What is arbitrage? Put simply, arbitrage is the purchase of an item on one
market for immediate sale on another market in order to profit from a discrepancy
in the price between those markets.
Arbitrage is a term more commonly used in the worlds financial and securities
markets where, for example, traders search out and take advantage of differences
in currency prices between different county's currency markets.
Taking advantage of misspelled titles and descriptions is the most popular type of arbitrage on eBay.
In any situation where a difference in price of a product, service or item
exists an arbitrage opportunity presents itself because it allows you to buy at
the lower price and sell for the higher price making a profit in-between.
So what does arbitrage have to do with eBay and how can you apply the concept to make a profit?
Every day, sellers list items on eBay in inappropriate categories or with poorly
worded, incorrect or misspelled titles and descriptions. Due to the way that
most people search for items on eBay (by entering keywords in the search box)
these poorly listed auctions are hidden from the vast majority of buyers.
Given the sheer volume of auctions being listed and running at any one time,
these poorly listed auctions are a constant source of potential arbitrage opportunities.
Lets take a look at the different types of arbitrage opportunities on eBay...
Misspelled titles and descriptions
Taking advantage of misspelled titles and descriptions is probably the most well
known and popular type of arbitrage on eBay. These opportunities exist simply
because people don't realize how important their auction title is to the success
of their listing.
As we mentioned earlier, most people search for an item by entering keywords in
the search box on eBay's main page. What most sellers don't realize is that eBay
by default only searches the auction title and not the auction description as well.
In order to search the auction description as well as the title the user has to
use the "advanced search" option and check "search title and description". Very
few people know of this "feature" and even fewer take the time to use it.
To give you an example, searching just titles for the keyword "Playstation 2"
today returns 10576 items but searching for "playstation 2" in titles and
descriptions returns 59879 items.