Obviously, our economy is based on arbitrage. If you are going to sell something, you have to ensure that the cost of your product is lower than the cost of acquiring a customer. That's how simple it is.
Many eBay sellers do exactly what I mentioned. They purchase things for cheap from Craigslist or yard sales then turn around and list the items on eBay and sell them for higher prices.
Another example is outsourcing content for less money than what your customers are paying you to write it. In other words, if a customer is paying you $50 an article, you can outsource the work to a writer for $40/article, pocket the $10 and keep the customer and the person you outsourced the work to happy. If you do a search you'll find many outsourcing companies do just this.
A third and final example would be promoting an affiliate offer. If you are promoting an offer that pays $50 per sale and you're buying traffic for $1/click, you need so simply turn 2 out of visitors into paying customers in order to profit.
Arbitrage is always in action and its' essential that you constantly look for ways to lower your costs while increasing exposure to your product or service. Doing so will help increase your return on investment (ROI) and help you make more money in the process.
