How To Make Money With eBay Arbitrage

by Hank Coleman

How To Make Money With eBay Arbitrage

Have you ever wondered where people get the things that they sell on eBay or Half.com? Have you ever stalked an item on eBay. My wife used to desperately want a crystal Tiffany’s iconic blue box. For weeks, I stalked the item on eBay in order to get it for her for Christmas one year. I was barely able to find it in time. I almost had to pay full price for the crystal box.

Have you ever seen items in stores that you know are selling for a higher price on eBay? Have you ever seen items on a website that you know sell for a higher price on eBay? You can profit on that difference in price parity. It is called arbitrage.

What Is Arbitrage?

Enron stock certificates are great for eBay arbitrageArbitrage is usually talked about in currency circles of finance and economics. There are often times when different countries’ currencies are not priced correctly. Let me give you a simple example. If the United States’ dollar is worth 1.5 Canadian dollars and one US dollar is worth ten Mexican Pesos, if a Canadian dollar does not equal 15 Mexican pesos, then there is a currency arbitrage. If a Canadian dollar was worth 20 Mexican pesos, investors could trade US dollars for Canadian dollars, transfer them to Mexican pesos, and then trade them back to US dollars and earn a profit because all of the currencies are not equally valued. This is called arbitrage. Currency traders have sophisticated computer programs that automatically trade currencies and take advantage of any pricing imperfections in order to make a profit.

eBay Arbitrage Can Help You Make Money

The same principles can be applied to buying and selling items on eBay and eBay’s sister company, Half.com. There are often times when you can find items around your local neighborhood or on websites that you frequent that can be sold for a profit on eBay. I have found items on websites that I know sell for higher prices on eBay.

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I have also seen items in local stores that I have known sell for a higher price on eBay. The key is targeting a specific type of item or category and becoming extremely familiar with that item or group of items.

Three Items I Found Price Disparity With

Poker chip lighters where my first eBay arbitrageI love smoking cigars and gambling (you are just learning a lot about me today!). So, one day, I saw these poker chip cigar lighters. I found that if you searched for “poker chip lighters wholesale lot” in eBay that you could find people selling 24 of them in a lot very cheaply.

I also found that if you sold them individually that you could sell them for a huge mark up. It was awesome! I have also sold old Enron stock certificates right after the company’s melt down on eBay. I found a website that sold them fairly cheaply right after the company’s collapse, and they had not adjusted their prices fast enough to keep up with me purchasing the shares.

After about a month of me buying and selling the old shares on eBay, the company that I was buying from caught on and raised their prices exorbitantly. Another example of price disparity that I have taken advantage of is in DVDs that have gone out of print. If you can find a place that sells the DVDs, or books too for that matter, there can be a great resell potential on eBay as well.

You can find items in your local area that sell for less than what you can purchase them on eBay for. The hardest part is recognizing them. You have to constantly be on the lookout for items where you can practice eBay arbitrage. You should constantly be thinking about whether or not you can sell items for more on eBay after you purchase them in your local area.

Some of the best places or things to sell are what you know and understand the best. Have you found things that you can resell on eBay that you can buy cheaply and resell for a higher price?
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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 593 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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{ 5 comments… read them below or add one }

Shaun @ Smart Family Finance

If only this can be done with gasoline. There is quite an arbitrage from state to state.

Reply

Hank

That’s a great point. I think that transportation costs from refinery to wholesaler to gas station has a lot to do with that price disparity.

Reply

J.B @ My University Money

I bet you could probably do this between state lines just as easily with provincial lines here in Canada. I know that alcohol is taxed a lot more in some provinces. If you live close to the border you can stock up and sell on the other side. Actually, in Alberta they don’t have PST so for larger items, you can easily sell it for more in your own province.

Reply

UltimateSmartMoney

Great post. It’s a very clever strategy. Keep in mind the fees associated with selling on ebay (including paypal) and shipping cost. It does require a lot of work on seller’s part for packing and shipping. Always use delivery confirmation or else you could end up refunding everything. I once bought a box of magic the gathering cards at local yard sale for $2 which I ended up selling them for $50 on ebay.

Reply

Evan

In addition to buying in lots you can try to find items that are selling at the wrong time. I used to buy coin operated game machines that finished during the day and then sold them to finish at night.

Reply

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