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Comment by jeromegv | Hacker News Reader

Are you serious? He's not being paid to drive around. He's being paid to go to auctions, analyze the price of things being sold in large quantities, and decide if there is a business opportunity to sell products in a different market. He then ends up with a large inventory that he must sell, otherwise he is stuck with unsold inventory (risk). He also has no guarantee that the aunction will be selling the same products the week after, so it seems like there is a scarcity risk as well (not having a homerun product to sell constantly)

This is what the retail business is.

He's not just "driving around".

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Yeah, this whole thread is based on a false assumption, that the work he does is "easy and equivalent to driving around." It's not easy or trivial to start a business, plus he assumed risk up front.

That's like saying "Property owners just sit around and collect rents, so they shouldn't make any money." It totally misses the point of using capital to invest in and maintain real estate, which is not "sitting around" at all - it only becomes easy after you've done a significant amount of work to make it so.

Real estate is a very poor example considering countless cases of landlords neglecting repairs and maintenance. In some states in the US, there's little or no accountability for this.

Sounds like confirmation bias.

I've watched some YouTube videos about various arbitrage schemes, including refurbishing. It rarely makes sense at a small scale, but if you can get enough product, you can eliminate the waste by scaling up.

I can watch videos/read blogs about how to duplicate a specific win, but by that point so has everyone else and margins drop.

A few people who find the deal early can make a ton, and they get paid well for knowing what to look for in a good deal. Even then, I'm sure pretty much everyone who does well with this has plenty of stories where they lost big, and they only win on average. It's the same as stock picking; investors don't get paid well to watch their investments tick up, they get paid well for finding the bargains, and sometimes an investment opportunity is too good to be true.

I find it interesting to see this similar kind of behavior in video game economies like with Path of Exile. There are people who spend all day looking for good deals or opportunities, and essentially buying and reselling, maybe with some minor tweaks. These people tend to be the wealthiest in the game, with far more in-game currency than people actually playing the game.

I think a big part of that is because most people don’t care at all about economics in a video game. When you’re mostly competing with children and people who just want to game and don’t care about being rich, putting any sort of organized effort toward getting rich becomes substantially easier. EVE is like this too. These people are also often derided as “not actually playing” the game.

Exactly, he gets the risk premium. One of the most straightforward ways of making money in markets is being compensated for bearing risk. This is a systemic factor and will exist no matter how many people are doing it. That’s not to say it will always be so lucrative, but in general he will always get compensated more than someone who is merely dropshipping.

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