I’ve come to the conclusion that there are two basic forms of arbitrage:
Simple Arbitrage and Value Enhanced Arbitrage
First let’s define the word Arbitrage.
“In economics and finance, arbitrage is the practice of taking advantage of a difference in prices in two or more markets; striking a combination of matching deals to capitalize on the difference, the profit being the difference between the market prices at which the unit is traded.” – Wikipedia
In my own words, Arbitrage is the act of buying something at one price and selling at a higher price for profit.
Almost everything that is sold, anywhere, is a form of arbitrage, whether it’s simple or value enhanced. Let me give you an example…
Simple Arbitrage Example:
Someone buys a beautiful piece of raw oak and resells it to a custom woodworker for a higher price.
Value Enhanced Arbitrage Example:
A woodworker buys a beautiful piece of raw oak, creates a custom sign and sells it for a higher price.
I’m not so interested in simple arbitrage because there’s no extra value added to the end client, except for the fact that they found and brokered the deal.
I am extremely interested in Value Enhanced Arbitrage. In fact, that’s what I do…all day, every day.
For my Clients I…
- Find US-based, English-speaking and Educated Executive Assistant talent.
- Personally match, only the best, EA candidate with that specific client.
- Provide them with an ever-expanding toolkit via this weekly email and personal consults along the way.
- Provide on-going recalibration support to help them maximize their investment.
- Troubleshoot challenges along the way.
For the Assistants I…
- Present them with personally matched prospective clients.
- Provide them with an ever-expanding EA toolkit.
- Provide them with a private community of peers to learn from.
- Provide them with client-relationship services.
- Take care of the invoicing and payment so that they can focus on doing great work FOR the client instead of worrying about their own administrative needs
I don’t simply buy time, energy and focus to resell.. I enhance the value of that same time, energy and focus and better-yet, personally match those relationships.
So, yes, I buy at a lower rate and sell at a higher rate, and it’s a form of arbitrage… Value Enhanced Arbitrage.
You do the same thing, somehow, someway.
Can you make a great living with simple arbitrage? Yes.
But if you want to make a real difference in people’s lives, enhance the value and every party involved will benefit.
-Micah Foster, Co-Owner