Arbitrage from a Non-Arbitrageur
written by Gary Jones
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.
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‘Set it And Forget It’ - Quite possibly the most appealing plan ever.
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.
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%
Thats a really good post that lays out the process well. Simplifies it to a real good level for beginners. Cheers.
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.
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.’
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.
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
i am very confident with your words and i believe that looking at keywords are what you need.
Not really. Google isn’t SO concerned about them anymore.
“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.
If you don’t set it right then forget your money.
First
It appears that “second” would have been the correct wording…
Arbitrage rules, group of my health sites can easily make $2000 (without cost) a month.
Wow that is really impressive.
Congrats!
Good for you that you found a niche that works for you!
That’s interesting. And I thought arbitrage caused money (a few)
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
, some readers might get confused.
Good post…You make it sound so easy!
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?
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.
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!
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.
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
I tested and continue to use facebook for traffic and get lots of clicks for 0.01 per click.
It could be good to know how many pageviews you get from Facebook or how long the visitors stay.,,,
Demographics is a big part.
If you target everyone in the US… you’re in for more expensive clicks.
Also think about keyword targeting.
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.
Again, another interesting concept, but probably more difficult for people just starting out. I may consider this still..
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!
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.
And you didn’t continue and just quit your day job??
forgive me for being such a noob, but what is the fundamental difference between being a arbitrageur and an affiliate marketer?
Nice post! Too bad you didn’t use my Wii website url instead! Although it is not a blog.
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.
Shoemoney still makes quite a lot from it still from what I understand.
We’ll just have to see about that.
chris
http://www.wiifunworld.com
Good job buying it
It’s free traffic!!!
WiiFunWorld.com… now it’s owned! (not by me though)
ROFL, yeah good luck paying 1 cent per click on facebook. Gotta love people who rehash crappy ebooks for blog posts.
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
I got it. I’m gonna try a little Arbitrage and some affiliate marketing.
Why are we reading a post about arbitrage from a non-arbitrageur?
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
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.
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.
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.
Abitrage essentially is affiliate PPC marketing.
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?
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.
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.
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.
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.