Arbitrage from a Non-Arbitrageur

Arbitrage is a form of taking advantage of a price differential between two or more markets. An example online is buying traffic at one price and then converting that traffic to a higher click value. Traditional Arbitrageur’s online use strictly CPC to make money, as a Non-Arbitrageur I would use affiliate marketing instead to maximize revenue.

So how do you get started?
Being an arbitrage is much easier then you think. You don’t need to have a big bank roll to get started. Actually most get started in small scale and grow as they make money.

So step one is to pick a niche. I like my wii so for this example I am going to niche my site on wii games and accessories. I am going to use the high paying affiliate links to make money in that niche.

Selecting a domain and hosting. Every good niche site should have it’s own domain. So for this site I will buy the domain WiiFunWorld.com (yes I know it’s not owned) and purchase a great deal on hosting for a blog. The reason I would use a blog is they are easy to manage and there are tons of free themes. I can get a new blog site online in less then 24 hours.

Setting up your blog to get content. People don’t click on your page unless there is some content. To get some content I would use a digest of other wii news related sites that have an RSS and pull the content in with the FeedWordPress plugin. I would also be sure to have the All in One SEO Pack and WordPress Affiliate Pro Plugin installed in my blog.

Getting traffic to my site. This can be the most difficult part of any site. You can buy traffic cheap from several places like Google or now even Facebook. Not all traffic is created equal so be sure to test each in small batches to see the quality of that traffic.

Set it and forget it. So now that your site is ready to go you should literally be able to set it and forget it and let that money trickle in.

Wait where is the money?
Okay so here is some rough math for you to contemplate.

Okay so let’s say we going to spend no more then $5 per day at Facebook and spend $0.01 per click and buy some $0.05 ad words on Google to push traffic to the site. Now that we have 500+ visitors coming to the site at a cost of $5-$10 per day. We are going to sign-up as an affiliate for example at Gameznflix that pays $10 per sign-up. Let’s say we do an average of 1% cost per action (CPA) a day that means we have now made $40 a day or $1,200 a month. Convert that into a year and you just banked $14,400.

These numbers I just made up and I’m not an Arbitrageur. If you are an Arbitrageur what is a realistic CTR?

This post was guest blogged by Gary Jones from BlueFur.com. BlueFur provides Dedicated Servers in Canada like the one that runs John Chow’s site.


99 thoughts on “Arbitrage from a Non-Arbitrageur”

  1. ‘Set it And Forget It’ – Quite possibly the most appealing plan ever.

    1. Although it sounds a bit too good to be true…is anyone actually doing this and if so, is it actually possible to get the traffic that cheap? do tell, do tell.

      1. Steven says:

        Your link to Google was to adsense and not adwords. Next, Never heard of that gaming affiliate site. Realistically the CTR is under 1%. As a matter of fact, you’ll probably get closer to 0.10%

        1. 30 Day Man says:

          Thats a really good post that lays out the process well. Simplifies it to a real good level for beginners. Cheers.

    2. I’d not say forget it actually, if arbitrage was just that easy everyone was going to make money that way. It takes much more effort and analyzes, tracking where you spend money, which sites sends the traffic that converts and which affiliate program converts best, which keywords bring the right traffic for spending less money etc.

      Arbitrage is a combination of statistics and calculation, it is not easy as pie as it might seem but there is money such way of arbitrage.

      1. That’s why I never used the word realistic. I don’t think there’s any reputable income stream that you can ‘set and forget.’

        1. True on that, and heck some times It seems as I have typed with my feet, last phrase “there is money in arbitrage and affiliate” is what I meant to say.

    3. To be a very successful arbitrager, you need to monitor keyword costs with a fine tooth comb. Find the losers and watch the winners.

      A good use that affiliateunleashed.com will provide once it’s released πŸ™‚

      1. Etienne Teo says:

        i am very confident with your words and i believe that looking at keywords are what you need.

        1. Steve! says:

          Not really. Google isn’t SO concerned about them anymore.

    4. Shaun Carter says:

      “Set it and forget it”

      Sounds like a Ron Popeil rotisserie commercial.

      If there’s one thing you can’t do with arbitrage, it’s forget it. It needs tweaking on a regular basis to stay profitable as trends change.

    5. If you don’t set it right then forget your money.

    1. It appears that “second” would have been the correct wording…

  2. Turk Hit Box says:

    Arbitrage rules, group of my health sites can easily make $2000 (without cost) a month.

    1. Wow that is really impressive. πŸ™‚ Congrats!

    2. MoneyNing says:

      Good for you that you found a niche that works for you!

    3. PinoyTech says:

      That’s interesting. And I thought arbitrage caused money (a few)

  3. Karol Krizka says:

    You might want to fix the link for WordPress Affiliate Pro Plugin. While I don’t mind that it currently points to my TTZ Media Product Showcase plugin πŸ‘Ώ , some readers might get confused.

  4. 10KPortfolio says:

    Good post…You make it sound so easy!

  5. I’m just learning this whole new world of Arbitrage. It sounds so simple. Find cheap traffic and convert it to clicks on higher paying ads.

    Why does Google frown on this anyway? ❓

    1. brad says:

      Because many people are using this method to drive traffic to their adsense ads, (MFA: Made-for-adsense), And many of their sites offer LITTLE to NO-VALUE, ads everywhere, mainly tricking the user to get clicks. In the end the advertisier’s dollar get’s ripped off b/c of the tricked /and or low quality clicks.

  6. Guillermo says:

    And as ease as that… Set it up, get the cash… OMG! And I’ve been fighting with my content for 3 years!!

    I’m closing my blog tomorrow and open an iPhone one… And F… the content!

  7. Chad says:

    CTR isn’t your main problem, it’s your unrealistic traffic figures. You can’t buy traffic that cheap. In most niches your ads would appear on page 10 for that price. You might get 2 clicks a day.

    1. Nick says:

      the cheapest traffic I have been able to buy on facebook was .10 a click. You would have to have a crazy CTR to be able to get .01 per click

      1. Gary Jones says:

        I tested and continue to use facebook for traffic and get lots of clicks for 0.01 per click.

        1. Kabatology says:

          It could be good to know how many pageviews you get from Facebook or how long the visitors stay.,,,

      2. Demographics is a big part.

        If you target everyone in the US… you’re in for more expensive clicks.

        Also think about keyword targeting. πŸ™‚

  8. I’ve been thinking of setting up a whole empire of these in my part time. Haven’t done any yet. I’m still focused on my hunting tips and news blog. I probably will do some in the future. If you only get $10 a month with a site that required only a one to two hour set up, your $ per hour is pretty much umlimited. Multiply that by one hundred you have $10,000 a year coming in and it took you only 100-200 hours. Thats over $100 per hour. These stats can be increased if you use the right keywords or put a little more effort in marketing each site. But it’s still probably the easiest way to make money blogging.

  9. Joe says:

    Again, another interesting concept, but probably more difficult for people just starting out. I may consider this still..

  10. Rob Schultz says:

    Very very interesting article, however, like the others, I find it impossible to get traffic that cheap. I’d love, however for someone to chime in and prove me wrong…I’ve got a great Wii domain that I’ve been meaning to do something with! πŸ‘Ώ

  11. Well, interesting post, but if I were you Gary, I would forget the ‘automated blog’ idea for arbitrage. I used a simple html website back in the beginning of august to make $1500 in a few days with arbitrage.

    1. MoneyNing says:

      And you didn’t continue and just quit your day job??

  12. Marvin says:

    forgive me for being such a noob, but what is the fundamental difference between being a arbitrageur and an affiliate marketer?

  13. dave says:

    Nice post! Too bad you didn’t use my Wii website url instead! Although it is not a blog. πŸ‘Ώ

  14. Arbitrage has been around for years, nothing new (not that you’re saying its new) but the days of making lots of cash with arbitrage are gone. The ones who do make money of it are the players that have been in it for a long time. Comes down to getting cheap traffic and like many in this post comments have said, those days are almost gone as well. If you want to make money with an affiliate offer executing the arbitrage plan, you’re going to have to find a creative banner or text link that converts extremley well.

    1. Shoemoney still makes quite a lot from it still from what I understand.

  15. Chris says:

    We’ll just have to see about that.

    chris
    http://www.wiifunworld.com

    1. MoneyNing says:

      Good job buying it πŸ™‚ It’s free traffic!!!

  16. Zac Johnson says:

    WiiFunWorld.com… now it’s owned! (not by me though)

  17. nickycakes says:

    ROFL, yeah good luck paying 1 cent per click on facebook. Gotta love people who rehash crappy ebooks for blog posts.

  18. Edgar says:

    Is harder than it sounds . I have been learning about PPC and its hard. and by the way I Own PlayNintendoWii.com in case any one wants to buy from me .. let me know

  19. Chris says:

    I got it. I’m gonna try a little Arbitrage and some affiliate marketing.

  20. Joe says:

    Why are we reading a post about arbitrage from a non-arbitrageur?

  21. Joe says:

    This wasn’t a post about arbitrage…it was more like a post to get you to buy a website and hosting from bluefur, by convincing you how to make a quick buck, obviously it worked, WiiFunWorld.com was boughten πŸ˜€

    1. Gary Jones says:

      Damn you figured out my evil plan 😈

      or

      Perhaps I thought a lot of people that are not Arbitrageur’s are not aware of how easy it is.

  22. Samer Bazzi says:

    Gary explained the concepts well. No reason to bash the guy. I agree that traffic is the hardest part here. Buying would be the best option but the CPC is a bit unrealistic.

  23. Shaun says:

    I’m with Marvin – Arbitrage sounds EXACTLY like affiliate marketing.

    What’s the difference?

    Is Arbitrage when you use a CPC offer on your site? So you are paying (for example) $0.05 in Adwords per click, but receiving $0.15 from your CPC offer per click, thus earning a sliver of money?

    Seems to me that this is just affiliate marketing with insanely smaller margins, more risk, etc.

    Someone, please, clue me in.

    1. Abitrage essentially is affiliate PPC marketing.

  24. Dave says:

    Interesting article, but what are the legalities in regards to using other sites RSS feeds as content? That hurts other sites too because of duplicate content on Google right? Isn’t this something a lot of the bigger bloggers hate because their content is getting stolen?

    1. Gary Jones says:

      I would not steal the content but provide a digest version that links off to the real site. This is what Digg for example does except it is user submitted.

  25. Doug says:

    I use to make pretty good money (over 10k a month) with arbitrage, but 3 times I received the MIGHTY Google SLAP and my income went to next to nothing. Each time I was able to build it back up again, except this last time (about a month ago) it does not seem to be working too well. I have decided to pursue other avenues now.

    1. Gary Jones says:

      This is why I would use affiliates and not Google.

      Google hides behind template emails and dehumanized responses. There is better money to be made with CPA.

  26. Steven says:

    Affiliate arbitrage can sometimes reach phenomenal CTR’s, but this is throuh a LOT of testing and a LOT of clever thinking; i.e. finding original keywords and tricky ways to attract interest.

    If anyone’s interested in learning about some of the bigger concepts of arbitrage, check out http://www.uberaffiliate.com . Paul has some GREAT insights and gives the reader an inside look at his ‘super affiliate’ gameplans. Why he’s giving out so much information, I don’t know, but it’s all worth a read. Even a non-arbitrager like myself has picked up a few things.

  27. The Kid says:

    Great post Gary becareful with traffic quality with higher quality traffic you will get paid out more, try to aim for 50-200% ROI or it’s just a waste of time!

  28. GemViper says:

    Now thats a perfect recipe for ruining the internet for everyone.

    When the percentage of arbitrage sites on the web goes up, the amount of advertising dollars available to spread around don’t go up to match it, instead they go down or head to only proven, non spam promoting webmasters.

    Quality affiliate programs are about to get harder to get into, arbitrage is just one of the reasons why. You’ve been warned.

  29. GemViper says:

    Specifics:
    – 1 cent clicks from facebook? not since 8 hours into the first day the program launched, actually shoemoney helped close that down by abusing it to an extreme degree. Kudos to facebook for shutting him down in record time.

    – 5 cent clicks on adwords? perhaps for the top 1% of the elite top quality sites but not for any insta created arbitrage sites.

    – 500 visitors a day? Try 5 to 10 and none of them will come back.

    I’m not bashing Gary but the recipe described has been long gone for years. Webmasters have covered all of the grounds, there are no secrets, and advertisers got wise and cut into those massive profit ideas a long time ago. You can still make money with arbitrage, but you’ll earn it and it won’t be massive amounts or easy and when labeled as an arbitrageur you may not get out of the black lists for years even on your quality sites.

  30. GemViper says:

    Triple post, sorry, but I have a question.

    Gary, is BlueFur accepting webmasters who want to set up arbitrage sites? It’s usually not very long before someone complains to the site host about the poor quality of those sites, the stolen content, etc..etc… If BlueFur is accepting such sites and will ignore complaints, you’ve got a long list of ready customers I think.

    1. Gary Jones says:

      I would love to discuss our options for people in to arbitrage if you want fire me an email to gjones at bluefur dot com.

      As for dealing with complaints we require a Canadian court order before we remove content from a server unless it is blatant illegal content.

    2. Greg G. says:

      I don’t think it’s that hard to do arbitrage without relying on stolen content. “Quality” is another thing altogether.

  31. Kabatology says:

    Get traffic, buy traffic, get traffic. How it sounds so easy 😳

    1. PinoyTech says:

      Unfortunately, it’s not that easy if you’re new and just dipping your fingers. There’s a lot more to learn I think.

  32. arbitragite says:

    I know arbitrageurs making 6 figures a month with much of their income coming from buying clicks in the 1 to 3 cent range.. it can still be done, you just need to know how to do it.

  33. Dan says:

    It wasn’t shoemoney that took adv. of facebook, it was Uber Affiliate… he just guest posted it on shoemoney.

    1. GemViper says:

      I stand corrected, no offense to shoe either way.

  34. Hmm…I thought Google Adsense frowned on this practice…maybe I’m wrong

  35. Does anyone know if Adword arbitrage is considered a violation of Google TOS?

    1. PinoyTech says:

      I am really not sure. I have heard that it is.

      I have also recently read an ebook saying that it’s not.

  36. rodel says:

    mmmm.. well it might be gone in the west but in the orient.. let me try this one..:) like how uber did prior to his launching.. :mrgreen:

  37. rodel says:

    i mean, in the west but not in the orient.

  38. globusnet says:

    Thanks for plugin list! πŸ™‚

  39. HMTKSteve says:

    1) You are telling people to scrape content from other sites to fill your site. that is plain wrong.

    2) Arbitrage on Wii? How can you make any money on it if people can not buy it? No one has them!

    3) You can’t write very well.

  40. Sounds like the Google Cash method for blogs.

    It’s just a basic PPC strategy. You gotta be a little more creative to make money in PPC these days. Research and tracking and split testing and …………

  41. This is not for me thank you very much. Are you into in John or are you preaching what you don’t practice? πŸ˜‰

  42. Mike Huang says:

    With a blog so huge, of course someone is going to take that Wii domain. If this post had a backlink, he would have visitors quick πŸ™‚

    Anyways, this is a great post Gary.

    -Mike

  43. Vienna says:

    Ar…arb….arrbit….arbitrageur.. Arbitrageur!
    You can make it so simple but I is it really that easy? 😐

  44. This is not arbitrage at all and seeing how your post title is “Arbitrage from a Non-Arbitrageur” I hope noone really listens to it.

    The art of Arbitrage is buying low and selling high, but a 1% CTR is WAYYYYY Too low. I do CPC arbitrage and hit 30-40% CTR on my keywords. paying 2-5 cents per click and making 0.50-1.00 per click in adsense. I had wrote the ebook http://www.earnwitharbitrage.com but have recently sold the rights to it. I detail exactly how to make money in the book.

  45. Terrence says:

    I know of companies that have literally made fortunes off of arbitrage like you talk of. It can be very profitable, you just have to find the right niche.

  46. Netvestor says:

    Interesting concept, I am setting up a test to see how this works.

  47. Poker Sharks says:

    Why would a hosting company wite about these spam sites and not even know an about CTR? Quick search on Google would have told you.

    Anyone following that little plan will fail, thats for sure – copying other peoples wii content is just wrong too. Suprised John let you post that!

    $14k a year from one wii site, um no. If you make 10% of that you’re doing super well. Set up another 100 of them all performing well and then maybe.

    Shoudl have just stuck with John ads for the $10 deal, is a more blatent advert, but better than a half assed post.

  48. geomark says:

    This isn’t arbitrage, it’s affiliate marketing, plain and simple. The first two sentences define it correctly “Arbitrage is a form of taking advantage of a price differential between two or more markets. An example online is buying traffic at one price and then converting that traffic to a higher click value.” It involves like-kind buying and selling, not buying PPC traffic to sell affiliate products.

    1. Totally agree. Arbitrage is when you buy from one market and sell the exact same thing in another market for a profit. Here you’ve added value by having a website offering a different product that people want to buy. That’s a proper business plan with risks involved. Saying this is arbitrage is like saying Amazon is an arbitrage – they get free traffic from free publicity and people buy things from there – huh??!

  49. zaki says:

    A million thanks for the details. I think University of John Chow should be established. It must have internet, blogging syllabuses etc…

    What do you think? 😈

  50. On my reckoning if you get around 2% you are lucky. You can not just set it up and forget it either. A lot of work is needed to be done which will eat into your time which can be made better use of.

  51. Great plugins i use most of them and can tell that they reall yhelp in getting higher listing in search engines.

  52. oyunlar says:

    Nice very nice …. A million thanks for the details… thanks

  53. John says:

    Arbitrage used to work well before the google smart pricing kicked it.
    I used to have a wedding related website that made about $200/day profit for about 2 years.
    I would bring in about 2k visitors in with spending about $60/day on adwords, then have them look at some pictures, read related articles and click on my adsense ads.
    Now getting cheap traffic is much harder. Adwords is bringing me traffic in at 20 cents/click. The messed up part is that they say my site is not relevant to the keyword that I am placing the ad for, but at the same time, I am ranked #3 on google’s natural search ranking for that specific keyword.

  54. Highly unrealistic and impractical post. You will NEVER EVER get 500 visitors a day for $10. I hope no newbies fall for it.

  55. This post is good as far as helping beginners THINK about ways to make money online. However, it is another perfect example of why there is NO SUCH THING as a simple, step by step method to making real money online. If a method really is that simple, and is laid out step by step for a large number of people to see, then that method becomes unprofitable (you may be able to eek out a couple bucks a month in some cases). However, if you can INNOVATE and put your own twist or own ideas into the method, and yes that means actually THINK and put in EFFORT, you may be able to take what is laid out in this post and make some money afterall.

  56. David says:

    Excelent post!
    And please, Mr. Jones, what about this…
    Why not to buy 10000 clicks for $0.01 per click?

    Use excelent copywriting techniques, choose best affiliate programs in the industry, reach 3% conversion rate and $100 affiliate commission – it means $10.000 profit every day, $300.000 profit per month, $3.600.000 for year! And listen, if you just set it and forget it, how many websites like this can you own? 100? 1000? WOW! πŸ™‚

    Do you think, it is stupid idea? Yes, it is. Same like your whole article. πŸ™‚

    Why do you mislead people who are looking for quality information how to make living on the Net? Do you know, that some new people here can use your “idea” and will spend time and money on it? Did you even realize, what loss and flustration it can bring to their lives?

    AND please, WHY you as Non – Arbitrageur are writing an article about Arbitrage???

    So please, next time, if you will have another excellent idea, please, try it first and then share with us your results.

  57. K. Scott says:

    Set up a quick site with scraped, 0% original content, then embark on a campaign to convert AdWords traffic into AdSense clicks and affiliate commissions. Congratulations, you have written an excellent tutorial on how to set up an MFA site, with zero good intentions of creating something that provides genuine value to the visitor.

  58. Israel says:

    kool advice. thanks for the affiliate program. i plan on using it.

  59. Greg G. says:

    Most of my experience with arbitrage is just in actual product- the old Buy Low, Sell High with physical products. I haven’t done too much in the way of arbitrage with website traffic/ads. Again I prefer to convert buyers of products- only this way its products I don’t personally handle.

    I know a lot of people on a lot of sites and forums that do MFA and use PPC arbitrage at low margins and are happy making $1 a day in Adsense over ppc costs. However, I prefer selling things for $50-100 and up that convert highly targeted traffic ( or things I could buy for say $50 and sell for $100 with little expense) rather than accumulating pennies.

    That said, ‘arbitraging” to affiliates might be a little better than how most do with CPC. I know of people who make real money on fairly low CPA programs with all paid traffic. In this sense a lot of Affiliate Marketing could be considered arbitrage- though i’m not sure I’d call it that. And I certainly dont see converting natural traffic into earnings as arbitrage.

  60. Wakish says:

    The best way to know if this system works, is to actually test. And this is something I’m going to do.. Infact I came over an ebook on arbitrage, this article above has really drawn up my curiosity this time!
    Once the blog setup.. I will monitor the traffic..etc
    In due time, I will conclude about my observations on my blog..

    – Wakish –

  61. Pingback: InvestorBlogger

Comments are closed.