Service Arbitrage: How Do You Get Started?

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If you’re looking for a way to make money on the side, or even replace your full-time income, a service arbitrage business may be the perfect fit.

In the current economy, many people are looking for ways to make money that don’t require a lot of start-up capital.

Service arbitrage is one way to do this. But, the good thing is not many people know about this business model, so the competition is next to none.

In this article, I’ll tell you:

  • The basics of service arbitrage
  • How people are making tons of money with it
  • How you can get started and build a sustainable service arbitrage business

Ready? Let’s dive in.

Service Arbitrage: Everything You Need to Know

service arbitrage: Complete guide
Service Arbitrage

First things first. Let me answer the question you might be asking in your head.

Is Service Arbitrage Easy?

Service arbitrage is a type of business model that enables companies to operate in multiple markets and take advantage of differences in prices, regulations, and costs.

So, is service arbitrage easy? Yes, and no.

See, it requires careful planning and execution. Companies need to understand the local market conditions in each market they operate in and find ways to exploit any differences. They also need to manage their operations carefully to avoid running into legal or regulatory problems.

How Much Profit Can You Make with Service Arbitrage?

By definition, service arbitrage is the practice of finding services that are underpriced and reselling them at a higher price.

For example, let’s say you come across a social media marketing agency that’s charging $50 per hour for its services. You could easily find clients who are willing to pay $100 per hour for the same services. In this case, you would be acting as a middleman and pocketing the difference.

Of course, service arbitrage doesn’t always involve such a large price difference. Sometimes, you may only be able to find clients who are willing to pay 10-20% more than what you’re paying the original provider.

How to Start a Service Arbitrage Business Today?

The first thing you need to do is decide which services to offer.

Remember, although you’ll be outsourcing these services to other freelancers, you do need to learn the basics of them to manage your clients effectively.

First Things First: Create Your Freelancing Accounts

What you will have to do is start creating your profiles on a couple of freelance marketplaces.

Why not all of them?

Because it doesn’t work. Believe me, I’m working on two platforms, and it has been overwhelming. You don’t need more than two.

The two platforms I’ll suggest are:

  • Fiverr
  • Legiit

You can go with Upwork, but there’s generally a pretty high barrier to entry there.

In fact, you’ll first have to get your profile approved on Upwork.

Fiverr and Legiit work on the service or gig model.

What this means is that you can create your service, optimize it, and buyers will reach out to you.

Of course, you should market yourself. I’ll tell you how in a while.

Anyway, once you’ve decided which service you want to outsource, create and optimize your freelance profiles on Legiit and Fiverr.  

Done?

Next, start reaching out to potential buyers and try to get orders.

Then, outsource these orders to someone else on the same platform or outside.

For instance, let’s say you’ve got an order on Legiit for $100.

You get all the requirements for the project from the client and reach out to a freelancer on Fiverr.

And get them to do this project for $50.

You do the match! $50 profit by just grabbing and outsourcing work.

Having said that, outsourcing or service arbitrage does come with its own challenges.

I’ll tell you how to overcome these challenges since I’ve been in the trenches for several years now.

First, let’s talk about the services you should consider for your service arbitrage business.

Here are a few of the most popular freelance services you can offer.

Website Development

web development  in service arbitrage

Website development is one of the most in-demand skills/services in this digital world.

All kinds of businesses are going online, and for good reason: their target customer is online.

This poses a fantastic opportunity for service arbitrage entrepreneurs.

So, the first thing you want to do is find business owners with no website.

While there are tons of ways to do that, here are a couple of effective ideas:

  • Look at the Google Business Profiles of businesses in your area and see if they need a website
  • Find web development tasks on Legiit and Fiverr
  • Start networking on LinkedIn and reach out to potential clients

The second one is safer as there are very few chances of fraud.

Once you get a web development project, hire someone to do it for you.

Factifying is partially supported by its audience. When you purchase through links on our site, we may earn an affiliate commission.
Top Web Development Services on Fiverr

Website and Web Development By Haseeb Ahmed (Topo Rated)

WordPress Website Development and Design By uvkoladiya (Fiverr’s Choice)

Top Web Development Services on Legiit

(Coming Soon)

SEO Content Writing

SEO content writing in a service arbitrage business model

SEO content writing or copywriting is another super in-demand service.

There’s no shortage of freelancers in this industry.

The good thing is that there’s a huge gap in the rates.

For instance, let’s say someone is offering a particular task for $100.

There’s a good chance that you can get this job done from someone else for just $20.

You just need to know where to look for these services.

The rate of content writing services vary a lot.

Most Cost-Effective SEO Content Writing Services on Fiverr

SEO Blog Post Writing by Zain

SEO Article Writing by Damiya

Top SEO Content Writers on Legiit

(Coming Soon)

Website Speed Optimization

website speed optimization in service arbitrage

Website speed optimization is in-demand. Why? Because Google likes fast-loading web pages, and tends to rank them over slow-loading web pages.

The good thing is website speed optimization can be as simple as installing and setting up a plugin like WP Rocket.

However, custom websites and non-WordPress websites need different approaches.

Since you’re going to outsource this to an expert freelancer, there’s no need to go into the technical details of how it’s done.

Top Website Speed Optimization Services on Fiverr

WordPress Website Speed Optimization by tossytheking (Top-Rated Seller)

Advanced Speed Optimization for Shopify Stores by gvrdenu

Top Speed Optimization Services on Legiit

(Coming Soon)

Text-to-Video

According to a video marketing statistic, more than 85% of marketers use video as a marketing tool for their brands.

The reason is fairly obvious: Content consumers of the 21st century love watching videos.

What this means is that if you can create a good-looking video, you can help these businesses.

The best part is you don’t have to be an expert to create engaging and even converting videos.

Tools like InVideo can do all the heavy lifting for you, for free!

To create a video, just enter your script and it’ll generate a video for you. 

You may have to do some editing like adding the voice-over (if you’re not using InVideo’s AI voice-over – It’s paid though).

A single tool like InVideo can make you a video marketer.

Even if you don’t want to do it yourself, you can outsource the task on Fiverr.

Text-to-video services are super affordable, but your clients don’t have to know about that.

Best Text-to-Video Services on Fiverr

Turn Blog Posts or Articles Into Videos with Voice Over by itis_mb

Graphic Designing

Any business that has a website and social media profiles need graphics.

This can include:

  • Logo
  • Social media banners
  • Social media ads
  • Blog graphics
  • And more

Now, service arbitrage is one of the two ways you can make money with graphic designing.

Thanks to online graphic design tools like Canva, virtually anyone these days can create basic graphic designs for all kinds of purposes.

The best thing is that it comes with plenty of ready-made templates that give you a good head start in the design process.

You just have to pick a design that looks good to you and make some changes and it’d be good to go.

Having said that, if your clients’ requirements are advanced, you may have to turn to a freelance graphic designer. They have the expertise and experience to take care of intricate design tasks.

Top Graphic Design Freelancers on Fiverr

Any Kind of Graphic Design by ideahits (Top-Rated Seller)

Custom Graphic Design Project by simplybright

Best Graphic Designers on Legiit

(Coming Soon)

Web Design 

Web designing and landing page designing is a skill on its own.

Why? Because it requires specialized knowledge and experience about how a converting landing page or web page looks like.

A graphic designer may have the required skills, but to be on the safer side, you want to hire an expert.

Someone who knows what makes a visitor stay on the page and take the desired actions.

Best Web Designers on Fiverr

WordPress Website Design by Sabtain (Top-Rated Seller)

Best Web Designers on Legiit

(Coming Soon)

Search Engine Optimization

There’s a lot that you can offer in the SEO industry. 

In simple terms, SEO is a website marketing strategy that helps you rank higher on search engines and drive relevant traffic to your web pages.

Now, there are two ways to offer SEO services:

  • All-in-one SEO services (Like monthly SEO management that includes everything)
  • Bits and chunks of SEO (For instance, guest posts, on-page SEO, speed optimization, and more)

As for outsourcing SEO, there’s probably a no better place than Legiit.

Legiit has the most experienced and highly rated SEO freelancers out there.

Top SEO Services on Fiverr

Monthly Local SEO for Google Rankings by best_seo (Top-Rated Service)

Expert SEO Audit Report by jacob21 (Top-Rated Seller)

Top SEO Services on Legiit

(Coming Soon)

How to Get More Clients for Your Service Arbitrage Business?

Now, the most challenging part of service arbitrage is getting work.

Although it seems tough, winning new and retainer clients is easier than you might think.

There’s no one strategy that you should stick to when it comes to client acquisition.

There are 10s of channels to attract and convert new clients.

Let’s take a look at them.

Create Freelancing Profiles

Really, getting clients can be as simple as creating freelancing profiles.

But, can you outsource the work you get on Fiverr and Legiit?

Why not?

There’s no rule against outsourcing your business.

Tons of people are outsourcing all of their work and still going strong.

You just need to find the right resource to work with; it’s crucial because client satisfaction is the only thing that you need to grow in a service arbitrage business.

Anyway, just create your freelancing profiles, join freelancing groups, and market yourself (or your agency – if you want to start big).

Reach Out Via Emails

The next client acquisition strategy doesn’t involve freelancing profiles.

All you need to do is find email addresses of prospective clients and send them a pitch.

Now, the message of your email plays the major part in cold email outreach.

You don’t want to say, “Hey, buy my service for $200”.

Instead, try to build rapport and trust with the client.

Identify their pain points and offer a solution.

To get your foot in the door, you can also offer a free “x-minute” consultation.

When they’re ready to buy, pitch your offer (The one you’re going to purchase on Fiverr or Legiit).

Social Media Outreach

Social media outreach doesn’t have to be very different than cold email outreach.

The message you want to convey remains the same.

But, to stand out, optimize your profile for the right skills.

Join groups in your industry and start networking with others.

Facebook groups are a great place to find niche-based clients and offer your service.

Advertise (Optional)

There can be two reasons why someone would want to use paid ads for client outreach and acquisition:

  • To scale an already-growing service arbitrage business
  • To get your first order

Some ad platforms you can use to get clients are:

  • Facebook ads
  • Google ads
  • Twitter ads
  • LinkedIn ads

Create a Website (Optional – but, powerful!)

Now, I understand building a website may seem a bit overwhelming when you don’t know anything about website development.

But, what if I told you that you can have a live website with your full name in about 10 minutes?

Content management systems like WordPress and ready-made themes make website creation super simple.

Why do you want to create a website of your own name?

Personal branding!

You’ll build your authority and can even monetize your website with blog posts later.

Plus, there’s nothing you can do once someone else acquires a domain name with your full name.

For domain names, always buy from Namecheap.

You’d need a hosting service to host that domain. Hostinger would be a very cost-effective option.

Conclusion: Service Arbitrage

The service arbitrage business model is simple: You’re acting as a manager who takes work and gets it done from a freelancer.

Of course, there’s work involved in managing a service arbitrage business.

The first challenge would be to hire the most cost-effective freelancers on the market.

Fiverr makes it super simple.

Just look at the reviews of an individual freelancer before purchasing their gig.

Or, use the ones I’ve recommended in this blog post

I hope you found this blog post helpful and can now confidently start a service arbitrage business.

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Zain is an SEO Copywriter with around 4 years of experience in writing and digital marketing. He's currently managing this blog and offering freelance writing services on Fiverr and Legiit.

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