DO NOT TRY THIS AT HOME FOLKS!
For you MS old timers out there, you remember FM’s 1 million mile challenge. I loved reading the whole series. I know some people didn’t like him doing it because it shined a spotlight on MS, but whatever, haters are gonna hate, hate, hate. I believe half of his points came from cc bonus and the other half came from shopping portals, reselling, and other MS activities. It wasn’t as if he was buying $1 million of prepaid gift cards and converting them to money orders. I’m pretty sure no ill effect came out of it either (well,maybe he doomed Kohl’s 10X through Chase UR, but who really knows).
Anyway, I commented on Big Habitat’s page that I’m going to resell $20,000 worth of stuff to meet the minimum spend on the AMEX Business Platinum. At the time, I was joking, but now I think it’d be a fun challenge. So why am I doing this?
- I want to learn as much as I can about reselling through Amazon. You can read all the guides that you want online, but only when you have to pack and ship stuff out yourself will you learn. I also want to test FBA vs Marketplace more too.
- To understand if reselling or gift card churning is more lucrative. I realize you can churn faster with GC’s, but does reselling’s greater margin make up for it? Maybe Chasing the Points or Money Meta Game can do this same experiment with GC churning?
- To give you guys a good story. Honestly, I’m tired of hearing about Redcards and credit card offers.
Update – After a reader comment and talking it over with Trevor and Saianel on Twitter, we agreed this is very achievable. I could easily resell $20K at a loss or break even, but my goal with this is to MAXIMIZE my profit as much as possible. Therefore, I’ve decided to set a goal of 10% profit on the $20K of reselling (e.g. I’ll have $22K after I’ve sold everything). I will count portal cashback towards the goal and I’ll use FM’s point value to convert portal miles to cash rate. The bulk of the profit will rely on portal cashback and so that’s why I need to include it.
Please understand though that I’m basically going to frontload my spend by buying AGC’s first, then buying merchant gift cards, and then a final product. Even if I use Amazon FBA or Marketplace, I doubt I’ll actually sell all $20K of product in 3 months. Most likely, I’ll have sold $5K to $10K with $10K of remaining inventory, which will eventually sell. I know this is cheating, but let’s be realistic here. I’m not going to deeply discount inventory just so I can move it within 90 days. I’m also not going to stress myself out like poor FM did. At the end of the day, I want to know what my profit margin is going to be after I resell $20K worth of stuff (not including taxes I’ll have to pay.)
At time of this post, I’ve actually bought $12,000 of AGC’s already with TCB at 2.25% on 5/5 ($270 in gross cashback minus $23.70 in AGC fees = +$246.30). I’ve also converted ~$7000 to merchant gift cards already (avg discount 18%) and bought ~4,000 worth of merchandise (with $300 in portal cashback and 20,000 miles.) I’m waiting for the items to come in so I can ship them off to FBA. I’ll keep you guys posted weekly. Wish me luck. By the way, for all the gamblers out there, care to take a guess what my total profit/loss will be after all this?
I do have legitimate business spend and hospital bills coming up. Hopefully 5-10% with gift cards before paying. Hospital bills are easy way to liquidate gift cards, then refund yourself from HSA.
Sounds likea good challenge. Love the blog. Could you send the code so I could play along silently. I am not a reseller but have some ideas and big bills to mix with ms
Sent. Have a margin goal in mind your MS?
Whoa, hold the phone. A reselling challenge? On a card I just got through your site and am was informally doing anyway? Sounds like fun.. I may just have to jump in on this…
Hey now, who told Lebron James we were playing a pickup game? Seriously though, it’d be an honor to go against the reselling king and his legion of iPads. Bring it on BH!
Love this blog, so glad I found it. I’d ask you to marry me, but I think you’re taken already.
Can you still share that code? Thanks
Thanks and sent.
I’ll remind my wife how lucky she is to have such a wonderful blogger.
Epic challenge, very much in the vein of Frequent Miler’s 1 million mile/point challenge. Got a lot of great content on the site man, glad I came across it.
Thanks, I really appreciate that.
Ok. Guess I’m just hoping for another 2.25% TBC alert!
You and me both.
Lucky rewards is at 2%, BTW.
Thanks for the heads up.
I hear TCB’s ‘match’ works pretty well, so I’ll do that rather than actually use Lucky Reward.
Maybe I’m just being paranoid, but is there any reason to believe the AGC purchases won’t count towards the $20k spend requirement?
No, you’re just being paranoid. I did it to complete the inferior Amex biz 100K offer in January.
Awesome thanks!
Hey Vinh,
I kind of already completed your challenge by selling $20k in gift cards over the past 3 months. I wrote a post about it (http://moneymetagame.com/giftcards/three-months-of-gift-card-arbitrage-some-stats-and-whats-next/) if you haven’t seen it yet.
“Cash” profit ended up around 5% (~$1000), but that doesn’t include points/miles. I haven’t started doing AGC’s yet, but that would add a % or two to my margins. I expect my next $20k to be completed in about two months since I’ve ramped up volume since I started.
Good luck with your challenge though, I’ll definitely be keeping up with your stats!
Small note: Metagame is one word instead of 2. I haven’t been correcting people (DoC mostly) up to this point, but I should probably start.
Thanks for the comment Noah. I didn’t think your margin would be that high; that’s impressive. I thought you’d be near 0; maybe 1-2% up AT MOST. Wasn’t this due to the Safeway Old Navy 20% off though? And maybe you used a 5% card at groceries? If you rule out the ON GC’s and look at only reselling GC’s from portal to portal, what would your rate have been?
I’m glad it also took you 3 months, so we can have a similar time period in our comparisons.
Noted on the blog name. Are ppl referring to your site as MMG?
I think I ended up moving around $6k worth of Gap/Old Navy cards from Safeway, but those only had a profit margin of 1-3% before cc. I didn’t use a grocery card for most of them because I’m earning miles for a particular trip at the moment.
Ebay has been the biggest winner by far, but I also hop around to the latest Amex Offers, Staples deals, and everything else if it’s profitable. I can get some more detailed numbers later today when I have my computer in front of me, but don’t want to give away EXACTLY what I’m doing.
As for people referring to my blog, it just started happening so there’s not really a pattern yet. Whatever you want to use is fine, splitting metagame into two words is the only thing that’s bugged me so far =P
Hmm that’s a good point. When I think GC churning, I think of GC arbitrage where you buy from site1 to sell to site2, but really it’s buy GCs from wherever (amex offers, ebay, safeway) and sell for profit. The reselling aspect is instead of selling that GC at a discount, use it to buy merchandise and flip for profit. It’ll be interesting to see what my margin is after everything’s said and done.
Yeah, Chasing the Points has more experience with consistent arbitrage for miles/points, whereas I tend to hop from deal to deal. My margin is better, but it can only scale as high as the deals available at any given time, so there’s a ceiling.
The more I think about it, gift card arbitrage and reselling products is really similar. We’re just checking our email (and everywhere else) for slightly different deals. Big Habitat might get excited about a 20% off Staples coupon while I get excited about 20% off Gap gift cards, but at the end of the day, we’re just buying something at a rate below market value that can be fairly easily resold and generating points/miles/cash in the process.
This is exciting! Good luck!! I’ll be following your experiment closely since I’ve been doubtful about the profitability of reselling, and have been sticking to GC churning at breakeven, mostly.
Curious about the AGC to merchant GC step: Where do you buy the discounted cards with AGC? Do you just buy them from Raise/Cardpool/GCZen/etc/etc? How do you make sure you spend down the entire balance of the AGC?
I ask because I have $3000 worth of of $100 and $200 AGCs from last month when OD didn’t have any activation fees…since the demise of CC loads to RB, I’ve been slowly liquidating them by buying Sephora/Gap GCs at Staples last week, and I bought a Paypal MyCash card once (but don’t want to scale that due to potential Paypal issues).
I haven’t been using the AGCs online since they’re often odd numbers (a $200 GC for $178.37 – how do I liquidate the remaining $21.63 on the card if you can’t split tender online?). Any suggestions? Thanks 🙂
Great questions Esther.
1) Raise will accept AGC just fine. I don’t think Cardpool does; havn’t tried the others.
2) For the remaining balance (<$100), I used to pay my Ebay fees with them, but now my strategy is to just use them at grocery stores when I buy actual groceries. If you already have a 5% grocery card, you should use that, but if you don't (I don't), then if you think about it, the AGC netted you 4% gross (assuming you bought the AGC with a 2% card + portal 2% = 4% gross minus the minimal AGC fee). That 4% gross is higher than say a Discover Miles 3% card. The good thing about groceries is it'll auto deduct as well. Not 100% scalable, but that's the best idea I've come up with (unless someone else has a better idea). Maybe I'll write a post about this later.
I usually liquidate the random remaining balances into Amazon gift cards for my own account, but that won’t scale if you don’t spend money there often.
Walmart also allows you to purchase gift cards in any denomination and I think you can repeatedly use multiple gift cards to purchase more gift cards to slowly combine them into a single card (someone correct me if I’m wrong, I’ve only split gift cards, haven’t combined them yet). A solid plan if you’re going to buy things at Walmart, otherwise reselling for ~90% might be too big of a cut to be worth it.
Ah that’s a good tip too. Combine your small AGC’s to a store GC at Walmart. Also works well with the Sams Amex offer going on.
That’s a sporty but very achievable challenge! I’m curious, are you thinking a range? E.g. when FrequentMiler did his Million Mile Madness, I think he set an overall budget of $1,000 (e.g. couldn’t have a loss of more than $1,000 I think, although he ended up better off). I think that is really where the challenge will be.
Good luck! I certainly look forward to reading about it!
Challenge accepted! 10% profit is the goal.
20k on Amazon is nothing. An iPad already runs at 350-400. Sell ten of those, Roombas on Staples, electronics on Groupon, hard drives, and headphones. I would be more impressed at 100k and breaking even.
Hey Charles, no one is stopping you from doing the same thing.
For the record, I am trying to maximize profit on this deal. Not break even. I could easily break even on 20K, but I want to maximize my profits on the 20K. That’s the gist of the experiment; not to lose or break even.
Nice! I always hate eBay. Do you mind share the Amex 150k code? Thanks
Check your email. I hate eBay too, but it’s a necessary evil to sell things you can’t sell on Amazon like NEW Samsung or Sony stuff.
Wow, this would be a good read. Looking forward to the series. Had my first FBA experience last week, and it was so much better than doing all the individual packing by yourself. I just need to be better at picking stuff for reselling now (that is the hard part)!!
Thanks KP. I can relate – it’s so much easier and cheaper to send 5 items in one box instead of packing every single item 1-1.