In order to face the ever-increasing competion in the market and to make a distinct place for themselves in the world economy, many well-established business enterprises are starting to develop their own online websites so as to take the benefits of E-commerce. Many new start ups are also trying to come up with innovative designs for their products and trying to sell them by means of E-commerce websites.
Online e-commerce sites like Amazon and ebay have already made a name for themselves and are one of the most successful online shopping sites in the world. People do not have to think twice before purchasing any product or service through such wbesites as these firms enjoy goodwill in the economy. In recent times, however, there has been news floating around regarding Amazon to Ebay arbitrage schemes.
Know more about the scheme:
In economic term, the word arbitrage is usually referred to as a process or activity of making riskless profit. It involves making a purchase of from any retailer or wholeseller at a cheap rate and then selling the article to a third party at a much more higher rate. The difference between the price at which the product was bought and the actual price at which it was sold becomes the profit share.
This is what’s now being adopted by top notch online business sites, for instance as in the case of Amazon to ebay arbitrage, which includes drop shipping technique as well. The following is the process that takes place in this kind of arbitrage:
- The consumer places an order for any product or good from Ebay at a considerate amount of price.
- After the order gets placed and the article is sold to the customer, ebay places an order for the exact same article from Amazon which is available at a far less rate.
- All the details about the purchase and customer inforamtion is provided to Amazon by ebay.
- The product gets delivered to the customer but packed in an Amazon box.
- The actual difference between the price paid by the customer and amount charged by Amazon becomes the profit share for ebay.
Although, drop shipping is not considered to be immoral, still it creates a bad impression on the minds of the customer who can check the difference in price rates online. As long as the customer is unaware about the arbitrage, the firms can make a lot of profit out of this activity.