Hello guys, Daniel here. Welcome back to our next lecture from this class on “free ways to do money online with arbitrage” but we have talked a little bit about arbitrage in our previous lecture and we have spoken about the fact that we will talk about two models of business with arbitrage in this course practically the one with digital products and services and the one with physical products and right now in this lecture we will talk about the physical products arbitrage, we will go into more details and which are options of business that we have into this type of arbitrage. So let’s go on with physical products arbitrage.
First of all, we have the first type of physical products arbitrage which I personally like very much is business to business physical products arbitrage and let me just give you an example of this type of arbitrage because it’s a little bit different than what we’ll talk about in this class but it can be a very lucrative business model. For example, you’ll find a buying lead on a business to business online marketplace like ec21.com which is a Korean online business to business marketplace and you find here a buying league that wants for example, to buy 500 shirts per month at x price, you go to Alibaba.com which is the biggest business to business online marketplace in the world and find a shirt supplier and negotiate a monthly order of a high five hundred thirty at x – 20% percent price. What you will practically do in this situation, you will connect the two businesses and earn the 20% difference from the price, that means a 20% commission for you which will be profit for you, which is the big advantage of business to business arbitrage.
And why I like this business model very much is the fact that it can be a monthly recurring income okay, why? Because most of the times between businesses, they practically have monthly transactions, why? Because a certain business needs a certain material or a certain supply of something okay, and practically needs it on a monthly basis to run its business. That means you will have on and on transactions again and again which practically means for your recurring income if you negotiate your deal right okay.
Now, let’s go on to the other type of arbitrage with physical products which is the business to consumer or to client physical products arbitrage, this is practically the type of arbitrage that we will be focusing on in this class and this is the one that I in my opinion suggest you to start with okay, and practically we will focus more on business to client online physical products arbitrage so not a practically the classical way okay.
And the most popular type of arbitrage from the business to clients online sphere is drop shipping, it’s by far the most popular; it has an ascending trend in the last couple
of years; it’s a business model that a lot of people from all around the world are using successfully to generate income and practically what does drop shipping mean or how is it made you order the products from one suppliers, so you find yourself a supplier for a certain product and your supplier will deliver order that you make directly to your clients or to your own client that wants to buy that product. So the product never passes through your warehouses okay, or through your hands or anything like that. You just order the product from your supplier and he will deliver it directly to your client okay, it’s a very lucrative business model, you don’t have to get stocks of product, you don’t have to build warehouses or to rent warehouses or other things like that okay, that is the fact that I like the most about this business model.
Now, we have two options to this type of business to client online physical products arbitrage okay. First one is the fact that you can build your own online marketplace where you will sell your product at your specific price point, you need to be very good at marketing obviously, it’s like building an online store okay, and after that you find your own clients for a higher price point, then the one to which you’re buying the products and practically you will have a profit margin okay, but you have to find some of those clients and that’s where the marketing part comes in okay, that’s the part where you actually have to be very good at. For example, a very popular business model right now, it’s creating drop shipping, the drop shipping online stores with shopify, promoting them with Facebook ads, there are people out there which are very skilled in Facebook ads and they are making actually a couple of hundred thousand dollars in profits per month. There are people that are actually at that level and they’re marketing on their own, so they have build their own market base, their own online store and just by using Facebook ads they created separate marketplace for their products at which they have set up a certain price point.
This is the best way to go if you are very skilled at marketing because you can actually take take it to a whole new level and build your own marketplace. The thing we will be focusing on and the one that anyone in the world can actually start with because you don’t need any money is the fact that you can leverage different online marketplace okay, this is the business model like eBay.com. For example, you can find products on Amazon at a certain price or for example it’s a $15 and. On eBay those type of products are sold for $25, you can practically use the Amazon products to sell them on eBay let’s say $23 and you make a profit of $8 okay. So practically, you are leveraging online marketplaces and you profit from the difference price points that they have okay.
That’s about it guys for this lecture, thank you very much for your attention I hope that everything is much clearer for you right now and I’m looking forward to our post. Bye bye till then,
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