from Hacker News

How many HNers have dabbled in arbitrage?

by md1515 on 1/14/12, 12:56 AM with 11 comments

• by patio11 on 1/14/12, 1:13 AM

  Kinda a cross between arbitrage and outright windfall, but it is a fun story:

  Does anyone remember Battletech? Due to a catastrophic error in a logistics system somewhere, a bookstore in Ogaki City once received a shipment of English Battletech CCG cards. Battletech is originally an off-brand knock-off of a Japanese series, the license was never very popular in Japan, this particular product had recently died due to lack of demand in the US, and geeky English products are not hot sellers in semi-rural Japanese agricultural/manufacturing communities. So the bookstore tried to liquidate their stock, and put the sign "100 yen" (then about $0.80) on the box. Battletech packs of cards retailed for about $3 each prior to going out of print. Score, right?

  On investigation, the unopened box was not a box of $3 booster packs. It was a package of $10 starter packs. And they were first edition. And the store, not having been able to move even their Japanese CCG cards, was not interested in opening the retail box so they were selling all the packs in the box meant to be opened by the retailer for 100 yen.

  I told the cashier that this was likely a pricing error. He either didn't understand what I was saying or just didn't care. So I bought a few boxes of boxes, for 100 yen apiece. Then I found a Yahoo mailing list for fans of the trading card game... and promptly send them an offer which was about one step less unlikely than that from my forgotten grandfather from Nigeria.

  A few spirited rounds of negotiation later, I went to the Post Office, dropped approximately half the profits on shipping (I was irrationally worried about being perceived as being a scammer, so I went for the expensive option), and cleared about a student loan payment.

• by adrianwaj on 1/14/12, 6:46 PM

  I spoke to some guy in (I think) about 2003-2004 who was selling SEO services by taking existing sites, having them built on top of Mambo CMS which he'd outsource using elance for $2000-3000 and sell them back over $60,000 - he used some form on his site like "how much money do you think you'd make if your site came up around 1-2 vs where it is now?" and he'd price accordingly. He had very little IT skills if any. Part of his secret he was reluctant to give up: submitting to DMOZ.

  He lived in Queensland and has probably retired there too long ago. Shifty bastard.

• by dangrossman on 1/14/12, 1:59 AM

  I paid my way through my first college degree with a site where I repackaged another company's services at a markup. People were willing to pay much more than they were asking if only the service were marketed differently, and this company was happy to have the business with me doing the advertising work. My markup was almost 40% and I was pulling in 20-30 customers a day from Google AdWords alone.

  Growing my web apps to the same income level as that site was much harder and took much longer.

• by md1515 on 1/15/12, 7:29 PM

  OP here. I actually haven't done any until recently. I just sold a musician FB likes at 100%+ cost I paid to get them. Might pay the bills..

• by paulhauggis on 1/14/12, 2:18 AM

  This is how I've been paying my bills while I'm working on my startup (it's much better than consulting/freelancing). It's not as easy as it sounds. It took me almost a year to figure out the whole process (it's more than just software development), but I now just need to maintain my site and process orders. It takes about 2 hours of work a day.

  You also need some sort of cash flow (or credit cards) to do any sort of arbitrage and you have to learn to not worry about the unknowns.

  As an example, if you are arbitraging services and your service provider does a bad job, you are responsible for cleaning up. This may mean returning the customer's money (and getting your money back). But, after doing it for awhile, you can find good people to work with and reduce your risks.

• by profitbaron on 1/14/12, 8:07 AM

  I have actually done this a few times in several different markets. For instance, I used to buy domains in the GoDaddy Auctions for $x and resell them for $xxx+ instantly to other webmasters/domainers. I actually ended up giving the method out for free including the core details and the services used to find the domains which would give the biggest ROI. The method still works today.