Learn the basics of P2P trading and why it's the best way to trade cryptocurrencies.
Taking steps to become a peer-to-peer vendor can be far easier if you break it down into a series of smaller decisions. There's no need to get overwhelmed when starting your trading journey, especially if you take a little time to prepare.
What Do You Need to Become a Vendor?
You don't need much to become a vendor buying or selling crypto P2P. Whether you are looking to trade more significant amounts or just a few dollars at a time, P2P trading is something you can easily explore as a side hustle, secondary income, or a full-time business for yourself where you can make money trading cryptocurrency.
Don't think that just because you don't have access to many resources, you can't become a vendor; all over the world, people are getting involved in trading with only a few dollars or a small amount of cryptocurrency available to them.
Get started with as little as:
- An email address
- Internet access
- A small amount of money or cryptocurrency
- Some basic understanding of how cryptocurrency works
- A computer or smartphone (both is even more convenient)
Choosing the Right P2P Marketplace
In the early days of cryptocurrency, your options for P2P exchanges were somewhat limited. However, while this isn't the case anymore, some platforms have remained relatively static in their development and have not genuinely evolved with the rapidly shifting space of cryptocurrency over the years. Some platforms like LocalBitcoins have even increased restrictions on how you trade and started even taking more extreme measures like removing cash-in-person trading, one of the essential payment methods to provide access to underdeveloped regions or those struggling with economic instability.
Another big consideration to make when choosing a P2P marketplace is whether it provides non-custodial trading. Non-custodial trading is growing more important as people look to retain as much control over their assets as possible. With many incidents associated with fully custodial platforms occurring over the years resulting in huge losses affecting users, looking for a non-custodial option can help mitigate a lot of the trust required when using a marketplace for your trading activities.
Flexibility is also significant to consider when making your selection to ensure that you can access as many potential trading opportunities as possible. Some P2P marketplaces limit themselves to a single cryptocurrency (usually bitcoin). While bitcoin is an extremely popular digital asset to trade P2P, it's not the only one. Interest in Ethereum (ETH), newer cryptocurrencies like Polkadot (DOT) or Kusama (KSM), and even stablecoins are growing, resulting in them becoming more enticing to P2P traders.
While we suggest that you check out LocalCoinSwap, which covers all these elements well, ensure that you do your research and choose the right platform for you. One thing you'll find especially beneficial in selecting LocalCoinSwap as your P2P marketplace is that you aren't required to pre-fund sell offers. This means there's no requirement to have cryptocurrency waiting for trades, which can be hugely beneficial.
Don't just select a platform that suits your needs right now, but a platform that will grow with you into the future as you grow and become an established vendor.
Sourcing your Cryptocurrency When Selling
When you want to sell cryptocurrency for a profit, one crucial thing to consider is where you will get it. Ensuring you get it as close as you can to the market price (or even better below) can help you make good profit margins while offering a competitive price.
Buying on a Centralized Exchange:
Orderbook-style centralized exchanges operate across the world these days, making them often a suitable candidate to source your cryptocurrency for selling P2P. The problem is they have significant limitations in the payment methods they accept. Often you will be stuck with a bank or wire transfer when choosing this route, which is one of the many reasons P2P is still a preferable way to trade by so many people.
If you have access to suitable banking, this can be an option for buying your cryptocurrency close to the market price to then on-sell as a P2P vendor. You can even expand upon this and operate several different exchange accounts to look for the best price at any time you need to fill an order.
Using a More Common Payment Method:
If you plan to offer payment methods where supply is limited or those that demand a higher margin for one reason or another, you can simply opt to buy using a more common payment method. Choosing this approach to sourcing your crypto can help keep things simple as you can perform your full trade-flow on one platform.
One example of this method could be using local bank transfers to buy bitcoin at a relatively low margin, and then you could sell via your own trade offer in return for a much higher margin payment method like PayPal. When using this approach, do your research on the payment methods you plan to use to ensure you are accounting for any particular reasons that the higher-margin payment method is trading at such a premium; for example, PayPal often comes with higher than average chargeback risk.
Mining Cryptocurrency:
If you mine crypto already or are considering doing so, this can be a way for you to source cryptocurrency to sell. While bitcoin mining has a much higher barrier to entry than it once did as it requires expensive ASIC miners, GPU mining (and in some cases even CPU mining) is still popular among many altcoins.
Even if you are mining crypto that isn't commonly traded P2P, you can always exchange that on whatever exchanges you have access to that provide a trading pair with bitcoin or other popular cryptos for P2P trading. Mining can be a relatively passive activity once you're up and running; why not add to your business venture by spending a little of your free time making the most of your mined cryptocurrency.
Selling Goods and Services:
Many people that take an interest in P2P trading are already entrepreneurial types of people. If that sounds like you and you already dabble in other business ventures, you may be able to integrate bitcoin or other cryptocurrencies as payment methods that you accept. In this way, you can combine one revenue stream with another and perhaps increase your profitability for a business or service you provide with tight profit margins.
Get Paid With Bitcoin:
While getting paid in bitcoin isn't always the easiest thing to do, there is a lot of work out there in the growing crypto and blockchain space. If you are a freelancer, you are well-positioned to look for jobs that pay in crypto. If you are lucky enough to have an employer that is crypto-friendly, you may even be able to request to get some or all of your primary wage provided in crypto. With the growing number of blockchain use cases being explored, there's a range of opportunities in the space for you to investigate.
Suppose you do manage to get a job that pays in bitcoin or other cryptocurrencies. In that case, you'll likely be surprised by how convenient it can be, especially if you work for an international business and would usually have to wait on slow bank transfers and other inconvenient traditional payment types.
Explore Your Options
When you start trading, it's a great idea to have a solid think about what options you have to explore. Research which payment methods are prevalent in your region that you could potentially offer. Which cryptocurrencies would you like to trade? Are you interested in providing cash-in-person trades?
Spend some time exploring how you could be the best possible vendor and what you could offer your customers. While there's nothing wrong with getting your first trade offer up fast to get a handle on things, considering everything you can offer and following up a range of trade types you are confident providing can be a huge benefit when you are just getting started.
The more flexibility you can offer as a vendor, the more potential there is for you to grow into a successful P2P trader.
Tips for Getting Noticed as a New Vendor
- Spend time on your offer terms to show you are organized and serious.
- Keep your pricing competitive but not unrealistic or too good to be true.
- If you are only new to a platform but have traded before, import your trade history.
- Set "trading hours" that match your schedule so when you get a trade, you don't miss it.
- Enable your telegram or SMS notifications to help respond instantly to trades.
- Offer payment types that are in-demand and try and offer a good selection.
- Be open to trading internationally to reach more potential traders.
- Verify your phone and email to help your account look more established.
- Upload a catchy profile picture and make sure your profile looks complete.
- Complete a few trades with other vendors to build a successful trading history.