I actually used to write book arbitrage software, and this person has managed to completely misunderstand it.<p>I'm not arguing here for its societal value, just that dan appears to have misunderstood some fundamental bits about how it works.<p>> Robot 1 offers Book A for $10. It probably doesn't have it in stock, but it knows where it can buy it for, say, $9, drop-ship it to the customer without ever seeing the acutal product, and make a buck on the arbitrage. Robot 2 notices this and lists the same book for $11, hoping to do the same thing. Robot 1 notices Robot 2's listing, doesn't know or care that Robot 2 is another arbitrage trader, and reprices its listing for the book to $12. Robot 2 notices this and goes to $13, and away we go.<p>This makes no sense; the fundamental rule of amazon bots is that consumers buying used books almost always buy the <i>lowest-priced</i> used book available. So the bot war would send the price <i>down</i>, not up.<p>Why in the world would bot 2 offer the book for $11? It would know that nobody would buy it when there was one already listed for $10.<p>The silly-high-priced books that I saw when I was working for the book company were rare long-tail books. One of the discoveries that many people have made is that for rare books, whether or not you understand what the heck it is, some % of them will get bought even if they're listed for <i>silly</i> high prices. Enough people will pay thousands of dollars (not an exaggeration) for a used copy of a book that they can't find elsewhere that stocking the long tail of books can in fact be very valuable.<p>That means that, when you find lots of rare books, your incentive is to throw out some crazy-high price for each, because some % of them will, in fact, get paid, making the whole enterprise worthwhile.<p>edit: Arbitrage on the same market Does Not Work, in my experience, and to just claim that it does with no evidence doesn't make it any more likely to do so.
I did something similar in the early 2000s. I sold public-domain books (as in created by government agencies) as pdf on cd on eBay.<p>The cost varied between $1-$10 with $5 shipping, and would cost me $1.20 out the door. I had everything automated with a robotic disc publisher/printer and stamp printer that I would work maybe one hour a week and bring in a couple hundred dollars each week.<p>It was definitely a great source of side income. The main market was people who didn't search google, since they could take the title of the auction, put it in google, and usually find the PDF right there.<p>There's still people doing the same out there but now the market's flooded and there's much less profit margin available.
Money laundering seems like an interesting explanation, but there are far better and less risky ways to launder money. Cash businesses, or even bitcoin are superior to "selling" an app that could be taken down at any time, that requires credit cards on file to purchase, and whose transactions Apple or a credit card company could freeze, reverse, or cancel at will.<p>It would be fairly trivial for Apple, in cooperation with a law enforcement agency, to source the transactions, map the patterns, and triangulate to likely points of origin. And it would probably arouse a lot of suspicion if an app of such obviously bullshit quality suddenly started raking in millions of dollars in sales -- thereby making sales of the app inefficient and risky as a laundry-integration method.<p>I suppose the whole thing relies on iTunes gift cards and credits, rather than credit cards, but why overcomplicate things beyond there? Buying and reselling gift cards at a moderate discount would launder your money just fine, while limiting your exposure to third-party risk.<p>Apropos of nothing, the dissection of the high-priced crapware reminded me of "I Am Rich," the infamous and short-lived iOS app from 2008. It cost $999.99, and all it did was display a glowing red gem and a tagline on your screen. Evidently, at least eight to ten people bought a copy before Apple swung the ban hammer.
"One explanation for this could be money laundering."<p>Reminds me of something a few months or so back (in 4chan/g/) when Samsung had some sort of a campaign that gave it's users free android market credits. I don't remember how you had to authenticate yourself, but it was easy to fabricate and people did it multiple times over. As a result, people made really bare android apps to buy from themselves to turn that credit into real money.
I would assume it's purchased from stolen Apple IDs and/or credit cards. That seems a whole lot more straightforward and likely than someone handing out dirty money to a bunch of people with legit Apple accounts.
I think the issue here is this part :<p>"One explanation for this could be money laundering"<p>Selling some useless crap for stupid prices is one of the easiest laundering techniques beloved of many people trying to account for a sudden influx of wealth. Oh ? The suitcase of cash, well it's like this, I sold some old jeans, my wrecked chevvy and a busted tennis raquet to some nameless guy down the [pub|bowling alley|policemans annual ball] and he gave me like $250,000 in this suitcase for them.<p>I'm sure some of these apps are people having a laugh and then getting an even bigger laugh when someone actually pays the stupid price tag they put on. However, at least some of this has a distinct whiff of laundry detergent and it's always useful to have some schmucks innocently purchasing thrown in for good measure to delay investigators as they follow dead ends to people with more money than sense.
Robot book publishing is really interesting. I think it peaked sometime around 2010-2011 when a lot of "robot books" were available on Amazon. Read more:<p><a href="http://www.chrisrand.com/blog/2010/02/odd-tale-alphascript-publishing-betascript-publishing/" rel="nofollow">http://www.chrisrand.com/blog/2010/02/odd-tale-alphascript-p...</a>
When I was building the search for a big ecommerce books site (approximately 20 million products), it was a nightmare trying to filter the print-on-demand products. At the time they were creating new "publishers" on an almost weekly-basis, we were constantly having to tweak our blacklists. The big problem was caused by the titles of all these books being stuffed full of keywords, so for almost any conceivable search they would show up quite prominently.<p>There were some technological solutions we implemented, but it was a major annoyance all the same.
Arbitrage adds market making value. Just like trading desks that make it so I dont have to (physically) find a person who has apple shares in order to buy some. By making a well (or better) run market, prices can converge to their true value. The seller of the shares can potentially sell to more buyers, therefore finding the highest price possible. The buyer can potentially buy from more sellers therefore finding the lowest price possible. Between the two we get the "most agreeable" pricing .<p>This is why selling CDs of free things on ebay converged down to the price of a CD + Shipping . Similarly its why (at least for now) bitcoins ought to hang out around the cost of electricity + the capital cost of ASICs ... If the price is much lower, dont mine, if the price is much higher its cheaper to buy electricity and ASICs than to buy bitcoins.
"<i>And, more importantly, you don't contribute to the wealth of people whose target market is 'the inattentive, ignorant, and preferably inebriated'.</i>"<p>Hey, hey! Let's not get crazy.<p>If everyone did that, the first-world economy would disintegrate.
As someone who does not have a lot of money, this article's title intrigued me. However, I was disappointed to discover that the article did not actually provide ways to get money for nothing. Overall, I was overall not very satisfied with the experience of reading this article, mostly because it did not provide me with ways of obtaining money for nothing, even though the title suggested it would. I would not recommend the article to anybody who is seeking to find ways to obtain money for nothing, as the article does not contain such information, and it would be a disappointment for them as well.
OT, but related: One way to eliminate the lower price competitors is to "buy" their stuff, but with a card that has no money/credit on it. It'll be 10 days before Amazon allows the item to re-listed.<p>Had this happen to me three times in a row on the same item. Why do arbitrage when you can simply nuke any lower-priced competition at no cost?<p>In my case, every other item for sale, regardless of seller, was at least $150 higher. (I eventually sold the item on Craigslist for cash.)
Now look at them yo-yo's that's the way you do it you code the app on the iPhone store.
That ain't workin' that's the way you do it Money for nothin' and chicks for free
The money laundering hypothesis appears a lot, however I'm not sure I buy it -- the complexity and cost of getting many people involved, with many accounts and payment methods (themselves all tracked), all to then pay 30% to Apple on top, seems like a very convoluted and inefficient method. Worse, the goal of money laundering is to do it as subtly and legitimate-looking as possible, and putting garbage apps at ridiculous prices doesn't seem to meet that requirement.<p>It seems more likely that someone was trying to game the charts: Some categories need surprisingly little revenue to top, and each of these apps started at ridiculous prices, dropping to the normal $0.99 a month later. Some very naive person may have thought "investing" in buying only a few copies of their app (getting back 70% of it, or even more if they bought discounted iTunes cards) would get them enough exposure that it would pay back (whether through future purchases of the app, or as some sort of backstop to demonstrate their excellence as an iOS developer, etc). This is, it's worth noting, exactly how many books get on best seller charts, particularly in the smaller-market, easily manipulated categories. ^1<p>Just as a point of reference, I implemented anti-money laundering systems for a banking conglomerate, so I have been deeply involved in analyzing money laundering schemes.<p>I should add that I would <i>love</i> to make money for "nothing". To make the next Flappy Bird. Don't we all? To be very negative about that has the unpleasant stench of jealousy.<p>^1 - <a href="http://online.wsj.com/news/articles/SB10001424127887323864304578316143623600544" rel="nofollow">http://online.wsj.com/news/articles/SB1000142412788732386430...</a>