Service arbitrage

Lesson Details:

Video Transcription: In this video I want to talk about service arbitrage this video is brought to you by Appy Pie’s Academy that you can do on Fiverr all that is is a fancy word for essentially selling a service for any amount and then actually not doing the service but outsourcing the very same service to five are freelancers for less money so let's say you get paid a hundred dollars you hire somebody for fifty dollars they deliver the work your client is happy you get to keep the difference it's a very attractive looking model because it involves literally no work and so a lot of people jump into it or at least try to jump into it but there are a couple of pitfalls I want to explain which after you overcome those pitfalls actually this becomes a viable strategy first of all people rush into this and they hire unproven freelancers who are cheap cheap can actually be very expensive because those freelancers usually do not such good work they require a lot of communication they can be junior and so your clients might not be happy your clients might request a refund you might not get a refund from your freelancer or you might just get bad reviews and it will be a total disaster waste of time so before you hire freelancers before you get your clients test your freelancers create a good working relationship with your freelancer so you know they're trustworthy smart good do good work and then you'll feel good about hiring them for jobs so first test the freelancer without that it's very risky because once you do get projects you'll have a deadline to complete them in and so you can't go and start testing the freelancers then you just won't have enough time second you need to find a way to sell expensively because think about it if you let's say sell on Fiverr for $100 you don't get to keep a hundred dollars you get to keep $80 of that right fibre takes 20% so already your margins are cut so you need to find a way to increase your revenue with extra upsells these are things that we discussed in this course like how do upsell extra things how to get clients to pay more on Fiverr but also you can look for clients all Fiverr who are maybe not trained to look for the bargain basement prices and of course after a while of doing a few such projects you'll have some process optimization where you and your freelancer who actually does the work they will do the work faster you'll communicate with them better you'll reuse some of the same code or designs that you used in previous projects so actually that's when you'll get to spend less time doing the job or the freelancers spend less time doing the job and that's where this arbitrage model begins to work but in the beginning it's challenging because you don't know the freelancer you're gonna have a hard time selling the services more expensively because a lot of clients they do know that they can get it cheaper and you're sort of like extra costly so in the beginning is hard but if you get it worked out then actually over time this can be and is a viable strategy for a lot of people.