Geo arbitrage a word often used when describing the process of out tasking and outsourcing. What it basically is it’s a ridiculous word, I didn’t make it up unfortunately but it’s about getting things done at a cheaper rate when you get a virtual assistant to do SEO services because of currency differences and economy differences. To live a top ten percent lifestyle in Australia you have to earn $100,000 a year. In the Philippines to live in the top ten percent you only have to earn $25,000. So the caliber of person you’d get is a lot cheaper because of economic and currency differences.

This comes I guess from your stock trading game, the phrase arbitrage is because of the difference of prices of something by 50 percent separate markets. So let’s say BHP may be trading within Australia and BHP might be trading on the stock trading game over in the USA. When the market closes, what can happen is the stock price for BHP might go up slightly.

So now the price of BHP is worth more than it’s listed over here in Australia now the market’s closed. Now that the value of BHP has risen while the market has been closed here in Australia, there is a difference between what someone could buy BHP for here and what they could buy it for over here. The arbitrage in a virtual assistant company is the difference between those two markets.

The concept of geo arbitrage wants the real difference to have the same done in two separate markets and there’s a difference inside the price between what you’d pay somewhere and what you’d pay elsewhere for these virtual services. That’s what arbitrage is all about, it is about getting something for a lot cheaper in a market from another market.

Instead of looking at the dollar value of what that person will cost per hour, we should look at the skill set.

It all comes down to at the end of the day in Australia to get, or America or wherever you might be, to get something done, whether it’s a website done, it might cost you here $10,000. You get the same quality work done in the Philippines when you get a virtual assistant in an SEO company for $2000 because of the currency differences and the wage differences. Let’s say you had a car mechanic here in Australia. They might get paid $50,000 a year. In the Philippines the same person doing the exact same skill set, same knowledge doing that same job in the Philippines might only get paid $10,000 a year to get the exact same outcome.

In the event you took your car to the Philippines to get serviced from the same person, it’s having the same result with a much cheaper price. That’s possibly the better way to describe it due to economic differences.

I’ve got a great designer in Serbia. I don’t know where Serbia is, but he’s very good. I just couldn’t figure out what was of value to him. There really is a Big Mac index. I went and saw what a Big Mac was worth in Serbia, it’s actually not very much. Then I developed a good relationship with this guy and got talking to him about the cost of living in Serbia because a) I was interested and b) I wanted to make sure I wasn’t being ripped off. I very quickly understood that he rents a room for $300 a month and it’s a good room where he lives. It was interesting to know this as I get a virtual assistant like him to grow my business.

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