Side Business Failure in Arbitrage (Resale/Flipping): The Two Major Reasons Traders “Lose a Month’s Salary”
The vicious cycle of poor time-to-income ratio and melting capital from dead stock.Arbitrage ("Sedori" in Japanese, referring to buying low and selling high, often online) is a popular side business because it's easy to start. However, many aspirants fail and quit, often losing funds equivalent to a "month's salary." The root causes of failure are neglecting the hidden labor costs by focusing only on gross profit (leading to a poor time-to-income ratio) and locking up capital by chasing trends (creating a high inventory risk). This article breaks down the mechanisms behind why your room might become flooded with inventory and your cash flow deteriorates, using concrete failure examples.