The Travel Arbitrage Challenge

Chris, a loyal reader (natch), poses the following challenge. He is planning to travel, perhaps to Venezuela, but other countries are open. He’d like to profit from an arbitrage opportunity which could be due to official and un-official exchange rates or it could be a goods-based arbitrage. At one point, for example, you could do quite well bringing condoms to Russia but no longer. Nothing illegal especially on the import side or nothing too illegal. I get the feeling he would go for bringing in Cuban cigars if that were his best bet.

Thus, MR readers, the challenge. What country and what arbitrage?

As for me, I always eat well and get a haircut when I’m in a poor country (thanks Bela Balassa) but that arbitrage won’t pay for the trip. Can you do better?


You are not seriously asking experienced travelers to help close their own arb opportunity?

You can make maybe 100 bucks max with under the radar smuggling of pirated dvds and cartons of cigarettes out of my country, but that's it. If it were possible to fund a trip with arbitrage, I assure you I would have done it already. The law of one price holds.

A friend of mine used to bring bags of bikinis back from Brazil. He would then hawk them to female guests aboard his sailboat. I'm not sure how much money he made, but he did get a lot of enjoyment out of it.

China. Customs is pretty easy to get through. Just don't pack your back completely full of iPads or something. There actually is a thriving business where people act as buyers for locals when they go abroad. I go for low weight items with high markups.

Yeah, I guess I vote for this one. Go to Beijing's Silk Market and get as many fake Rolex watches as you can for $5. Some of them even tell time, and from a distance it's hard to see if they are fake or not. Other such expensive watches can be had--all for $5 US (as of a few years ago, around 2007, when I last went). But US Customs might give you a hard time, if they want to be tough--even Greek customs gave me a bit of a hard time until I smooth talked my way past them.

You can buy decent fake Rolex watches on Amazon cheaply and easily.

Rolex: 3,621 Wristwatches by Kesaharu Imai (Dec 30, 2009)

this was a book

Ah, yes. Powdered milk. I've heard that people returning to China cram their bags full of it.

In China you can make money both ways. On the way in bring high-end fashion brands that sell at a premium and on the way back stock up on well-made knockoffs. Of course to sell the stuff you brought in you will probably need a local connection who trusts you and your documentation that the stuff you bought stateside is legit.


Probably Illegal: Take an XBox One with you to Brazil. This will pay for your trip. Should net near $1k USD

I've observed a ~$300 to $400 difference on higher end laptops between the US & India. Still, too little to take care of full flight fare.

Yes, game systems to Brazil. The PS4 will have an even higher markup, since Microsoft is paying some of the ruinous import taxes for consumers, but Sony isn't.

I stand corrected - it was the PS4 I mean't to refer to!

Undoubtedly there will be a massive illegal trade.

Illegal to evade the import taxes, but I assume that your friend is already okay with evading customs or duties, since otherwise it's difficult to pay for one's trip with the arbitrage.

PS4 will be $400 in the USA, $1845 in Brazil.

I'm currently in Brazil on a temporary assignment. Pretty much any consumer electronics product sells for 2x to 4x its US price, and if the item's price is under USD 500 you are within the law going through Customs without declaring it.
A late-model cellphone sells here for USD 500 with a two-year contract (for comparison purposes, a carrier-free Nexus 4 sells for USD 250 in the US).
Some surprising items: approximately six months before moving here I bought a Panasonic 55-inch TV for USD 890 on Amazon. I've seen the same model here for USD 4,000. Of course, it's really hard to ship a 55-inch TV as baggage... but perhaps there are arbitrage opportunities related to my hobby of distance running: Mizuno running shoes are all the rage in here at USD 500 a pair (USD 100 in the US, less if you find them on sale), a basic GPS watch is sold here for USD 900 against USD 200 in the US. The downside is that most middle-upper or upper class Brazilians who may care for these items can buy them during their frequent shopping trips to Miami rather than buying them from you (I believe this may also apply to the PS4 arbitrage opportunity discussed above).
While there may not be many arbitrage opportunities from the US, I believe many Brazilians pay for their shopping trips to Miami via arbitrage, especially if they bring back items of clothing or personal electronics which I assume they do not declare as they clear Customs.

Certainly true that many upper middle and upper class Brazilians buy them for themselves by traveling to the US, but you can still make some good money on consumer electronics, particularly new and hot items like the PS4 (in a couple months). A few years ago the PS2, even though old news in the US, could still be sold for a decent profit in Brazil, according to my brother who was there on a temporary assignment as well.

You don't want to pack 10 of the same thing in your luggage, but you don't have to.

This one. It is illegal based on my understanding of the law. Other electronics, iPads, etc. have a huge mark up as well. Go see the World Cup.

I believe driving a car from Southern Europe to West Africa fits the bill.

Carrying documents/valuables to geographically remote areas for a specialty air express company can help with transport costs.

Bringing sanity to Washington?

No one in Washington is going to pay for sanity. It's not an asset in that town.

It depreciates too fast.

Can he get hold of gray market clothing from the Chinese factories of the big italian and English fashion houses operating there to sell abroad? If not a lower arbitrage might be to buy genuine items abroad to resell in China. I understand that bags from LV, Coach, Hermes, etc sell for a big markup in China. Same for high end Bordeaux wines, other small fashion items (specialty ties,etc.). Maybe shoes from Lobb or E Green? These all require travel to Europe. for Venezuela only my original idea might work. I cant imagine what carryon items V has that China wants.

You can actually get a lot taking guitars to Germany and selling them. Though you often run into issues with customs. Try at your own risk.

1. Bring dried mangoes back from the Philippines. Already packaged up, easy to carry.
2. Refined sugar is cheaper almost anywhere than in the U.S. (although difficult to carry in quantity)
3. Bring American ginseng to Asia, if you can identify the high quality stuff. Bring pu-er cha back from Taiwan or China to America (again, requires speciailized knowledge to identify high quality teas from the mediocre stuff.

Bring calamansi back from the Philippines! This cross between a lime and an orange, about the size of a marble or golf ball, is exquisite. Some fruit juice company in the USA should market it.

Also fake rubies from Thailand look good--they don't look at all like cut and dyed glass which they are--and will sell for a nice markup in the USA maybe.

Calamansis are perishable and customs has a good way of sniffing out fresh foods. Dried Mangoes, on the other hand, can probably last a couple of years, and are already packaged up so they don't have to be declared as raw fruits would.

You'll also get a lot worse than a bit of tax bringing in illegal raw plants. Just a terrible idea, and something anyone who travels internationally a lot should know quite well.

Another point for 15 year old virgin poser theory.

Monkeys, as well as most animals aside from humans, are, though fascinating in their own right, very conservative and mature in thought, and not that creative compared to humans. Some people are the same way. Especially common in menial jobs and occupations. You see my friend, I take your 15 yo poser comment as a compliment. Goodbye pedestrian! ;-)

Come to Bosnia and Herzegovina. Bring as much iphones, ipods and ipads as you can. You can sell them for at least 100-200 euro profit. You can bring home cheap alcohol and cigarettes. You can eat extremely well really cheap and take a haircut for around 2-3 euros.

this is the best idea so far

If he's already going to Venezuela, be a badass and do the Columbia/Venezuela gasoline exchange. Obviously, you're creating some pretty significant non-financial risk.

baby formula, Diapers -> China
Iphones -> china (ironically, since they are made in china)
Toilet Paper -> Argentina

Not much profit anymore selling Iphones in China, sadly. In the past when Iphones were released earlier in the US than China, you could bring 10 iphones in your suitcase without any trouble and make around $700-800 per.

How do you actually sell 10 iphones in China if you don't have any gray market contacts? Just standing on street and selling them to people out of your jacket?

Approach any counter/shop/stall at an electronics "fair" "market" "mall" etc in china and offer to sell them iphones from america.

From this very blog: linking to : The Great Norwegian-Baltic Diaper Arbitrage.

Cosmetic surgery in Colombia (and probably many other countires, too)

Import a Russian / East EU mail order bride who you then resell. All voluntary, of course. Too illegal?

Ok, for a softer version just marry her to get her US citizenship. The arbitrage probably pays for a lifetime of trips.

@Rahul--you are correct. But rumor has it the INS will only allow three such marriages (and divorces) before they investigate the groom for mail order bride fraud, which in theory can get you put in jail (not to be confused with mail fraud, though if you use the US Postal Service to write your love letters they'll probably try and get you for that too).

Ray, based on some recent comments you've made here, your purview in this arena should not be doubted. =)

He's already on number three?

This is the best idea although somewhat illegal. But, marrying for citizenship can get you upwards of $20,000 if my foreign friends can be trusted which in the three years of marriage it takes to get citizenship is totally worth it.

When I was on deployment to Egypt a long time ago. a lot of guys on my ship would load up on saffron spice. Cheap in Egypt, very $$$ in USA.

Is butter and Norway still a thing?

Is the price of butter in Bangladesh still correlated with world GDP growth? (Google this). If so, you can manipulate world GDP growth by dumping Norwegian butter into Bangladesh, driving down the price and causing a recession which you can them profit from by shorting the stock market. Dr. Evil of Austin Powers would be pleased with such a dastardly plan.

You, sir, are on a roll.

Higher end electronics and computers in Chile had a huge mark-up several years ago. I figured that I could entirely pay for my trip down there by bringing two Macs books, two ipods, and two half decent digital cameras. All legal, well sort of.

Energy saving light bulbs in the UK used to be heavily discounted (due in part to government subsidies); I knew someone that would take a large number to Thailand where they would fetch a price a few times greater than what they cost him in the UK. He claimed he could pay for his flight.

Bring sugar from Canada to America, or cheese the other way around

Don't know about Venezuela, but you make can quite a bit of money bringing Apple products to Turkey. An iPad can go for almost twice as much there. You can do it with liquor too, to a lesser extent.

For the simplest - paper dollars to Argentina, an estimated 70% markup over the official rate.

Yeah, good luck buying dollars at the official rate.

Engineering textbooks in India (and other countries with subsidized texts)

Retail in the US = $100-150.
In India = $4

I once effectively paid for my airfare to India when I bought 15 textbooks that i wanted to have.

Admittedly, they're low quality paper, but it's the information you want. And customs is not going to stop you for books.

Doesn't work any more, but back when the Canadian dollar was worth U$.70, you could stock up on McDonalds Gift Certificates in Windsor and then use them in Detroit.

Since the research is already available, just check the Big Mac index-- and plan your trip accordingly. Though, you'll need a big suitcase.

If your reader's ideal holiday is a road trip across Siberia, then according to this article:
there is a fairly large arbitrage opportunity in second-hand Japanese cars between Vladivostok and western Russia.

A friend in Brazil asked me to bring him an iMac year ago. Bad choice, I later realized, because they're so big, but the moral is that I got caught and had to pay an extra 25% import tax on top of the (then-)standard 50%.

Plus I got spooked for about 30 minutes while they processed me.

In order to correctly calculate expected return, Chris need to estimate a probability p with which customs will detect him (assuming the plan involves customs evasion), and the cost of getting caught.

From a friend in Venezuela:

"Yexela Anderson: with only a Amazon Gift Card, you can buy whatever you want to official dollar price, and sell here what you bought with the price of black market dollar, 6.50 bs is an official dollar's price , while the parallel one is by above 50, 00 ... It is the business of the rich, the devaluation only favors those with money"

When questioned on the legality of bringing gift cards to Venezuela, she first answered unambiguously "yes", then clarified with "well , nobody have to know about it "

Cuban cigars - east to west, that is. Gold jewelry in the ME (Dubai etc) used be sold at a significant discount compared to western valuations, not sure if that still holds.Also, maple syrup from Canada to the UK appears to be mildly profitable.

I got ripped off in Cuba buying so-called Cuban cigars that were bogus. They have counterfeit Cuban cigars in Cuba, as well as counterfeit dollars. The counterfeit dollars are obvious too--washed out yellowish-green paper, it's laughable. Maybe the dollars are made in North Korea and exchanged for Soviet-era weaponry?

Scarce in every country is the gentleman's consortium.

You can bring up to 70 lbs in each of 2 suitcases per person, plus carry-ons, to Brazil. You can bring in a PS4, camera, video camera, iPod, iPad, GPS, guitar, laptop and all sorts of electronics in a flight to Brazil, as long as the stuff is consistent with your status as a tourist. You do not have to sign them in; you do not have to carry them back out. You are not prohibited from using them up, throwing them away, or selling them. Taking in 10 iPads, however, would not be consistent with tourism but more like a business.

The best deal of all, especially for a young Amerikan male, is to import into the USSA a series of brides, each for 10 years only. You can do this five times, and each, after having shown how grateful she is over the10-year period before the divorce, will be entitled to share in your Social Security and Medicare benefits upon retirement or death, even if they were all so busy attending to you that they forgot to work. Their children will feed at the gummint trough too!.

This is especially attractive for Mormons, who would apparently be perfectly happy to live together with all 5 women and their 50 kids. Imagine the SS, Medicare, child-tax credit, food-stamp and low-income housing benefits 61 people could get over the 45-year period spent voting Democratic in this great country!

B.S. This is urban legend. The US INS will investigate you after three 'sham' marriages. And for a real marriage leading to kids with a foreign girl, that's harder to do than people think. Most people are like Steve Sailor here--they don't like dating outside their own narrow category of race--and that includes the Africans (maybe even especially the Africans, since they are so tribal). I will relate a true story to you: I asked, in Athens, an African guy from Cameroon to find me a real bride for marriage and a family, after convincing him I was serious, and after a weeks time, saw him again, and asked what he found. He said he asked but no girl from his country was willing to marry me, except as a sham way to get a visa. And in Athens I asked a black Brazilian girl to date me and she refused. But then her cousin or some relative showed up a year later--he was built nicely, like a model--and ended up dating and co-habitating with a hot blonde Greek girl. Go figure. I must be doing something wrong.

That's funny - when I was single, girls didn't have to be of a different race to not want to go out with me :-)

I know many, many Americans who have legitimately married foreigners.

At the moment, most Argentines can only buy dollars in the black market, but can buy international flight tickets at the official exchange rate (with an added tax, which is nevertheless quite less than than the difference between the official and unofficial exchange rates). So if you get a friend from Argentina to buy your flight tickets and pay them back in cash, you can save roughly 20-30% of your flight costs.

He is going to Venezuela?

Well, in that case, there is bound to be some opportunity in toilet paper.
There seems to bei a real shortage in Venezuela of this precious ressource

( )

There's some real pent up demand for people willing to be a donkey of regular goods across the China/Kazakh border. Everyone crossing can take up to 50kg without paying to much of import duties on the Kazakh side. If you travel lightly you can "donkey" some across if you don't mind the hassle. Getting a visa for Kazakhstan is a multiple day adventure though...

Travel to Manaus, Brazil. Withdraw Real from an ATM, take a bus to Venezuela, sell Real across the border (the further inland, the better the black market exchange rate). Rinse and repeat.

Never figured the gasoline arbitrage out of Venezuela to be any good, that one takes a lot of patience. Seen multiple mile queue's in Santa Helena on the Brazil border.

What is the next step after exchanging brazilian reales for venezuelan currency at the black market rate? Is there some way to exchange it back to reales at the official rate? Or some things that can be bought cheaply and brought back to Brazil?

sunscreen into any developing country especially asia.

Things I always get done abroad in cheap countries (plus I live in one):
* dentist
* haircut
* Buy prescription meds like anti-biotics, vaccinations
* Shoe repair, luggage repair, patching/sewing of clothes
* Eat well
* In Asia renting a motorbike is very cheap, like $5/day
* Foreign language school

Get a better job so you don't have to waste time on these nickle and dime games and can waste time carrying personal consumables both ways?

I mean, really, buying Chinese knock-offs at retail and bringing them to the U.S. where the Chinese have already delivered them wholesale? I've been to Beijing and I've been to downtown L.A. (and Moneterey Park), whatever price disparity was too small to notice.

I agree. Leave smuggling to the professionals.

It's one thing if you have friends or family in another country who want something and you take it to them. But the work of finding buyers for smuggled goods will surely eat yer profits, unless you enjoy seeking out shady strangers.

the quality of antique, novelty and specialty fabrics in the US for quilting is second to none in the world. A bolt of fabric bought in the US can be sold in the UK at 3X the price, quite reliably and readily. And it's perfectly legal, as it's a scarcity issue not a tax issue.
Of course, unless you are a quilter you likely won't "get" what fabric is desirable

Into China: Baby Formula, bottles (Dr. Brown), High-end breast pumps & accessories. High Quality supplements in large quantities (Multivitamins, fish oil, Ginseng), High quality, upscale jeans and other clothing for overweight people.
Out: Cuban cigars, Absinthe (special packaging), Dual-sim/multi-memory card cell phones, laptop knock-off batteries/power adaptors

"Nothing illegal especially on the import side or nothing too illegal."

Ah, well, that's just the thing: the two clauses in this sentence are sort of at war with each other in Venezuela. Practically everything he could import for sale in bolivars is illegal unless he goes through a legendarily cumbersome regulatory raj.

And, of course, checks at the airport are getting pretty stringent too. (These guys will LITERALLY sniff through your underwear ->

All that said, on a size-to-value ratio, his best bet is probably electronics. iPhones, say, or USB sticks. The implicit exchange rate on those can zip up north of 50 bolivars per dollar.

Problem is, to really make the big bucks, he needs to be able to BUY DOLLARS BACK at the controlled rate (6.30 per dollar.) And to do that, you need something I suspect your friend's going to have some trouble securing: a trusted inside contact inside the Currency Control Board (CADIVI) willing to green-light his administrative request for cheap hard currency.

Get one of those, and the actual item he imports makes no difference: he'll be a millionaire in almost no time no matter what he brings in.

What about second hand cars, there's still some running 70's era cars that could be bought up with illegal Bolivars, would those cars be easy to ship to say Europe or USA?

A bit like in Cuba, once Castro looses grip every single old car will be shipped to Miami within a week

One of the best arbitrage opportunities in the world is the border between Hong Kong and Shenzhen. On one side there's no sales tax on most luxuries but a high cost of living, on the other side there's high sales tax on luxuries but a low cost of living. Which is why smuggling of Apple products is rampant along the border.

When I was living in the US, every visit back to India would involve a visit to the dentist for a regular check-up and cleaning..

The BBC must be following this blog, see today's story:
30 October 2013 Last updated at 00:41 GMT

They are known as the mule women of Melilla. Every day they carry heavy loads across the border between the Spanish enclave and Morocco. Melilla is an important entry point for goods in to North Africa - and if the women can carry them, they can be imported in to Morocco duty-free.

Latifa claims her place in one of the rowdy queues made up of hundreds of women, and drops her load of 60kg (132lb) of used clothes. She has been doing this work for 24 years and will be paid three euros ($4.10 or £2.60) for transporting her bale across to Morocco. It is not work she chooses to do.

Through the 1990s lots of people in the former Soviet Union made their living by flying to Istanbul to purchase huge suitcase-fulls of clothing to sell in the local markets. There was even a term that described them: "economic tourists." The airport in Kyiv was always an interesting place when flights from Istanbul arrived -- baggage claim looked like a freight receiving yard. A colleague swore that he saw some bales of hay coming off the flight -- but I think he was exaggerating.

As has been mentioned, any electronics going into Brazil is a good way to make some decent cash. I just saw in a store in Rio some retail GoPros for an astonishing 1200 reais (I will def be bringing a few next time, just think how small they are). Basically, if you are just traveling to Brazil for a quick business trip, I don't think it's worth it. If you have more time though, like a few weeks, and have a good contacts base in Brazil, just make up an "inventory" sheet and start hawking everything to your contacts and their contacts, etc. I've spoken with many Brazilians who do the Miami haul yearly and come back and hawk all this stuff to all their friends who can't afford to get to the States.

* Digital camera's (High end Nikon's could pay up to a business class flight)
* Digital camera lenses, absurd prices here...
* Video game consoles and non pirated games
* Name brand cosmetics (tell female cousins/friends etc. and have them spread the word in their circles, they buy it all)
* Name brand watches

There is no need to travel abroad to take advantage of arbitrage opportunities. There are plenty such opportunities right here in the good ole' USA. For example.

-- Recycle cans/bottles. There are 13 states that pay deposits of either 5 cents or 10 cents on beverage containers. The others don't. Gather cans and bottles in those states (or pay homeless to gather them) then truck them into a state that refund deposits. Some states are more convenient to do this than others: some places have recycling centers that accept large quantities of any type of container. Doing this brings great karma in addition to profits. You help the environment, helps reduce litter and beautify public areas, and potentially even employ the homeless.

-- Cigarettes. Buy them in Virginia, sell them in New York. You could sell them directly to smokers by the carton at a discount. New York's prohibitive sin taxes make this possible.

Idea #1: Kramer tried that on Seinfeld.

I'm not sure about the environment. How much gas would you burn?

To make recycling cans worthwhile, you need to do it large scale, full-size pickup truck scale at the minimum. I tried doing this in college once with only a small car. This was in New York state, when all they had then were reverse vending machines that take cans one at a time. Even though the cans were wicked easy to find (after big partying weekends) it was a hassle getting them all redeemed. Might be easier now that there are businesses that specialize just in redeeming cans (for example, This happens because New York State gives bottle redeemers 7.5 cents per can they return.

So while it may not be BIG money, it is rather "easy" money. The cans are out there, everywhere...just waiting for someone to claim and return them.

Even electronics from the States to Europe is pretty good. A MacBook Pro retails for $1200 US on, and 1100 GBP on That's about a $500 profit by my reckoning. Not sure how much of it gets eaten up by tax, or what the markdown is on a second-hand MacBook.

Except you're not going to make a straight $500 doing that. Someone buying a MacbookPro on the British equivalent of Craigslist or whatever is not going to pay full retail, they're going to expect a discount. There also is the hassle factor of advertising, waiting around, and actually doing the transaction. I suppose you could find customers in advance and buy specifically what they want, although that is taking a risk that the customer doesn't flake out.

Flour or gasoline from Iran into Azerbaijan, Iraq or Afghanistan. Both are heavily subsidised in Iran.

Carpets. It would require specialized knowledge to avoid getting ripped off, and a willingness to go to unusual places, but you can find some great deals in central/south asia. It would be difficult but not impossible to clear $1000 on a high quality carpet, and four of those could easily fit in checked luggage.

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