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Arbitrage Skills and Fairness
Over the years the mission of this site has evolved somewhat. It started as a pure travel blog, morphed into miles and points and now covers many topics including personal finance, how to save money and still of course travel along with miles/points. The truth is our team here really loves earning a lot of points and saving money and thus we share how to do that.
One of the most effective ways to do this is through arbitrage. Arbitrage involves buying something somewhere for a low price and then selling it elsewhere at a higher price. (Official definition.) It’s a pretty basic economic principle and one that if learned can generate a ton of rewards and even some cash. What do we sell? Pretty much everything, but let’s take a step back for a minute.
The Two Sides of Arbitrage
There really are two sides to arbitrage and each can benefit your life tremendously even if you aren’t buying and selling at the same time.
On the buying side, arbitrage involves finding a good deal. Yes, the better you are at finding deals the more money you can make, but these skills don’t have to be used for that purpose. For example, you could just save your family money by finding items at half off what you would pay for them in a store. When I want something for myself or for my family I often find it at a deep discount over what others would pay. In other words I get the cool stuff and pay a lot less for it! 🙂
Beyond just benefiting ourselves through profit or cheap deals, learning how to get a great deal can benefit others as well. A few years ago a local Sears store had a blowout clearance where all clearance clothes items were only $1. My wife and I bought up over 100 items and donated them. We have done similar things in the past as well, especially with toys.
The other skillset involved with successful arbitrage is the ability to sell. While on the surface this can seem simple (just list on Amazon or eBay stupid) it isn’t as easy as it seems. As someone who has spent years learning about this, I can say the better you are at selling, the more successful you will be at arbitrage.
There are so many avenues by which you can sell “stuff”. Learning the best ones for your situation, merchandise and personality will help you find success. From selling locally via Craigslist, apps like Offer Up or even the Swap Meet, to getting more advanced with eBay, Amazon and other marketplaces, so many opportunities exist.
Learning how to sell stuff can be good for your situation as well. Being able to get top dollar for your iPhone or other used items is a skill worth having. Companies like Gazelle offer you half of the value of your phone and then just sell it. You could be selling it at that same price. You could also help your family, church, etc. maximize their selling opportunities. #Skillz
Is Arbitrage Fair?
Many people argue against arbitrage because they see it as being “not fair”. You especially see this argument for example with ticket reselling. I get it, believe me I do, but the honest the truth is that supply and demand factors into the world every day and you aren’t going to be able to stop it. If 100 people want Hamilton tickets and only 10 are available, either you are going to make some money or someone else will.
Yes I know there are people using bots and other unfair advantages and I agree with stopping those, but if I want to buy tickets and then sell them I have done nothing wrong as long as I didn’t cheat to get them. This goes the same for gift cards, merchandise and anything else.
I think at this point hopefully you will begin to see why I think arbitrage is fair. It’s fair because it isn’t easy. You have to learn how/where/when to buy at good prices and how/where/when to sell to maximize your profits. The better your skills the more money you can make. It’s work and you also take on a lot of risk. And it doesn’t always end well.
Is Arbitrage For You
Whether it be gift card arbitrage, retail arbitrage or ticket reselling, it takes time and effort to really become good at it. It also takes a somewhat large risk tolerance and a willingness to learn. In the end if you can do those things, you can earn a lot of miles/points, make some money and perhaps even enrich your families lives and the community as well. Of course I’m just a guy who buys and sells stuff for a profit so don’t take my word for it. 😉
I have sprinkled links to other posts about arbitrage throughout this one and highly suggest clicking through to learn more from posts we have written in the past on this topic. Is arbitrage fair? Is it right for you? Share your thoughts in the comments!
Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.