What is arbitrage?
Definition:
The buying and selling of ‘something’ in different markets in order to take advantage of differing prices for the same asset’
Almost everything in modern society, involves a form of arbitrage.
In business particular, goods and services are exchanged in order to make profits, so long as there is more value to the end consumer.
Recently I have been experiencing the full effects of arbitrage, since I have been reducing my possessions.
My thinking was instead of dumping into the ground, perhaps there would be value to someone else.
To my surprise, I had demand for certain items that truthfully I presumed to have zero value.
This made me realize the concept of how arbitrage exists and the depth of the core principal in every aspect of our society.
Fundamentally, a business would not be created if there were no opportunities in difference between the bought and sold of goods.
Here’s the twist – Arbitrage is more than money.
We may not realize;
- Attention
- Time
- Labour
Are forms in which economic value is now derived from.
The rise in media & tech companies have made our attention a rare commodity to control.
If you have a 9-5 job you trade your time in exchange for a salary.
People who do contract work, pitch and bid on jobs to complete using their labour and skill.
Arbitrage is everywhere.
The question you may be wondering is, how are you going to leverage it?
The beautiful thing about the internet is… unlimited arbitrage in the form of leverage, which is the immense scalability of potential reach.
The internet has made infinite opportunities because of the accessibility to niche groups of people.
Why this matters – before if you had an unique interest, you would be limited to geographic distance to connect with others.
Now if you identify with a niche and it is a large enough group of people – you have enough to sustain a business.
As a result you have infinite opportunities to now monetize to other markets.
Takeaways:
- Opportunities exist everywhere.
- Pay attention to what you arbitrage. Your time, attention, labour are valued resources that can be exchanged
- The internet has created infinite arbitrage opportunities
