How to make money as an online service broker?

3 replies
Hey guys, I've got a money making project in mind that I'd like to share and discuss with you before running a test. There are many freelancers on specific platforms like Elance trying to make money selling their services. Hire them for your own clients. Pay freelancers whatever they want and charge your clients a lot more. The difference is yours. You are the middleman.

Let's get to your work flow as a middleman. First of all you need a service that's in high demand. You might suggest logo creation. But you need repeated customers and high order value. People usually buy one logo once they start a new business. Nobody gets tons of logos on the regular basis. So if you go with digital drawing services for instance, your client might want to order 100 images today and 1000 next month.

However, here's a problem. You pay a freelancer your own money. For example they charge you $10 per digital illustration drawn and you charge your customer $50 per item, keeping $40 profit. What if your customers order 1000 images from you right now? You will have to pay out $10,000 to freelancers for their hard work. Not everyone has so much money to invest. There seems to be no way to use $50k collected from your customers to pay freelancers because it takes too much time (a week/a month) before you get hold of this cash. Too bad Paypal does not allow to receive funds in some countries. Any ideas?

Also, when it comes to marketing and advertising, you risk to waste your own money. I think building relationships with business owners who might need your services using social media would work just fine. You will not find a lot of customers this way of course. But if one customer spends at least $1000 per month buying your services, it's awesome. Here comes another challenge for you. You've got to know who spends $1000 per month on the internet and what they buy before you pick up a product or service to offer. Please, share your ideas.
#broker #make #money #online #service
  • Profile picture of the author Steve B
    You're talking arbitrage and it is a business model that others have used with varying amounts of success.

    I would suggest you start small and get your feet wet before you depend on your business plan for steady income. It's quite easy to over estimate both the amount of business you can garner and also the amount of "profit" you can expect for what you do.

    Buying a service for $10 and selling that same service for $50 sounds great but then reality will set in. Yes, it may be possible under certain ideal conditions but it's not going to be an everyday occurrence.

    Arbitrage is not the panacea that it sounds like you think it is. That's why I say, start small and get your feet wet before you invest a lot of time and money in this dream.

    Steve

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  • Profile picture of the author Ghoster
    Freelancers on Upwork, etc, don't make enough to be able to afford this. There is no slice of the pie left for you to take. And UpWork clients aren't going to pay more just so you can have your $40. They would pay $0 if they could get away with it.

    The central question is, why should a freelancer allow you to earn off of their backs?

    It might be useful for someone just starting out. But the great writers, designers etc, have their own sites, and they don't need you.

    The problem you will have is the quality of work will always be poor.

    As an established writer with my own site, if you were to come to me with an arrangement where you bring customers in for my higher end service, I might be able to cut you something. But that's as far as it goes. You definitely won't be walking away with 70% of the profit, lol.

    For example they charge you $10 per digital illustration drawn and you charge your customer $50 per item, keeping $40 profit. What if your customers order 1000 images from you right now? You will have to pay out $10,000 to freelancers for their hard work.
    At that price, you are no doubt paying them for another artist's hard work. You aren't going to get anything original for $10. And, not meaning offence, why do you think it's ok for you to make 4x more than the person providing the product?

    That, in the end, is why the scheme won't work, imo. Your turnover rate will be insane.

    Content mills like Textbroker scrape by because they prey on new writers, but they are constantly posting ads to Craigslist, and their product is low quality.
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    On the whole, you get what you pay for.

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    • Profile picture of the author Max Nestorson
      Originally Posted by Ghoster View Post

      Freelancers on Upwork, etc, don't make enough to be able to afford this. There is no slice of the pie left for you to take. And UpWork clients aren't going to pay more just so you can have your $40. They would pay $0 if they could get away with it.
      I'm not going to resell services from Upwork or Elance. Most services are expensive there. I found Russian alternatives where freelancers sell their services a lot cheaper.

      Originally Posted by Ghoster View Post

      The central question is, why should a freelancer allow you to earn off of their backs?

      It might be useful for someone just starting out. But the great writers, designers etc, have their own sites, and they don't need you
      Many of those freelancers are not marketers. They want more orders. They might be really glad to see me order their services on the regular basis. They can look at it as if they just got a job.

      Originally Posted by Ghoster View Post

      The problem you will have is the quality of work will always be poor.
      No, I check their portfolios with samples and feedback. If I had a problem with a freelancer, I would stop buying from them.

      Originally Posted by Ghoster View Post

      As an established writer with my own site, if you were to come to me with an arrangement where you bring customers in for my higher end service, I might be able to cut you something. But that's as far as it goes. You definitely won't be walking away with 70% of the profit, lol.
      Good. But you've done a lot of hard work establishing yourself as a writer. Many people don't want that path. They just want to get a job and get paid without learning internet marketing, advertising, SEO, etc.



      Originally Posted by Ghoster View Post

      At that price, you are no doubt paying them for another artist's hard work. You aren't going to get anything original for $10. And, not meaning offense, why do you think it's ok for you to make 4x more than the person providing the product?
      I've made a research and discovered a good service for $10 that sells for up to $100 on other sites worldwide. I've placed an order and checked the quality myself. It's awesome. I don't want to offend people by reselling their stuff. I want to give them the exact amount of money they're asking for. Do you think that person gets tons of orders every day? No. May be just about 4 per week. Does he want more orders and money? Yes, of course. To be able to sell his services for $50-$100 he must have a budget and learn English, social media, SEO, online advertising, etc.

      Originally Posted by Ghoster View Post

      That, in the end, is why the scheme won't work, imo. Your turnover rate will be insane.
      I've heard success stories about the service arbitrage. Do you have a better scheme to suggest? I'm fed up with affiliate marketing, looking for something better to make more serious money.

      Originally Posted by Ghoster View Post

      Content mills like Textbroker scrape by because they prey on new writers, but they are constantly posting ads to Craigslist, and their product is low quality.
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