Turning reselling into a real business

Introduction

A reader Nick sent me a couple of links the other day about people who do Amazon FBA since he sees me learning and ramping up on FBA.  These people do FBA FULL-TIME as a source of income whereas I’m sure you and I are doing it more as a ‘hobby’ and ‘collecting miles and points.’  These are public links so I hope he doesn’t mind me sharing (it’s not like I’m killing a deal by sharing, right); here’s one of them – Online Selling Experiment.  These guys are doing almost $100K A MONTH of sales.  I haven’t gone through all of his site, but it’s very similar to mine (where he catalogs his current monthly sales.)  He seems to be buying clearance items from brick & mortar stores and reselling (hopefully he’s not using a debit card to buy these items.  GASP!)  When I’m bored, I’ll go through his entire site since there’s a wealth of knowledge there.

Private Labeling

What is private labeling you ask?  You know how Kroger and Safeway have their own brand of oatmeal, detergent, shampoo, etc?  You know how there are a hundred “brands” of selfie sticks and portable battery chargers on Amazon?  Yes, that’s private labeling.  You basically contact a manufacturer and ask them to slap your brand on the box.  I’m pretty sure you can’t just ask Procter & Gamble to slap “MPD’s Sweet Shampoo” on a would-be bottle of Pantene (although they did experiment with this back then with reflect.com), so it doesn’t take a rocket scientist to see where the low hanging fruit is.

Why even do this?

I told you guys already that I have more miles and points than I know what to do with.  And if need be, I can apply for credit cards or resell to earn miles easily.  Therefore, my “manufactured spend” is basically to make money.  You can fool yourself by saying that those monthly Redbird loads are helping you pay for your next vacation, but in reality, you are just getting a huge discount on your next vacation.  Here’s an example – let’s say you needed 25K miles for a free domestic flight.  You would need 5 months of $5K monthly Redbird loads.  This will take 10 $500 gift cards x 5 months x $4.95 fees = $247.50 in fees.  If that flight costs say $400, then you “saved” or “profited” $150, right?  Your profit margin would then be $150 / $25,000 = 0.6%!!!  That’s basically what this hobby boils down to!

Now what if instead of doing 5 months of RB loads, you were able to slap “Miles per Day” on a re-branded selfie stick, sell $1,000 of them at a profit margin of 50%… BOOM!  $500!  This applies to GC churning at ~5% at best, my current reselling at around ~20%, etc.  I realize making $5 per selfie stick isn’t as glamorous as flying Suites class, but who says you can’t do both?  I have a reader who is the opposite of me where he owns his own business and is trying to rack up miles and points.  I told him I’d trade places with him any time of day.  Doesn’t this hobby just boil down to wanting to be financially independent?  Isn’t the guy who buys $2,000 of  gift cards and money orders per day for an $80 profit basically a small time entrepreneur?  How is he different from me reselling a Roomba for an $80 profit?  He’s decided his method is easier, lower risk, and less time consuming.  And that’s fine.  Some people love corporate life.  Some love reselling.  Some love gift card churning.  Some love driving to Wamart (gasp!)  But which one of those methods is more scalable and can make him say a $200,000 income without fear of being shut down?  This reminds me of Al Bundy’s closet business on “Modern Family” by the way; I swear he hardly works.  Wouldn’t you want Sofia Vergara too?

Conclusion

This has been an idea I’ve been thinking of for 8 years now!  I’ve just been too lazy to get up on my ass and do it.  That and I’m too “comfortable” in corporate life.  Does that sound like your situation?  I think now instead of spending hours looking for things to buy from retailers who will eventually ban me, I put that time to finding an item I can private label and resell.  My friends say I’m a hustler and reselling is my forte.  I just haven’t taken it to the next level and actually turn it into a business.  This “hobby” is fun, but at the end of the day, I’d rather buy my own bottle of Dom than be served a bottle of Dom.  This blog may morph a little bit, but I hope you join me for the ride.  You know I’ll still be finding ways to accumulate massive points and miles along the way.