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A Little Background Story
A few years ago, both my husband and I lost our jobs unexpectedly. The company that we both worked for suddenly closed down.
So, we needed to make some money quickly to help pay the bills.
After some research, I found out that the fastest way to make money was to sell services.
But, there was one problem – no sell-able skills.
Then, an idea struck me.
Why not sell other people’s skills?
Then, I noticed that there are literally hundreds of thousands of talented freelancers selling their skills on freelance platforms such as Fiverr & Upwork.
And, a lot of them are always looking for more freelance work.
So, why not get clients for the service they offer and outsource the work to them?
And I call this business Service Arbitrage.
So here’s how it works.
First, you find in-demand services that freelancers are already offering at a super low price on freelancing websites.
Then, you market their services to businesses that need it. Once you get a sale, you hire the freelancers to deliver the work for you.
How you make money is that you quote a higher price to your clients than what your freelancers quote you and pocket the price difference as your profit.
This can be considered another variant of freelancing.
The only difference is that you are outsourcing the work to other freelancers instead of doing the work yourself.
Who Service Arbitrage Is Suitable For
Service arbitrage business is suitable for people who
- Have no sell-able or marketable skills
- Have sell-able skills but want to outsource all the work to freelancers instead of doing it themselves
- Feel not confident about their skills to offer the service by themselves
- Want to have a service-based business on the side that doesn’t require much time to run and zero capital to get started
- Need to earn an income quickly on the side
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5 Steps To Start Your Service Arbitrage Business On The Side
Now, I am going to walk you through a simple but proven 5-step system which I have used myself to make extra money with service arbitrage. And I hope that you will find it helpful.
Step 1: Find a profitable service to offer
Many people seem to think that if you want to succeed in your business, you need to come up with a business idea that no one has ever thought of before.
But, that couldn’t be further from the truth.
Actually, the key to starting a successful service arbitrage business is to identify a service that is ALREADY in demand.
Now, you might be thinking that if there are already people offering the same service, why would anyone want to buy from me?
I had the same doubts before.
But if no one has ever thought of doing it, there is a pretty good chance that there is no demand for it.
If there are already people who are offering this kind of service, that is actually good news.
That means there is a market for this type of service.
It is not a bad thing that you have competition. If you are smarter than them, provide a better service than them or market better than them or work harder than them, you can make more money than them.
So, it is really up to you.
You either talk yourself out of doing anything out of your comfort zone and stay stuck at where you are right now, or you can start taking small steps and at least give yourself the chance to get to where you want to be.
To find what kind of services that you can re-sell, you can check out Fiverr and see what services are selling the most.
Step 2: Find Clients
Once you have decided what service you want to offer for your service arbitrage business, it’s time to get clients!
There are two ways of finding clients:
- Free leads
- Paid leads
Here, we’re only going to talk about how to get free leads for your business because it is an entirely different game for paid leads.
When you are just getting started, I also strongly advise that you should start with free lead generation methods to get clients.
So, if you are just starting out, the very first thing you should do is to let everyone in your network know what service you are offering for your new business.
The purpose of doing this is that they can help you spread the word and get people in your network to refer clients to you.
Also, you should find out where your potential clients usually hang out online and then go where they are and put your offer in front of them.
Don’t waste time posting on Twitter or Facebook because your post will only get buried among hundreds of other posts and NO POTENTIAL CLIENT IS GOING TO SEE IT.
Step 3: Close the sale
Now, how do we close the sale?
This is something that a lot of people struggle with.
Not everyone is a natural salesperson.
Not everyone has sales experience or training.
For me, I had no sales experience prior to starting this business. To be honest, I even felt guilty about asking for the sale.
Maybe you feel the same way.
But, I was able to overcome my fear and learned the art of selling from my experience of growing this business. And I want to share with you what I have learned.
So, what is it that I do that allows me to be my natural self and not feeling bad about asking for the sale?
A mindset shift.
Yes, all you need is to change your mindset from selling to genuinely helping and serving.
This way, you stay true to who you really are.
Also, it takes away the pressure on you and your client.
When you are genuinely trying to help your clients regardless of whether they will hire your service in the end, they can tell that you care and not just go after the money.
If you want to be good at selling, you need to understand two things:
- We only buy from people whom we believe can solve our problem and get us the results we desire
- We only buy from people whom we trust and like
Once you can internalize these two points, you will find it is not so hard to close a sale.
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Step 4: Find Outsourced Worker To Deliver The Work
Getting a good and reliable outsourced worker to do work for you is vitally important. You don’t want to end up with one who is unreliable.
Here are actually MANY SIGNS that you can look out for to help you filter the good ones from the bad ones.
For example, you should always look at the reviews that the past clients have given them. Are they good reviews? Or most of the reviews are bad?
A second sign is their response time. Do they respond very quickly to any enquiry? Or do they take very long to reply?
Inside my FREE Service Arbitrage Email Course, you can get access to the complete list of warning signs you should look out for when you are selecting which freelancer to outsource the work to.
Step 5: Hand Over The Completed Work
So, we have come to the final step of this five-step system for starting your own service arbitrage business.
This step should be the easiest of all.
After your freelancer has completed the work and your client is happy with the result, it’s time to collect the remainder of the full payment from your client before you hand over all the deliverables.
If possible, always ask your client for a testimonial and referrals at the end of the project. If you have done a good job, your client should be okay to do this favor for you.
Now, if you are interested or maybe just curious to know how YOU can start your service arbitrage business right now, you can get instant access to my FREE Service Arbitrage Email Course and follow the action plan outlined inside the email course.
Frequently Asked Questions About Starting A Service Arbitrage Business
Question: Do you need startup capital to get started?
The short answer is NO.
I started my service arbitrage business with ZERO investment. As I got more paying clients, I invested a very small portion of my profits to start a website for my graphic design agency as part of my business expansion plan.
Question: Do you need any experience to start this business?
The short answer is NO.
I started this business without any experience at all. Before this business, I had been working at a full-time job in the financial industry which is totally unrelated with what I am doing now in my business.
Question: How much time do you need to run and manage this business?
For service arbitrage business, most of the time will be spent prospecting and closing new clients.
As you will be outsourcing the work to freelancers, you will just need to monitor the project progress.
So, it’s very flexible in terms of schedule.
If you want to get more clients this month, then you will want to spend more time on prospecting.
Question: How long will it take to get your service arbitrage business up and start making at least $1,000 per month?
For myself, I got my very first paying client within 3 days using a FREE lead generation method.
And I started to earn at least $1,000 per month with my service arbitrage business within 3 months.
I have had students who made close to $1,000 in one single project in the first month.
But, I also have had students who only manage to get the business off ground after a few months.
Because this is NOT a “get rich quick” scheme, you are expected to put in hard work.
And, it’s entirely up to you to decide how fast you want your progress to be.
Starting a service arbitrage business is very simple, but not easy because it still requires hard work.
Unlike e-commerce business or other brick-and-mortar business, there is zero startup cost to start a service arbitrage business
There’s also no need to cold call clients or even meet up with potential clients to pitch them because all the sales process can be done online.