“Arbitrage” - Daryle Lambert's Antique and Collectible Blog – A word you should know.

Arbitrage - Thanks to frankschilling.typepad.com

I can't help myself but I keep going back to the lessons I learned as a stock trader. Often these same lessons can be applied to the Antique and Collectible markets and convert themselves into money in our pockets.

One of the surest ways to make money with stocks is to arbitrage between different markets and this same strategy can be used with antiques and collectibles. The difference between what a stock is selling for on different exchanges often gives the trade an instant profit. If Ford is listed at $6.10 on the New York stock exchange but $5.95 on the Pacific exchange, you would buy on the Pacific and sell on the New York thereby capturing a $.15 profit with very little if any risk. There are traders doing this all day long throughout the world. So why shouldn't we do the same thing in our field of business if it is possible, and it is.

Why can't you buy items on the different auction sites and immediately sell them on another site that you think will bring a higher price? You may even use a “Buy it Now” feature to hasten your profits. If, by training yourselves on market values, you find an item that is selling too cheaply, you would buy it and sell the item immediately on another site. This is possible even before you receive the item or can be done once the item is in your hand. For example, Seeauctions seems to have a very strong market for coins so searching the other sites you find a silver dollar that isn't reaching a sale price that is equivalent to its value. You buy it and that same day list it on Seeauctions. There are now many auction sites and new ones springing up everyday so you can sit back and scan these sites until you find a bargain. The greatest part about this strategy is that it doesn't cost you anything to use it. All that you must keep in mind is the shipping on the purchase and the fees on the sale.

If you use Paypal you might want to leave enough money in your account where you could do this on a continual basis. I have stated, however, that you never want to let your risk grow to a point where it would endanger your business so a few thousand dollars in your account should always be sufficient.

In one of my stories I talk about little Jimmie buying a watercolor for $40 and immediately consigning it to another auction in the same city where it brought over $22,000. Another example was when Warner, one of my partners, and I called a man in Canada about a plaque we were considering . He said that it would be of great interest to him at a certain price. Guess what? We knew where one was being sold. After purchasing it with only one phone call it was flipped for over $3500 profit. Not bad for the time it took to make the phone call and the only real risk was if God had decided it was time to call the man home.

Arbitrage, the word even sounds great and it can be put into good use in “Your Race to the Million.”

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