Is This a New Secret Business Model?!?

There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this new series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!

CapForge Founder and Owner Matt Remuzzi reacts to the product arbitrage business model.  

Video Transcript: 

Business Advice Video: 

I haven’t seen anyone talk about this business model. This is a brand new secret business model, where you can get started today and make $10,000 a month minimum. The best part is you can get started for absolutely free and in less than a minute. This is called eBay arbitrage. Take a product that isn’t too popular of a brand and then head over to eBay and copy the exact same title, description, photos, copy, everything the exact same but mark up the price. Now because eBay has such a strong marketplace with over 50 million unique visitors to their platform every day this gives us an audience to market our product to any money on ads. Now all we have to do is wait for a buyer search for the product that we’re selling and purchase it from us. And then we head over back to Amazon, purchase the product from Amazon, and ship it directly to the customer.

Matt’s review:

Okay, well, to say this is a secret business model that no one else is talking about – wrong! There’s a million people talking about doing product arbitrage and this is not unique, this is not special, and this is not smart. If you’re finding a product on Amazon for 20 bucks and then you go to eBay and list it for 30 bucks, why isn’t the person finding it on eBay also looking on Amazon and just buying it there themselves? And even if they bought it from you on eBay at 30 bucks after you pay eBay’s fees you’re making two or three bucks for the product. And yes you’re saving on ads but you’re also waiting for them to search for that specific product and buy your listing. You think you’re the only person on eBay selling that product? The guy who’s selling it on Amazon for 20 bucks is probably also selling it on eBay for 20 bucks, so why are they gonna buy it from you on eBay for 30 bucks when they can buy it from a guy on eBay for – this, this doesn’t make any sense. You’re not adding any value. The essence of business is that you’re doing something that adds value, that’s the part you’re charging for. If you’re not adding any value then why would anybody give you the extra for it, right? That’s the whole point of business. Even if it’s a product that you didn’t make and you don’t own and you just bought at retail, you have to add some value. 

Here’s an example, when I was in Nepal and I was hiking and we were way up in the mountains to get a bottle of Coke was three or four dollars, even though down at the bottom of the mountain that same bottle of Coke might have been 50 cents. So why was it three or four dollars at the top of the mountain and 50 cents at the bottom of the mountain? That difference was the cost that it cost some guy to buy a case, put it on his back, and carry it all the way up the mountain. That’s the extra that you’re paying for. But if you’re putting it on eBay that takes two seconds and you’re buying it from Amazon which takes two seconds for you to do, you’re not adding any value there. You’re not making it any easier for that customer to get that product. You haven’t climbed up the mountain with that product to deliver it to them. So if you’re not adding any value why would you expect somebody to pay you more for it? Yes, a few people will stumble along “Oh that’s what I wanted. I don’t care about the price, I just want it now.”, and buy it. But it’s not how you make a business and it’s certainly not a business that guarantees you a minimum of $10,000. That’s there’s no –  first of all, there’s no guarantees of any minimum. Why do people always pick a number like 10,000? Why couldn’t it be 8,000 why couldn’t it be 12,000 if you’re gonna make up a number? But I guess a round numbers sound better. But if you wanna get into business think about how you can actually add value to something. Whether it’s a product somebody else made or a product you make and then charge more than it costs you to add that value. And now you have a real business but this business A) is not secret and B) is not something to waste your time with.