Ebay Lot Freebies – An Arbitrage Freebie Strategy

A “lot” or “wholesale lot” on eBay is when multiple items are packaged together in a bulk sale. You can get eBay lot freebies by a practice called “arbitrage”. Arbitrage is when you trade an item of value for another item of higher value, or when you up-trade to gain an increase. It is a word that is commonly used with traders in commodities and foreign exchange markets. However, it can be used in any market, especially in markets where trading (not just buying and selling) takes place. Read more about arbitrage. Ebay happens to be a market where buying and selling take place, so the intermediate step of cash is involved in this form of arbitrage. Arbitrage is closely related to wholesaling and it is sometimes combined with wholesaling.

There are two ways to get eBay lot freebies with arbitrage. One way is to buy an entire lot, keep one or more items and then sell the remaining lot for the same price in one transaction. The second way is to buy an entire lot, keep one or more items, and then split the lot into multiple transactions. The latter closely resembles wholesaling, but it’s not really wholesaling unless there is a monetary profit. When it’s arbitrage, you’re generally breaking even with cash and getting stuff for free.

Here is an example of arbitrage using eBay lots: You buy 47 blu-ray discs for $55 total including shipping; you keep two of them and then sell the remaining 45 blu-ray discs lot for $55 plus shipping. For this example let’s say shipping was $10. This means you purchased the lot at $1.17 per disc and sold the lot at $1.44 per disc, which is still a good wholesale price for blu-ray discs. It takes some skill to know that it will sell even if you reduce the size of the lot. You have to know the prices well before and after you buy. Since you broke even and ultimately had no out of pocket costs, you were able to obtain two free movies.

Here is another example of arbitrage by splitting an eBay lot:  You buy a lot of 3 video game consoles for $200. You keep one video console, then sell the other two for $100 each in two separate transactions. Again, since you broke even and ultimately had no out of pocket costs, you were able to obtain a free video game console.

Here is an example of when arbitrage is combined with wholesaling: You buy a lot of 1,000 baseball cards for $1,000 ($1/ea), then sell 750 baseball cards for $2 each ($1,500) and keep the other 250 baseball cards. In this case you’ve gained a $500 monetary profit by wholesaling and 250 baseball cards by arbitrage.

When making cash transactions there is always the possibility that the strategy won’t work. When it doesn’t, you’ll be paying out of pocket, which is not actually free. That’s why part of the skill and art is knowing the prices of the items you’re dealing with.

Actual Case of eBay Lot Freebies By Arbitrage

When I used this strategy, I was able to get the following video game consoles, accessories, and games for free:

• Xbox console
• Three Xbox hand controllers
• Four Xbox dance pads
• Xbox microphone
• Xbox DVD player kit
• Seven Xbox games
• Nintendo 64 console
• Four N64 hand controllers
• Four N64 games
• Mario Paint and Accessories, with mouse and pad for Super NES
• Super NES converter for plugging in up to 5 controllers
• Eight Super NES games, including multi-player games with up to 5 players
• Converter to play Gameboy games on Super NES
• One original Gameboy game.

This was during the first-generation Xbox, PS2 and Nintendo Gamecube era (before current game systems). I was an undergrad at the time, so I wanted to get games that guys and girls could play in multiple numbers for parties and game nights. During the entire process I discovered accessories that I didn’t even know existed, such as the converter to play Gameboy games on Super NES or the converter that allows more than 2 players on some Super NES games. Many of the games were also very popular classic games that sell for high prices as stand-alone items, like Mario All-Stars. Some were very specialized types of games, like Dance Dance Revolution and Karaoke Revolution. The whole set is probably worth at least $300, maybe more at the time it was obtained. It took about 2 months to accomplish the entire task on the side (in addition to studies and personal life).

Advanced Tips

The more familiar you are with eBay, the better you’ll be able to use it to find opportunities. Get eBay tips from any and all sources that you can.

Since there is some risk involved with this strategy, I can’t emphasize enough that you should do your research and know the prices well. If you’re not familiar with the market for any particular item, then you must become familiar first, before you buy anything. You’ll be searching for lots on eBay that might have something that you want, but you won’t purchase the lot unless the numbers are right. You can’t simply buy any lot you see and expect this to work. You have to know that the reduced lot will sell at the same or better price or you will be spending out-of-pocket.

You can find eBay lots by going to the site map on eBay. For each category, there will be “lots” or “lots & wholesale” subcategory.

I could see this strategy working with Craigslist as well as eBay. Also, you don’t have to stay in the same market if another market presents a better opportunity. For example, you might buy a lot at a swap meet and sell it on eBay, or vice versa between the two markets.

You could combine this strategy with other strategies, like trading and bartering.