Get A Virtual Assistant Using Geo Arbitrage Today

by Jimmy Cox
Nicolas Darvas Trading

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 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 suppose from the stock market, the word arbitrage has to do with the differencing of prices of something in two separate markets. So let's say BHP might be trading here in Australia and BHP might be trading on the stock market over in the US. When the market closes, what might happen is the share price for BHP might go up a little bit.

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 idea of geo arbitrage is looking for the difference where you can get the same thing done in two separate markets and there's a difference in the price between what you'd pay somewhere and what you'd pay somewhere else. That's what arbitrage is, so geo arbitrage is just to do with geographically speaking you can get something for a lot cheaper in one 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 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.

If you took your car to the Philippines to get serviced by the same person, it's getting the same result at a much cheaper price. That's probably the better way to describe it, it's the outcome price. So it's really the 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.

It's just that the cost of living over there is so different. This is the whole argument too, if you went and paid someone in the Philippines hypothetically or a company went to the Philippines and said I'm going to hire the top ten percent of their staff and pay them $100,000 a year, their economy is going to be absolutely wrecked.

So you can't just go in there and pay what we consider a normal wage because it would just wreck the rest of their economy because all the top ten percent would go and work for this one company. The rest of their whole business and economy would go down, it just doesn't work like that. So you want to pay people and get a virtual assistant exceptionally but by paying them too well, it could be a problem for them.

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Article submitted Thursday, September 01, 2011 & read 4 times.

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