eBay Arbitrage

[Millie]

In my recent search to replace my old Xenogears and FFT games on eBay, I noticed they were selling for considerably less on Amazon through the affiliate storefronts.

Consider the following:

- A new (factory-sealed), unopened copy of the original ("black label") Xenogears game can be purchased for roughly $100 on Amazon or $150+ on eBay.

- A used copy in good condition of that same game can be had on Amazon for $40-50, and sold on eBay for close to $75.

The margin is slightly lower on FFT, as that game was much more popular and widely available in its two printings.

I'm wondering if similar opportunities exist for other used and new rare games? I think we -- meaning "we" as an expert gaming community -- are in a unique position to value and price used games more accurately than the eBay market.

The problem is, obviously, finding similar "steals" before they dry up (i.e., before the Amazon/eBay disparities gradually shift to zero). Today there may be a huge profit to be made arbitraging Xenogears discs, but such a margin may not exist after heavy trading. The other thing to consider is the availability of such games. How many black label Xenogears discs can one really expect to find, period, let alone trade in quantities sufficient to make any real money?

At any rate, I just thought this was interesting.

[Avellon]

Sounds like an exploit.

[Millie]

It is, basically. It's a l33t exploit that will eventually be found out. Which, in a nutshell, is essentially what arbitrage is in the first place.

[Blumpster]

Welcome to the official ePSXe website

Why spend the money! (sorry, I don't understand collecting 'stuff'.)

[Hachima]

Better yet, sell the greatest hits version as the rare collectors version and profit

eBay: Xenogears PS1 Brand New Sealed Collector's Grade Mint (item 120131118984 end time Jun-18-07 18:43:51 PDT)

[Darus Grey]

Theres literally thousands of items that follow those trends millie.

[Millie]

Originally Posted by Darus Grey

Theres literally thousands of items that follow those trends millie.

Yes, but I'm focusing on video games because it's an area that I think we know really well. Versus, say, trying to beat the market on the price of pork bellies or diamonds. There is clearly an emerging market for collectible/rare/old video games in perfect or near-perfect condition, and a very limited supply. I think it can be tapped/exploited better than it has been, and the eBay/Amazon disparity is just one example.

Originally Posted by Blumpster

Welcome to the official ePSXe website

Why spend the money! (sorry, I don't understand collecting 'stuff'.)

It's not about the games as items; it's about the games as commodities. In this example, I'm not buying Xenogears to play it or "collect" it; I'm buying it because I can turn it around for a nice profit on eBay. You buy in one place and then immediately sell on another place for higher.

Originally Posted by Hachima

Better yet, sell the greatest hits version as the rare collectors version and profit

eBay: Xenogears PS1 Brand New Sealed Collector's Grade Mint (item 120131118984 end time Jun-18-07 18:43:51 PDT)

The problem is that, generally speaking, the kind of person who spends $100+ on a "collectible" game on eBay is going to know the difference between the Greatest Hits edition and the Black Label edition. This is evidenced by the fact that Greatest Hits sells for much less on eBay and Amazon, and the price differential for Greatest Hits is negligible on both storefronts.

[Renolin]

It seems like everyone who responded to this thread either doesn't understand arbitrage or completely ignored what Millie said.

I'm ready to go into business with you Millie. Let's get started. On the upside, you can start controlling the market for these things, as the available pool for rarer games is often small on sites like Amazon...

[Millie]

Originally Posted by Renolin

It seems like everyone who responded to this thread either doesn't understand arbitrage or completely ignored what Millie said.

I'm ready to go into business with you Millie. Let's get started. On the upside, you can start controlling the market for these things, as the available pool for rarer games is often small on sites like Amazon...

True. But the problem is that supply is so small that it's hard to buy/sell in enough bulk to make serious money. Unless we can all identify some more targets beyond Xenogears/FFT.

For instance, what do we know about the pricing on FF7? FF8? Anything else from back in the day?

[Ninajrr]

Well I think what Renolin may have been getting at is more of a delayed profit, similar to how collecting works, where you buyout the stock from Amazon/etc and increase demand by decreasing supply, then, when the time feels right (risk/reward) you make your move. You, as a seller, do not want to sell in bulk, but maintain the feeling that it is a rare commodity.

Still, from a realistic business standpoint, the profit margin is substantially lower than you'd expect, and risky regardless, mostly because of the limited supply and small individual gain.

[Darus Grey]

Aye...its not that people don't get it, its just unless your poor the money really isn't significant enough to go through the bother.

[Millie]

Originally Posted by Darus Grey

Aye...its not that people don't get it, its just unless your poor the money really isn't significant enough to go through the bother.

Well yeah, that's the problem I've been mentioning since the beginning. The scale is too small and too time-intensive per transaction. Which is why I wish there were a way to systematize it and/or buy in chunks and resell en masse.

The other difficulty is the fact that eBay isn't a definite and instantaneous sale, either. It would be one thing to, say, buy stocks on the NYSE and sell them in London. You can do that instantaneously. But with actual items and on an auction site, it's tougher.

Oh well. Was just an interesting thought to throw out there. I may do a little bit in my spare time, seeing as how I turned a $400 profit today* off Xenogears buying/reselling. Mostly just doing it for kicks, because the money isn't "big" enough (as of yet) to warrant anything more serious.

(*Problem being that I had to buy out a good deal of the existing Amazon stock in order to do so, and the stock isn't replenishing as quickly as I'd hoped.)

Originally Posted by Ninajrr

Well I think what Renolin may have been getting at is more of a delayed profit, similar to how collecting works, where you buyout the stock from Amazon/etc and increase demand by decreasing supply, then, when the time feels right (risk/reward) you make your move. You, as a seller, do not want to sell in bulk, but maintain the feeling that it is a rare commodity.

Still, from a realistic business standpoint, the profit margin is substantially lower than you'd expect, and risky regardless, mostly because of the limited supply and small individual gain.

Yes, I agree, and I think it's certainly capable of being done with something like Xenogears, whose total supply is already very low to begin with. But you have to wonder: is the "value" of a Xenogears black label disc already about as high as it's going to get? It's a 10-year-old game already, and it's only selling for $150 tops. As you said, I don't see an enormous margin to be gained from buying and holding as an investment.

Short-term arbitraging, on the other hand, would definitely make sense (because an immediate $50 per-unit profit is a nice margin). But then we're back to the "not enough to buy/sell in bulk" problem. It's the problem I ran up against this afternoon when trying to put this theory into practice. Like I said: I did quite nicely up to a point, but now I've run aground for lack of more units to move.

[Aulirophile]

I have known people who do this with NES/SNES games (original FF6s are like their holy grail). Their source is usually flea markets/garage sales. It does work if you build up a long list of which games will go for what and then always buy anything you see under that. It is time consuming though and I don't think it can be a "make money in spare time" type of thing. Not signifigant money anyway.

It actually sounds like it'd be a lot of fun to try and work it out though. I have an eBay account with 100% positive feedback in the 200-300 range that used to be a Power Seller (think it might still be tagged, takes them a while to remove it), that I'd be happy to use for the enterprise.

[Everlast]

This is a very popular thing to do on Ebay, I researched it a few years ago when I wanted to purchase a car. I did a little bit of buying cheap and reselling with Magic: The Gathering Cards and made a pretty decent profit. I stopped once I purchased my car (I only made like $500 from the buying and reselling on Ebay, but I only needed about $500 to cover the last amount of cash I needed).

When I did this it made my dad took notice, and he started to do the same thing. He bought and sold football cards and sports memorabilia, at first he didn't churn any profit. Eventually after losing some money he began to build a list of contacts the creme de la creme of Ebay card trading. He made friend with a few people who actually knew the football players, these people would send us awesome shit for free, or give my dad great deals on items/game tickets.

Now he make a lot of money off of Ebay, and only does it on the weekends when he is not at work. Like any job profiting off of Ebay is very easy to do if you have a good business plan and the ambition to follow through with it. If you have the time to do it, it is pretty easy to be successful with.


*Another thing I have heard of people doing, is making deals with local stores. I.E; If you hold 50 cookies for me I will place them on Ebay for $3 more than they are worth. Whatever cookies sell I will purchase from you, those that do not I will re list and try to sell at another time. It guarantees the business owner some profit and steady sales, and your only doing minimal work for decent profit over time.

[Avellon]

In the vein of old or rare games, one game to look out for for anyone interested is Marvel vs Capcom 2 for the playstation 2. Capcom only made some 10000 copies in North America and it now goes for around $100.00 or more a pop on ebay.

So if you happen to find a good condition game at a garage sale or somewhere else it might be worth to pick up