At a very basic level you can make money in a few different ways. One way to is to sell your time in exchange for money. Most people do this with a job. They trade 8+ hours per day for a paycheck every two weeks. This is the most common way to make money.
Another way to make money is to transform one thing into another thing that’s more valuable. Some people do this by owning a business or being self employed. They buy something, change it and then resell it for more.
Yet another way to make money is through arbitrage. So what exactly is arbitrage?
Arbitrage is the simultaneous purchase and sale of an asset in order to profit from a difference in the price.
When you use arbitrage you take advantage of price differences in a market. Put another way, you take advantage of items that are incorrectly priced. These items have been priced too low and you can resell them at a higher price.
Just last week I made a cool $60 through some Craigslist arbitrage. It was easy. It was fast. Best of all it helped me turn $40 into $100. With online classifieds like Craigslist making a bit of extra money has never been easier to do. Here’s how you can make money through Craigslist arbitrage too.
Make Money Through Craigslist Arbitrage:
#1 Learn the market. To make money reselling stuff on Craigslist you have you have a pretty good understanding of the market. You’ve got to learn which items are priced too high and which items are priced too low.
What market you choose totally depends on you. Pick something you know well. It could be cars. It could be electronics. It could be cell phones.
For me its bikes.
Whatever market you choose you need to be able to quickly determine if an item is in good condition. You have to be able to quickly evaluate if you’re buying a lemon or a diamond in the rough. For that reason you need to pick something you know well.
#2 Learn the pricing. Once you pick a market to focus on you need to learn the pricing. Buy low, sell high. You need to know what price is considered low. These are the items you want to pick up quickly. You need to know what price is considered high. You want to sell items just below this high price (anything less and you’re just leaving money on the table). Look at how items are priced. Check back the next day. Take note of which items have sold and which items are still up for sale.
#3 Learn how to haggle. Some people can’t do it. My wife hates it. But if you learn how to haggle you can add a bit more margin to your deals. This extra margin can make a pretty big difference over the long run. So learn to haggle.
#4 Don’t be afraid to walk away. Play it cool. Don’t be afraid to walk away from a seller if the price isn’t low enough or the item isn’t good enough. Don’t waste your time and effort if there isn’t enough potential for profit. The last thing you want is to be stuck with something that won’t sell or needs to be sold at a loss.
#5 Take good pictures. Write a good description. One of the best ways to make money through Craigslist arbitrage is to become a good marketer. Learn how to take beautiful photos. Learn how to write a good description. Buyers want good photos and good descriptions to help them make a decision. Take advantage of sellers who don’t bother to do this by buying their items for less and reselling them for more.
Check out my past post for tips on how to sell items on Craigslist quickly.
My Craigslist Arbitrage Example:
My example happened last week. I know bikes pretty well. I bike to work each day. I do all my own maintenance to save money. I also keep up to date on different brands of bikes, which are good quality and which are crap.
Last week I happened to notice a bike for sale right beside my work. It was listed for $50. It looked dirty and neglected but otherwise in good condition. It also looked like it had a nice leather seat. So I arranged to meet the seller during my lunch hour.
The bike was in good shape. An easy flip. Plus the seller really wanted to get rid of it. I offered $30 and settled on $40.
After taking it home and giving it a quick wipe down I relisted it for $100. There were some lowball offers but after only 2 days I got an offer at full price.
All in all it took ~30 min to make $60.
Even an extra $60/month works out to an extra $700+ per year (all cash too!). If you need money then you should give Craigslist arbitrage a try too.
Photo by Pål-Kristian Hamre via Flickr