The Game with Alex Hormozi Arbitrage 101 | Ep 252
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Nov 20, 2020 Discover the power of arbitrage as a crucial business strategy that drives profit generation. Learn the key differences between economic and accounting profits, and how opportunity costs play a significant role in your decisions. Find out how aligning your skills with market opportunities can uncover lucrative arbitrage paths. The discussion emphasizes harnessing information advantages for effective pricing strategies, boosting your entrepreneurial success.
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Arbitrage in Business
- All businesses operate on the principle of arbitrage, exploiting market inefficiencies for profit.
- Your success depends on the size of the arbitrage opportunity.
Markets and Supply Chains
- Arbitrage involves buying in one market and selling in another, exploiting price differences.
- A supply chain is a series of arbitrage opportunities, with businesses acting as intermediaries.
Economic vs. Accounting Profit
- Accounting profit is revenue minus all costs, while economic profit considers opportunity cost.
- Economic profit subtracts the potential profit from alternative uses of your resources.