I’m shocked that you still do this stuff, as busy as you are.

19 CPA Affiliates

Imbalances are the way to go…. I remember back in my college dayts i would earn extra funds as the local walmart would ahve insane clearances on techie stuff… well they had it on the voice recorder addon for palm i think i paid 5 bucks for each, I bought them out i think it was like 15 of them and sold them all on ebay for 45 to 75. Needless to say me and my friends had fun the next weekend :)

20 Glen Allsopp

I like buying ebay sites then flipping them on webmaster forums. Another good way to use market imbalances

21 Cristián

Market imbalances is what makes earning money easy. Last year I was getting 100% profit importing anime toys from China until some people figured where I was buying from and now there are like 10 stores competing with each other, but of course I don’t complain because, as you say, it was a sort of a hobby for me and I got big bucks with little to no work.

BTW, does your dad fish with dynamite too?

22 Nathan H

Great idea, its just hard to beleive that enough people wanted 500 GB hard drives.

I wish dell came around with that offer again :)

23 Dave

Great article Shoe. I just wrote a similar one where I talk about how to find deals like this ON Craigslist, and then just throwing them item back on there to make money. It’s how my friend makes around $10k a year just buying/selling one product on CL.

24 king jacob

I think you should just start selling.

25 king jacob

Dude, you can arbitrage with anything. If you look you’ll find tons of products that large companies sell at a loss inorder to draw you into buying something else.

26 Mark Hankins

The Spaniards took advantage of gold they took from the civilizations of the New World and used it to buy up everything of value in the Ottoman Empire (the latter never really recovered) … the sellers had no idea how plentiful gold had become and hence sold too cheaply. Talk about arbitrage!

Of course, it wasn’t entirely “riskless” … especially at the beginning.

Opportunities for arbitrage are all around us. But at a certain point, the little one-offs like Jeremy described aren’t worth the time or effort for a successful person … just as theoretically it’s not worth Bill Gates’s time to pick up a $100 bill off the sidewalk. For the big player, a big deal with a small margin is worth much more than a lot of little deals with big margins. And it’s likely a lot less effort to boot. Everyone has a “sweet spot” somewhere between a sidewalk lemonade stand and multinational corporate takeovers. The trick is to move successfully along a continuum from the former to the latter, gradually upping our capabilities and hence our ambitions.

27 chrisblogging.com

That was a great idea! You used a big company like Dell to your advantage. It does not get much better than that…

28 chrisblogging.com

I had to come back for more on this post…

Everybody who wants to make money should learn to think like this! You are always looking for an opportunity to cash in…

29 Marc Eilbeck

this is oldschool money making :D difficulty is finding the product to buy and then sell on.

30 Grivon

Buy low, sell high, buy low, sell high… no matter how repetitive just keep reading about business… I’ve been doing so since I Was 9 and am only now just getting the hang of it :S

31 Adam Maywald

I remember when I was younger and Ebay was pretty fresh I’d go around to garage sales and pick up items for really cheap. Once I picked up 2 pairs of designer jeans for $3 and sold them for $45. It was a start to something bigger. My neighbor now does a lot of this buy via Craigslist, where he does these “online” garage sales. Every time he does it, he makes $200-$300 in a day. Pretty easy stuff. Its so easy to make money with the internet. Most people just get so focused on EVERYTHING that the “noise” is the real problem, not their capabilities.

32 printnpost.com

That was a great article…and craigslist is such an easy place to make a few extra bucks. i use it myself weekly for little things and you right..no new car coming my way but it pays the bills!

33 Paul.

I would think hard drives are hard to sell on craigslist… maybe not? It’s easy to sell motorcycles on there.

34 Paul.

Which day is black friday……after Thanksgiving?

35 Modern Worker

This is very true. I use craigslist frequently and have to say it’s a fantastic way to flip for profit (both new and used). w00t!

36 Modern Worker

Tech stuff usually goes like hotcakes on CL

37 Richard

This might be a silly question but how did you distribute the sales from craigslist? Did you mail the items or meet in person and exchange?

38 Overdrive

I have used this tactic before and it works wonders. yes, I might not have 2,000 to spend outright, but when I had only $50 and turned it into $450 then I knew that I was doing alright. This method is used all the time, but you just have to know where to look!

39 Mason

“Plz just quit now u fail.”

that made me lol. yea, people who say they want to do this actually need to invest time into it or they will get no where.

40 Kiley

Yeah. I would love share my angle, but I’m a greedy ba$tard.

41 nate

Do you really consider Lincoln a small city?? I just checked Wikipedia and it says the population is like almost 250k. The “city” I live in has less than 20k people.

42 eTown Landlord

That’s awesome… when I was in Italy we went to Venice and everywhere we turned there were shops selling Murano glass… So I purchased a couple of murano glass pendants for three bucks each. I did try to sell them on ebay but there are so many murano knock offs from china that only one sold. I did triple my profit, whoo hoooooooo $10. That’s ok, it was a fun experiment. I’m sure eventually I’ll find a market for my little shiny gems…

43 cooliojones

I say start preparing for Black Friday NOW. Get your friends organized, know what stores to hit and all that. Sure the ads aren’t out yet, but know what parts of the city to go to. Travel to remote areas if you have to. For the past 2 years I made money off of this. It does work.

44 cooliojones

Wow, you’re amazingly negative about this whole thing. 2 hours might have been the time to see a deal, compare it, look on eBay, etc. The object is to use this case scenario as inspiration, then go for it.

Everything you posted except for the last line relates to ShoeMoney’s last ‘reason’ (#3). Focusing on the negative is not going to bring you any positive.

45 cooliojones

Usually on CL you just meet the person in-person (weird use of words there) and do the exchange. Cash for the goods.

46 cooliojones

Another way to use CL is to get free stuff that people give away, then turn around and sell it. Most people who give away stuff are just lazy and don’t want to bother with selling.

47 jim

I used to do this all the time at school since I lived so close to the post office, not so much anymore. I wish i had an assistant hahaha

48 fcc

There are so many negative comments! I just love the internet. No matter what someone says, people love to come out and be negative about it. He’s giving great advice and it’s going to make you a little cash. If you don’t like the idea then don’t try it.

49 BlueDevilMedia

These people will always be 9-5 with hopes of retiring before they are 65…

50 Jason Golod

Some people hustle, some people watch. I am sure babyjane is happy to have some extra $$ in the piggybank.

51 The Dino

That is exactly ho I think. If I want to buy somethng for myself I find the best price and if the price is so low that I could sell it again with profit than I buy so many so for me is the one for FREE.

52 stupid 3gp

A perfect example how intelligent you work and investmoney. Anyone can invest and test the water how deep it is and how many fish you can catch.

53 Stuart Hannig

Very nice post man, I love these.

54 Don@AffiliateWatcher

Funny you should mention checking prices on eBay. Years ago when I was trying to get my business off the ground and had lots of time between Clients, I’d visit Garage Sales and sell stuff on ebay. I did okay, but where I really cleaned up were auctions.

Auctions send out a flyer about what will be auctioned off. Some are more detailed than others. I signed up for all the auctions in my area and each week I would make a game plan to visit them. Before I went, I’d check ebay to see what the stuff was going for. I’d then write out my list and put beside each item the most I would bid on it.

Estate sales were the best by far. But each month I’d knock down 2 to 3k and that does’t inclue the $800 I always kept back for seed money. Anything over seed money went to Mamma to buy groceries and pay the bills.

Yeah, I get sick of hearing the whiners too!

Don

55 Alex

Jeremy,

Your money making talent is overwhelming. However, I think, you actually lost some money this time.

Here’s my calculation:

1. businessweek article states that this blog accounts for 3% of your total revenue bringing around $12k per month. So your total revenue is around $400k/month.

2. That means that if you work regular 160 hours per month to make that revenue happen, one hour of your work is worth $2500. Spending 2 hours on something much less profitable equals to $5000 of pure loss.

3. $3500 – $5000 = -$1500. Additionally you lost whatever you pay for 4 hours of your assistants work.

56 Gecko Tales

One trick to play the imbalances is to make sure lots of others are not selling the same thing you are. If you sell something that is wanted, but not oversold (at your low price) then you have something.

57 engaged

When you can’t hack arbitrage online, take it offline and make peanuts!

58 Jon

Thats hilarious coming from the guy who begged his way into the Elite Retreat. Your such a loser engaged.

59 Joeychgo

Ive done this kind of thing many times. It works. If your mentality is to make money anyway you can, you’ll have a leg up on success.

60 Dave Starr --- ROI Guy

yes I’d have to echo cooljones’s thoughts here. The guy shows how to make a thou in ten days at virtually zero risk … no need for a high-traffic site 9ses Craigslist’s traffic), no real work and an amount even a person who just went bankrupt can use (even a high schools kid’s Visa has a $2500 cedit limit) and you get paid within hours.

It takes virtually zero work to make a listing and you don’t have to sell only in your city … you carry the sold product to the local UPS center and hand them the address written on a piece of paper and you card and they’ll put it in a box and send it anywhere in the US for 6 or 8 bucks … I mean you do have to get your butt out of bed for 30 minutes but that’s about it … and yet you wah,wah, wah about how much work is involved? Amazing … to say the least

Last year I was selling a product for my brick and mortar business. I needed three copies of MapPoint to go with the hardware. My “Microsoft Partner” price was over $250 each. I bought three copies brand new off eBay for an average $150 each and shipped them to my customers via UPS for $300 on each invoice. $450 profit in literally 1.5 to 2 hours total time, including going to the UPS store. How easy do people have to have it?

61 engaged

ya, i think that statement was corrected with facts… nice try.

62 Daniel McLean

It’s posts like this that keep me subscribed to your blog, awesome. Simple, quick-turn-around, money making, and what’s really cool is that you haven’t stopped looking for opportunities even though I suspect you have an abundance of income already :-)

63 BlueDevilMedia

Its actually not that hard ;)

64 mmoexplorer

What a great post!! I have been doing this for a long time. If you have fun doing this stuff, then it is like free money.

65 edward

Shoe, People like you need to be respected. The mere fact that you made money is good, but the bottom line is that you made the move and tried, while others just watch and ask, what happened. You in turn made it happened. More power to you.

66 Sha Sisson

hey I really liked your blog and the posts. I will bookmark this site and return.

67 Teddy Hegmann

That makes sense to me but does this?

The only job you start at the top is digging a hole. :)

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