Beware of Amazon-eBay Arbitrage

If you’re a person who tries to spend money efficiently, you shop around.  You most likely wouldn’t see something for the first time and buy it immediately.  You’d look elsewhere and compare prices for the same or similar items.  Fail to do that, and you’re asking for someone to take advantage of you.

If you have shopped around, you might have noticed some items on eBay that are priced higher than on Amazon (or elsewhere) — for the exact same item, even when it’s a new, never-used, item.

ebay_amazonThat’s “Amazon-eBay Arbitrage”.

Basically this is what’s happening: Very sharp eBay sellers, let’s call them arbitragers, “sell” products on eBay for higher prices than you would pay for the exact same product if you bought them from Amazon or some other retailer.  Not only that, but these sellers “sell” products that they don’t actually have in their possession.  They don’t order the product from the legitimate seller (by legitimate, I mean the seller who actually makes or stocks the item) until you order it from them.

The process works like this: You find an eBay listing for something you want, you order it from the eBay arbitrager and pay for it.  The eBay arbitrager then orders it from Amazon and has it shipped to you.  As long as the price on eBay is higher than Amazon’s price, the eBay arbitrager makes money.  Some of these eBay arbitragers even have computers running software that continually analyzes prices on Amazon and eBay so as to find the products with the most profit potential.

Note that this only works if you, the buyer, fail to do a little comparison shopping.  Which might happen if you go to eBay without thinking, assuming that eBay always has the lowest prices.  That’s the assumption that gets you in trouble and makes “Amazon-eBay Arbitrage” possible.

Be smart.  If you don’t want to put your money into the arbitrager’s pockets, then do what mama said, as in my mama told me … you better shop around.

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