Freelance arbitrage isn’t just a buzzword. It is actually a real thing.
It is a subset of the thriving digital economy run by freelancers delivering services via digital platforms.
And there is an army of digital entrepreneurs spinning the wheel and making cool money on a daily basis.
To give it some context, the global freelance industry is estimated to be worth $455 billion in 2023, according to Flexiple.
That is worth more than the global footwear industry; and almost everyone owns a pair of shoes!
So, what’s the hype about freelance arbitrage?
The truth is, freelancing isn’t going anywhere soon.
With more and more people choosing to become digital nomads and working remotely, freelancing is bound to take on many shapes and forms.
Enter freelance arbitrage.
Now, not everyone is willing to work and get paid by the hour.
While some love to grind, others prefer to use leverage and build passive income systems that require minimal work.
And that’s what necessitated what we call freelance arbitrage.
A Short Story
A particular acquaintance visited me recently and was convinced that I was a “Yahoo boy” (if you know what that means).
Evidently, seeing the soft life afforded by me courtesy of freelance arbitrage.
According to him, I was fronting as a freelancer while operating other shady businesses beneath.
That wasn’t just funny but also insulting, especially when you consider the enormous amount of opportunity available in the digital space. And the amount of time I put in to hone my craft.
How someone can still be naïve and uninformed in this age still baffles me.
Anyways, I sat this guy down and took some time to school him about how I make my money and how the system works.
However, he wouldn’t budge and insisted that it was impossible to make money that way.
According to him, there was no way you could set up a system that is almost automated that makes you money online without you doing a lot of work.
Well, I had to let him wallow in his ignorance.
Making Money, Not Opinions
I’ve met more people who’ve never made a dime online tell me that it is impossible to succeed in one or more online ventures.
Ni88as ain’t gettin’ money, but they got an opinion
In fact, the majority of people who’d read this article will disagree that this concept even works.
These types of people are in the business of making opinions, and not money. So, I just let them be.
But if you want to make money online, you must think like a scientist. You must experiment and test every hypothesis and idea for yourself.
You must continually test ideas until they start working for you.
The $100 Daily Test: Freelance Arbitrage
There is no guarantee that this would work for you, but it worked for me.
I wanted to test if it was possible to make $100 daily online with freelance arbitrage.
The system would be to set up a customer acquisition channel and then use a staff agency to fulfill customer demands cheaply.
All done online from start to finish.
I didn’t have to start with making $100 daily though.
I started with making roughly $20 daily and then grew the system to a stage where $100 daily earnings became a guaranteed outcome.
So, how would this work?
- First point of call: find a niche
- Find a customer acquisition channel with a leverage
- Create a staff agency channel
- Test the waters, find efficiency
- Trade digital services
- Hire a niche expert manager
- Rev up the system
Let’s take a look at each step.
First Point of Call: Find a Niche
The first point of call is to find a niche that you’re knowledgeable about.
You don’t want to choose a niche because you can make more money there even if you’re a complete noob.
In that case, the learning curve would be longer and you might lose motivation.
Ideally, you want to start with a niche where you have some experience and have successfully done projects in.
That is why it is important to first become a freelancer (even a successful one) before trying freelance arbitrage.
A niche could be copywriting, email marketing, web development, app development, technical writing, graphics design and branding, etc.
Find a Customer Acquisition Channel with a Leverage
Once you have found a suitable niche, you have to start acquiring customers ASAP.
Without acquiring paying clients, your freelance arbitrage system wouldn’t work.
In fact, paying clients are the lifeblood of this type of arbitrage.
The way I do this is to find a freelancing platform that gives me leverage to do this in an unlimited way.
For this, I’ll choose upwork.
With upwork, you can apply for an unlimited number of projects as long as you have some “connects.”
You’d have to buy connects to keep applying for as many projects as possible to get paying clients.
The more clients you can acquire, the better.
Create a Staff Agency Channel
Now, you don’t want to do all that work coming from clients acquired on upwork.
Imagine getting 5 projects per day on a consistent basis. That’d be impossible for you to do even if you’re superman.
So, you have to create a staff agency for that.
This is the nucleus of your arbitrage system and you must consider price and availability in hiring the right staff for this system.
My platform of choice for the staff agency channel would be Fiverr.
With fiverr, you can hire quickly and cheaply, and there’s a way to organize all your staff in an organized manner to fit each project.
Fiverr helps me to spend about 30% of what clients pay me on upwork, which means that I get to keep roughly 50% of my earnings while doing minimal work.
You could choose any platform that works for you, as long as it helps you to hire quickly, cheaply and efficiently.
Test the Waters, Find Efficiency
At the beginning of your freelance arbitrage journey, you don’t just want to go all in and spend your whole budget.
That would be fatal.
You want to keep testing things until you find cost and performance efficiency.
Consider factors such as time for project completion, profit margin per project, customer acquisition costs, and time spent managing staff.
I try to make the system so efficient that it would become almost seamless for me.
Trade Digital Services
Trading digital services is the essence of this freelance arbitrage system.
As all arbitrage is, you want to buy low and sell high.
That is to say, you want to get paid higher for a project and then turn around and pay someone else cheaper to do the work for you.
For example, a client on upwork pays you $500 to design a single-page web app with a few customizations.
Once the project is started, you then head over to Fiverr and get an expert web developer to do the project for you at $100.
You then submit the project on upwork. If the client approves of it, you head over to fiverr and approve the job so your hire gets paid.
Now, you’ve made some money trading digital services.
Hire a Niche Expert Manager
This is an additional step and might not be necessary.
But it is possible to hire a niche expert manager to manage your freelance arbitrage system on your behalf.
They only get paid per project, which ensures that you still control how much you earn while doing almost zero work.
A niche expert manager would be someone who is actively working in a particular niche and has sufficient experience to manage projects.
You don’t want to hire a graphics design expert to manage a copywriting project.
For example, if you’re in the web development niche, you could hire a freelance web developer to help you guide the staff you hire from fiverr to fulfill your projects.
While you work on getting paying clients on upwork, the niche expert manager would work on making sure that projects are done sufficiently well on fiverr.
Rev Up the System
Once you have your freelance arbitrage system working, you might want to rev it up to increase your revenue.
If you follow through from the first step in setting up the freelance arbitrage, you’d notice that it is methodical.
Every step is integral to the success of the arbitrage system, but once that checks out, you want to take it up a notch.
The hardest part is setting the system up and getting everyone to do their job efficiently.
Once that is achieved, you could literally just turn a key and multiply your revenue.
That’s how it was possible for me to go from $20 per day to $100 per day.
It worked and is still working. It worked for me and can still work for you.