Last year, I proclaimed that 2016 is the year of reselling. And since there’s no real way to prove I was right or wrong, I’ll just go ahead and say that it was true. #alternativefacts. No really, when freaking Matt of all people (Mr. $1,000 gig himself) starts reselling, then I’m going to say I straight called it! To be honest, I don’t even know what Matt does all day; I just know he likes FIRE (not the temperature; the financial independence.) Oren went pretty hard into reselling. Trevor has a paid FB membership club.
However, it was also the year the half-assed resellers stopped reselling (like myself.) What I mean by a HAR is someone who just sorta dabbles into FBA, but now has stopped due to all the FBA restrictions like Apple products. I’m not even sure what can and can’t be sold on FBA these days. I just hear from the HARs that there’s just too much competition these days for it to be worth their time. I still know a few people who are still hard-core reselling hundreds of thousands a year though, but they devote a lot of time into sourcing and finding products that don’t hit Slickdeals. The HAR’s have just renamed themselves “boutique resellers” and only resell hot items.
2017 is the year of gift card reselling
Due to many MS avenues dying in 2016, it’s getting harder and harder to liquidate gift cards. And who knows what’s going to happen to debit cards and Dodd-Frank… It’s funny because I used to hate gift card reselling. I just didn’t think the time of peeling gift cards and mailing them in was worth the 1-2% of margin. However, things have changed quite a bit since I formed that opinion – most retailers have moved to electronic versions of gift cards. And retailers like Raise have made it quite easy to resell gift cards. You still have to peel off codes, but the stress of having to mail in cards and risk of losing cards in the mail are gone.
Yes Vinh, but the fees are still too high
Right. If you ever read a DOC post on a deal, you’ll notice that usually the sell rate for a gift card is lower than the buy price. For example, let’s say there’s a Staples sale on $100 Nike gift cards for $85 (85%). If you try to sell this to Cardcash or Giftcardzen, you’ll only get 82-83% for it. Well that’s no bueno. If you try to sell it on Raise yourself, you’ll have to list it at a 6% discount ($94). Once you factor in the 12% fee, you’ll only net 82.7%. Well that’s no bueno either.
Introducing the gift card arbitrage
One of the great things about America is when there is an opportunity to make money, someone will find a way to do it. You as a lone reader most likely can’t get the bulk sell rates just because you are too small time. But let’s say you were able to pool your gift cards with say 50 other people that you trust. Then the 50 of you will now have the clout to get the bulk sell rates! This means now you and your 50 friends can sell that Nike gift card for at least 85%. That means you’ve essentially earned 5X on your Ink for “free”….all in your pajamas! This beats buying a $300 VGC for $9, driving to liquidate the VGC and paying 0.7 cents per point.
Scaling is an issue
Of course the classic MS’er will say, “Well usually there are quantity limits” and it’s not scalable. Well, he is partially right. There will be limits on GC sales. However if you read DOC, you’ll notice there’s at least 1-2 GC deals PER WEEK. This excludes all the AMEX offer deals too (cough Neiman Marcus.) Plus you don’t want to go too hard anyway else you’ll be banned from the store or the bank like yours truly.
The way I see it, this is sort of like the new Amazon Payments back in the day where you got a free 1,000 points a month. You’re not going to get points rich in a day with GC reselling. I liken it to making a bunt or hitting singles. You’re not going to hit a home run, but at least you’ll continually get on base. A few hundred spent on Nike, a few hundred spent on Neiman’s, a few hundred spent on Paypal Digital Gifts… next thing you know, by the end of the month, you’ll have earned a few thousand points and have some change for some Starbucks or free gas.
Sounds too good to be true
Well it’s not all roses. There will be times when Paypal sends you a card with a $0 balance and you have to follow up with them. There will be times that you typed in the code wrong. There will be times where you hate your life for having to process 750 Starbucks $15 cards. Hey, not everything in life is easy.
So there you have it. That’s my prediction for 2017. If you are looking for a few thousand points a month with minimal effort, you should look into this. If you want to make a few thousand DOLLARS a month, look elsewhere….like reselling. Just remember, the two of them don’t have to be mutually exclusive.