How many HNers have dabbled in arbitrage? I'm kind of curious to know how many HNers have spent some time making money / learning arbitrage and other revenue generation schemes similar. Obviously hacking isn't always in the sense of creating something great for people to use.. |
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.
He lived in Queensland and has probably retired there too long ago. Shifty bastard.
Growing my web apps to the same income level as that site was much harder and took much longer.
Can you elaborate please?
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.