Best Ways To Make Money Online – Part 1: Arbitrage
Do you want to know the best ways to make money online in 2017?
Then you have to read my new series!
In my first part, I am talking about how you can make money with arbitrage!
If you haven’t already, check out my series How To Make Money From Blogging.
I cover some neat ideas and tricks there, how you can build and monetize a blog.
Let’s take a closer look at arbitrage now:
What Is Arbitrage?
When you are getting into arbitrage, you have to understand that you will be some kind of a middleman.
You will look for clients that need a certain service and connect them with someone who offers that service.
To ensure that the client does not bypass you, you usually don’t let him know that you are a middleman.
No, in most cases you get paid by the client and then you go to the person who can fulfill the order and pay him.
Of course, you have to charge the client more than you are paying for the service!
The difference between what you get and pay is your profit.
It is also a win-win situation.
Often, you can offer the service even cheaper than the client is expecting.
The person who fulfills it gets what he is asking for and you make a profit, too.
Everyone is happy!
Happy customers = more sales!
So, all you are doing is finding clients and selling services of other people.
And don’t worry. There is nothing illegal or sketchy about arbitrage.
It is a genuine way of making money.
It is the same as if you were selling products you are not producing yourself.
Does Wallmart produce its products?
No, they are buying them for wholesale prices and sell them for a higher price.
You are doing the exact same thing with arbitrage.
The only difference is that you are selling a service and not a physical product!
Do I Need Money To Start With Arbitrage?
It depends on how you set up your arbitrage business.
If possible, you should ask the client for a 50% upfront payment. For that, you have to gain trust first or have a good reputation already.
With that money, you can pay the service provider and don’t have to invest anything yourself.
If you can’t make the client make an upfront payment, you have to pay for the service out of your own pocket.
In that case, you would have a small risk if the client does not accept the final product. If he doesn’t pay for it, you won’t get the money back from the service provider!
So, you might have to invest a little bit of money in the beginning.
But once you have build up a portfolio and have a good reputation, you can easily ask for an upfront payment.
The margins are usually pretty high in arbitrage.
So that 50% upfront payment should be enough to cover the costs.
Where Can I Find Clients And Service Providers?
You can find them (almost) everywhere!
Finding clients is pretty easy.
Here are my top strategies to find clients:
1. Search on Craigslist or similar sites
Craigslist is a good place to get started, but it is highly competitive.
Search for people looking for the service you are offering and contact them.
You have to be quick!
Many people are hunting for clients on Craigslist, so they will most likely only read the first few messages they get.
Getting an upfront payment on Craigslist is difficult because there are many scammers out there.
I was able to get an upfront payment only in a few rare cases.
It is all about trust. If you can show them previous work or reviews of your work, they will be more likely to trust you.
Other sites where you can find clients are:
- Gumtree
- Elance
- Freelancer
- other sites that offer opportunities for freelancers
Remember, that those sites are very competitive.
You have to work hard to find clients there!
2. Build your own website
This is an advanced technique but very effective!
If you want people to take you seriously, you need a website for your business.
Don’t know how to build a website and drive traffic to it?
Learn how to make a free website fast and easy.
When you are using your own website, you can sell the service directly on that site.
Whenever you make a sale, you forward it to the person who fulfills it and you can reap the rewards.
In the long term, having your own website is a must-have requirement.
When you are starting out, you can do without one.
But don’t wait too long before you get one!
3. Use paid advertising
For this, you would need a website or at least a Facebook page.
There are several ways to pay for traffic and future customers.
The most common are Facebook ads and Google Adwords.
Both need quite a bit of experience.
If you don’t know what you are doing, you can lose a lot of money without getting anything in return.
Only use paid advertising, if you know how to do it efficiently.
I am going to write more about paid ads in the future.
Once I have done that, I will link to it from here.
4. Visit forums and sites like Quora
That is one of the best ways to find clients for free.
Sign up on Quora and different forums in your niche.
Be a helpful member and make it known that you are offering a service.
Leave some way of contacting there (link to your site, Facebook, etc.).
The more you help out people there, the more clients you will get.
This technique is great for beginners and advanced!
Use it a lot!
How To Find Service Providers
That’s a bit trickier. You might have to invest quite a bit of time before you find great providers that are not too expensive.
This is where you have to stay focused and don’t give up easily.
Once you have found some outstanding guys, all you have to do is get those clients then.
1. One great source is Fiverr!
When you compare what your future clients are willing to pay for a service and how much people on Fiverr are charging for it, you can get huge margins!
I have sold logos for over $200 USD and only paid $20 USD for them on Fiverr!
I am sure you can see the potential here.
Fiverr is great for some services, like logos. For other services, it can be more difficult to find good enough people.
2. Google Research
While this is an obvious option, it is my #1 way of finding new service providers.
You have to dig deep and maybe for a long time.
But you can find really amazing guys that will offer their service for a good price.
Contact them directly and make a deal with them.
You can tell them, that you are interested in a long term business relationship.
That way, you can get a discount more often than not.
How Can I Make Money From Arbitrage?
I mentioned it before but I want to make sure it is really understood:
Your profit will be the difference between what you get paid from your client and what you yourself pay for that service!
All you have to do for that is finding the right people and send a few emails.
Setting the whole thing up takes some time. But then it is just “rinse and repeat”.
What Are My Earning Potentials With Arbitrage?
The margins can be huge.
They are often around 50-80% (profit) but can be even higher.
Like in my example from above!
I paid $20 USD for a logo and got over $200 from my client.
If that’s not a huge profit, then I don’t know what is!
Are There Any Courses Or Tools For Arbitrage?
There are, of course.
While you will still have to set things up yourself and send those emails, there are courses and tools that can make it easier.
One tool to find clients and match them with offers on Fiverr is Arbitrage Underdog.
A really great course about how you can use arbitrage with physical products is this one here.
Yes, you can use arbitrage for physical products, too!
The technique you can learn in that course is really smart!
You will use Amazon FBA and source products from local stores.
It is super smart and you can make good money from that!
My Personal Experience With Arbitrage
Like I said before, I have sold logos as a middleman.
It worked really well, but I was a bit tired of using Craigslist.
Therefore, I let arbitrage rest and started other businesses.
Now, I am planning to make a huge comeback with arbitrage.
I am working on a big project that has the potential to make thousands every month.
Most is in place already and I am planning to launch it within the next 4-6 weeks.
I am afraid that I won’t be able to share my niche, but I will definitely update this post when I have some numbers!
The potential of arbitrage is huge!
Your job is to find a great niche and service providers.
Finding clients is relatively easy then!
Think outside the box and work smart!
What I Mostly Do To Make Money Online
Arbitrage is a fantastic way to make money online.
And I am about to make a huge comeback with it.
However, I have another way of making money online and it is my main source of income.
What I do is called affiliate marketing.
I build niche websites and promote products from other companies on them.
Whenever someone buys something after clicking on one of my affiliate links, I get a commission.
All you need for this is a website!
You don’t have to buy, store or ship products.
You are just the person who makes the sale.
Sounds awesome right?
Get Started With It Here!
Is Arbitrage The Right Thing For You?
I absolutely love arbitrage. I think that it is one of the best ways to make money online in 2017!
How about you?
Do you agree?
Do you want to get started with arbitrage?
Let me know in the comments below.
You can also ask me any question you might have!
Talk to you soon,
Moritz