Are you accepting bank transfer as payment? Some traders have had their bank account frozen when doing that until they provide details as to the nature of those funds received. And from there, depending on your response, the bank may take additional measures.

So this is not without financial risk, at a minimum. The higher your volume (size per trade and/or number of trades), the greater the likelihood you receive closer scrutiny. Many small-ish traders (e.g., just a few trades per month) do this type of trading and their bank doesn't hassle them, though even that can vary from one bank to the next as well.

Additionally, a centralized exchange may notice your active trading patterns and may do the same -- freeze your account and insist that you provide further information about a trade (or trades).

These drawbacks help to explain why a 5 to 10% premium when selling is in the normal range.

Now, some arbitrage traders avoid the centralized exchanges by trading both sides. They buy at a price a little below spot, and then sell at a premium. There are sellers who do not wish to use a centralized exchange and thus are willing to sell at a discount through Bisq (and/or other KYC-Free P2P trading platforms).

And finally, there are regulations in various jurisdictions that may apply when trading person-to-person. There have been a few traders that did stuff and probably knew better but did certain things anyway (e.g., structured large trades so each transactoin was smaller than some threshold that required reporting) such that they became a target and then got in trouble with the law.