An Introduction to Service Arbitrage

Earning a passive income may be synonymous with making money from a digital product or affiliate product but that is far from the only way you can make money while you sleep and travel.

In fact, what you’ll find is that it’s actually possible to make a passive income even offline! This is something we consider a lot less often but the strategy simply involves building a business that can eventually run itself. You hire staff and you train them up to replace you, so that eventually you can run the business while having very little actual input!

The same thing works online but you can get there a lot quicker by using freelancers. And this is what we call ‘arbitrage’.

What is Service Arbitrage?

The term arbitrage normally refers to trading and it effectively describes taking advantage of different prices in different markets. So for example, you might buy a product from one market and then sell it to another for more. This could mean stocks and shares or it could mean currency even.

So what is service arbitrage? Hopefully you’ve already guessed that this means buying and selling services, while scraping off a profit for yourself.

If you can find a client who is willing to pay $4 per 100 words for content writing and you can find a writing service that is willing to offer their writing at $2 per 100 words… all you need to do is act as the middle man! You simply look for the clients and then pass their order on to the writer – without even necessarily explaining that the work isn’t for you.

Better yet, is that you can automate even this small amount of work by using online tools that let you schedule tasks. Find long term clients and let them use these programs to schedule work, then use the writers to write the content for you.

The same of course works with a huge number of other services – from web design to video editing!

How to Find Cheap Services

The question is how you find the work and how you find the clients. That’s up to you but there are a few things to note that can help you.

Firstly, know that ‘white label services’ are services that are actually designed for this very purpose. If you can find white label web design services for example, then that means they expect you to hire them to do work for other people… and the prices normally reflect this!

You can also find cheaper labor by looking for students (and offering it as ‘experience!’) or by looking for services from other countries where the money is worth more.

You should also make sure to try different websites. Webmaster forums for example will often have a lot of more affordable services when compared with freelancing sites. So you can find work on the freelancing sites and then hire workers from UpWork or Elance!

There is a lot more to service arbitrage but hopefully this short introduction has given you enough information to decide if the strategy is for you!
