EBay Arbitrage Idea

[NewUser2006]

Just in the idea phase right now, but I could easily implement it.

Set up a web bot to look at commonly sold items on EBay and collect the average selling price of those items. Then after a few weeks of data have been collected, the bot then goes and looks for those items that have auctions that are about to end and are below a certain threshold (25%?) of the average price. The bot then alerts the user that the item exists, and she can buy it and resell it later.

This idea could be used in two ways, selling the software itself, or using it for your own profit. It is likely that if I generate enough sales, the arbitrage opportunities will dissapear as the market becomes more efficient.

Thoughts?

[ItalianFX]

This sounds like a really good idea. I wish I knew how to program something like that.

If you are the only one doing this, the market will not disappear as rapidly as you might think. Also, Ebay is not priced by computers; therefore, someone is always going to list something that is undervalued, or items will just pass through without being noticed. There really is no system that keeps ebay prices in an equilibrium of supply/demand.

[Thremp]

Umm... I think costs would outweigh it. Also Ebay is a fairly efficient market.

[talentdeficit]

ebay is too efficient, you'd get killed by transaction fees.

[Nicholasp27]

[ QUOTE ]
ebay is too efficient, you'd get killed by transaction fees.

[/ QUOTE ]

not even close to accurate, in my experiences

i believe u can look at ANY category in ebay for a few weeks and find arbitrage options

the fact is, it's very inefficient...there are various levels of seller skill and that affects prices wildly

additionally, there are always people putting up buy-it-now prices that are FAR less than the average selling price is

if u made a bot that collected average selling prices for hundreds of items and then searched for buy-it-nows for those items that were 50% of ave selling price, u'd find lots of auctions every week that did that

at one point i was looking to buy a rare cd that averaged $60 on ebay; i monitored for a few days to try to get good price and found a buy-it-now of $25; i jumped on it and resold for $60

i then proceeded to do that about 5 times in a week or 2


i've bought megatouch machines for $400 that average $800 SEVERAL TIMES


some things that lower price below average:

- no picture
- too low buy-it-now
- bad end time (certain days are better and hours of day)
- sold when influx of stock (ie after rebate items that flood ebay for a week then go back up the next week after everyone sold them)
- bad description
- bad title
- placed in wrong category


there are many many others

ebay is an AMAZING place for arbitrage


2 key points for people who may decide to do some:

1) go for easy/cheap to ship items that aren't fragile...i learned that the hard way with megatouches; too big and too expensive to ship and ups likes to break them...go for dvds/cds/clothes/other things that can be shipped in a priority mail box for $4-8

2) obviously the margin needs to be high enough to cover the hassle and the ebay fees and your time


i'd do $25 for $60 cds all day long; they are easy and quick to ship and that's still >$20 each after fees and everything; if u can find a big stock of those, great

even better are >$100 that aren't big/fragile electronics

[Nicholasp27]

btw, u make ur money when u buy, not sell

i would do buy-it-now for the average selling price and be happy with a quick sale that way; no risk of it going for less than i paid for it and they always sold because it was a good price as well and i had good listings/categories/pictures/etc

one thing u can do is look at what auctions got the highest bids for the item and see what they did differently (title/body/shipping options/etc)

i always said same-day shipping via priority mail so u get in 2-3 days with cds/dvds...since all i had to do was print out the label from paypal and then go to the postoffice and tape it onto a box and put it on the counter (not even wait in line), it was no big deal

[Vlorg]

I highly agree with everything that Nicholas said except this part:
[ QUOTE ]
i would do buy-it-now for the average selling price and be happy with a quick sale that way; no risk of it going for less than i paid for it and they always sold because it was a good price as well and i had good listings/categories/pictures/etc


[/ QUOTE ]

I have sold a wide variety of items and had great success starting every single one of my listings for .99 or $1 no matter what the item normally sells for. I was also a big fan of the 10 day auction listing. You can time this so that your listing is up through two weekends. I found for most items I sold that Sunday evening was the best time to end auctions although this was different for various markets. Almost all of my auctions sold for greater than the average selling price with most of them in the top 20 percentile.

Vlorg

[CardMinger]

I have to agree with Thremp on this one.

Remember you have to pay ebay/paypal fees. Plus you have to pay the shipping for you to get the item in the first place...

good thinking but I just don't think this would be practical.

CM

[bestnameever]

Ummm, maybe I'm a retard here, but your idea sounds interesting. The part that bothers me is you posting your killer idea on the Internet?

*link removed*

[NewUser2006]

[ QUOTE ]
Ummm, maybe I'm a retard here, but your idea sounds interesting. The part that bothers me is you posting your killer idea on the Internet?

*link removed*

[/ QUOTE ]

I doubt it's killer, but I do think there are some inefficiencies that could be exploited.

However, I don't really want to spend all of my time buying and selling on ebay... so I guess this really is an invitation for anyone else who wants to do this.

If I ever get some free time, I might code it up.