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Manufactured Spending And Abuse Killed AMEX Offers

In the recent weeks it has been reported that American Express is now hard limiting offers to one per person. As a group the Manufactured Spending group, caused AMEX to close the loop hole. Money was bleeding out for all the cards. Unlike Citigroup, who were fined for poor IT protocol, AMEX took this opportunity to save money for themselves and their partners. Obtaining AMEX cards as an authorized user were given out like it was going out of style. It was far too easy.

What Caused AMEX To Kill AMEX Offers?

Abuse. Manufactured Spending. I’ve been in a fortunate position to be on the side of a company where an AMEX offer was solicited and can give high level details. 

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3PL Review: ShipBob

A 3PL is third party logistics, at a high level they cover all things in the logistics portion of the supply chain like warehousing and transportation. I’ve previously written about scaling your Amazon business using a storage unit. Today’s post will be a review of ShipBob, a somewhat new “technology” oriented start up trying to “disrupt” the logistics industry.

What 3PL Does For You

The following is not an endorsement for any of the companies, but just used as examples. There’s someone like Prime Zero Prep, Sell Tec Prep, and many others. Many people rely on prep centers in a sales tax free state like Oregon, New Hampshire, or Montana to juice the margins without needing to submit your resale certificate with the business. Sometimes, the business will flat out refuse like Target after the Lily Pulitzer fiasco. Another problem with prep centers are the retailers’ penchant for address bans and someone will be banned causing the address to be banned.

Who Is ShipBob? 

Apparently, ShipBob has been around for a while. I only learned of them last year after they were covered by the Wall Street Journal. Their business model is very simple. They open a bunch of warehouses near cities and have 2 day in transit ground coverage. They are doing 2 day transit because that is the “industry standard” thanks to Amazon Prime. To make money, they negotiate with the shippers and profit from the spread. The spread being what they charge to their customers and their negotiated low price. 

ShipBob Capabilities

ShipBob is like a small time competitor to Radial, but more”technology” oriented.  ShipBob connects to Shopify, Squarespace, ebay, Amazon, Magneto, Backerkit, Bigcommerce, Woocommerce, Cratejoy, Stitchlabs, Walmart, and Returnly. 

ShipBob’s connection capabilities allow automatic order syncing for fulfillment. This would be great for doing any business needing 2 day in transit fulfillment.

ShipBob also has Fulfillment By Amazon prep capabilities and that was the only thing that I utilized from ShipBob and my review will constitute only on the FBA prep services.

ShipBob’s Prep Services

What I like about ShipBob are the locations. I was able to have some product shipped to a couple of their facilities. That’s about all I like about ShipBob because the rest was a terrible experience. 

ShipBob is trying too hard and has persistently bad standard operating procedures.

3 Examples Of Their Ineptitude

First

They want to instill a process to contact a warehouse through Zendesk. Unfortunately, they outsource the process and they have to ask some point of contact at the warehouse to answer your inquiry. It’s an inefficient process to go through a middle person. What they should be doing is asking where the inquiry should be directed and you could be directed to the warehouse point of contact.

Second

I had freight picked up and they could not provide a copy of the bill of lading. Whoever signed for it never scanned it and threw it away. 

Third

Saved the “best” for last. In early April, I set up 6 pallets scheduled to be picked up with all of the Amazon labels ready. They ask 2 days’ notice, but I gave them 2 weeks because I would be away. I had scheduled a Friday for pickup and I was away Monday to Wednesday. By the time I had the chance to follow up, Shipbob somehow changed the status and put everything on hold and nothing was done.

I reached out to my rep and it took 4 weeks to get the pallets shipped. FOUR WEEKS! I wound up paying an extra month of storage with them and around $1500 in fees to label everything for Amazon. To rub more salt into the wounds, they increased the fees and would have been 50% cheaper to do it at Amazon.

ShipBob’s Response

All ShipBob could offer was an apology. Doesn’t matter with the real repercussions because of the systematic failures within their process. The least they could have done was waive the 2 months storage due to their errors.

Bottom Line

At this time, I could not recommend ShipBob to anyone who want to use their business 2 business services. I suppose inventory directly to the end customer Shipbob could handle, but anything B2B related they have lots to work on. It’s a shame really because they have some great locations. 

I Signed Up For Plastiq For Simplicity And Extending Payment Terms

A couple of weeks ago a representative from Plastiq reached out to me about the service and see if I would be interested in blogging about it. The timing was good as I haven’t MS’d in a very long time as I have had my head down reselling. The closest to manufactured spending that I have done would be purchasing inventory using my personal credit cards and using expense reports with Expensify to pay myself back. One of the things that I’ve done with the reselling business is to create systems and processes. In the event of selling the business, I could give a week’s session to the new owner and have a successful exit.

What Makes Plastiq Interesting

Some readers may know that I previously worked in New York City, then about 3 years ago started a new job in New Jersey. What many readers didn’t know last year around this time, I was laid off. It was the best thing for the company and myself. I couldn’t have been more pleased. I recently started working in NYC again with the commute eating up most of my free time. The office location is near the Holland Tunnel which is a little bit of a desert. With all that said, there’s little to no chance I would be doing any kind of manufactured spending. 

Having a direct connection with someone at Plastiq I was able to ask various questions that others might not cover because it’s not something they would ask.

Working Capital

I’ve talked about working capital a few times and the premise is leverage. Use other people’s money for as long as you can. The best part about Plastiq is putting charges that you couldn’t on a credit card. I had a vendor where I negotiated two third’s payment up front then the last third net 30 after delivery. Had I signed up for Plastiq, I would have been able to extend the final payment into almost 60 days before the payment would have been due. Plus, the 2.5% is a business expense that could be written off. 

Advanced Techniques With Plastiq

For the reselling, my primary bank is Bank of America and they have the biggest crock of crap for a Bank of America to Bank of America account charging $30. How ridiculous is that?

A regular ACH is $3 or $10.

 

Plastiq’s ACH takes 2 to 3 business days if ACH. This still goes along with working capital If a vendor offered something like 1%/10 net 30. Generally, if you pay within 10 business days of invoice you would save 1% , but you have to use cash. Using Plastiq, yes, a fee applies, but you could leverage the 1% discount.

 

More Advanced Techniques With Plastiq

Granted, this is only applies to a smaller subset of readers. Many of the bloggers talk about paying bills and mortgages with Plastiq, here is something that I haven’t seen covered.

When managing procurement, remember that everything is negotiable. You can do all kinds of fancy things like asking your vendor in California what the price is FOB and you find a 3PL nearby using their free shipping. There’s many things that you can try, but one of the things that makes Plastiq very unique for someone who resells is to negotiate the price as low as you can. Think of it like negotiating a car and then you spring it on the dealer that you have a trade in. In the negotiations you want everything taken out, especially if the supplier takes credit card. The 2.5% fee that Plastiq charges is better than the 3.5% that many businesses charge. Worse, you show your cards to the supplier that you want to pay with a credit card, they’ll bake the price with the credit card fee and would probably be more than the 2.5% from Plastiq. 

 

Drawback of Plastiq

International payments of Plastiq are only in US dollars. If you had a vendor that would only accept their local currency, you wouldn’t be able to use Plastiq. I wouldn’t mind seeing Plastiq one day add local currency and charge the credit card in the local currency. Then we could avoid the foreign transaction fees and get a more favorable local currency foreign exchange rate. 

 

Wrapping Up

If you haven’t signed up for Plastiq, you need to think if it works out for you. The 2.5% fee will add up. For every $10000 charged, that would be $250 extra spent. Would you be able to redeem the points worth more than $250 cash? 

If you signed up for Plastiq using my referral code at signup, I earn 1,000 fee free dollars (FFD) when you make payments totaling $500. You would also receive 500 FFDs for having made $500 in payments.

 

 

New Ritz Carlton Redemption – A Luxury Cruise

I recently came across a new luxury content site for the ultra rich called Penta, that’s part of Barron’s,. They’ve covered some interesting things in the past like a piece about Ritz Carlton yacht cruises

Reservations open this month and cruises are expected to start in 2020. This gives us, the travel hacking community, a bit of time to churn some points and redeem for a luxurious cruise. Perhaps it’ll be a good idea to manufacture spend Starwood Preferred points as they will be worth 3 Marriott points in the very near future.

 

From The Ritz Carlton Site:

Set sail on a journey of discovery with The Ritz-Carlton Yacht Collection. Designed to combine the luxury lifestyle of The Ritz-Carlton® and the casual freedom of a yachting vacation, The Ritz-Carlton Yacht Collection will offer bespoke voyages on the first of three custom-built yachts in 2020. Most voyages range from seven to ten nights, offering many overnight calls and uniquely curated experiences ashore. Each yacht will feature 149 suites, each with its own private terrace, and accommodate up to 298 guests in a relaxed, casually elegant atmosphere. As with The Ritz-Carlton® on land, each yacht will feature personalized service, elevated dining and luxury amenities. The yachts are also available for private charter.

 

On the Yacht site, we learn that there are cruises through the Caribbean, Mediterranean, and Northern Europe.

ritz carlton cruise destinations

 

There seems to be a lot of dates and prices already available for you to search.

florida ritz carlton yacht collection

 

I am a little surprised with the little to no coverage or press releases from Marriott.

In the loyalty page they say:

The Ritz-Carlton Yacht Collection offers the freedom to explore life’s most extraordinary experiences. Shortly, we will announce loyalty benefits for members of Marriott Rewards, Ritz-Carlton Rewards, and SPG. We look forward to recognizing our valued loyalty members and welcoming you aboard your private yachting oasis.

It will be interesting how the merger will take place and what is available for a cruise. Perhaps Matt can help us figure out how to get a free cruise.

Recent Credit Card Shut Downs Might Not Be From Manufactured Spending

Credit Card Shutdowns

As documented by Miles Per Day, Vinh has posted several credit card shutdowns from various readers as data points. The shut downs were all across the board, from too many credit cards to huge ramp up in spend to getting shut down and then getting their cards back among other stories.

However, because of our nature of being knee deep into manufactured spending we think that is the culprit. But really. Is it? We need to pause for a moment, zoom out a bit, and think at a more macro level. At a higher level, it might not be manufactured spending after all. There’s a bigger movement out there if you dive deeper into the industry as a whole.

Other Shutdown Factors

We’ll start with the obvious one that’s plastered all over the media today. Bitcoin.

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Back Door Method To Profiting From A Bank IPO

This post is one of those lesser known finance and quirky deals that my friend Personal Finance Digest is great at uncovering. I recently listened to this Planet Money episode starting at 9:25 mark:

The fine print sends a Midwestern family on a two-thousand-mile road trip to open dozens of bank accounts.

The Financial Quirk

That family understood how the American banking system works and profited from understanding the mutual savings bank. [continue reading…]

Amazon Protects Their Whole Foods Market Brands from Retail Arbitrage

In June 2017, Amazon announced their desire to purchase Whole Foods Market for $13.7 billion. When the Federal Trade Commission approved the deal, days later Amazon announced they would lower prices on many products.

Amazon Stops Retail Arbitrage of Whole Foods Market brands

It’s interesting to read that days after the acquisition that Amazon restricted all sellers of the Whole Foods Market brands like 365. In fact, Amazon was so kind to reimburse sellers who had Whole Foods products at an Amazon fulfillment center.

From SusanH@SellerSupport in this thread on Amazon:

Hello TigerWares Unlimited,

It is true that third party sellers will no longer be able to sell the Whole Foods brands, which includes as many as 24 different brand names. 

It is also true that any inventory currently in Amazon fulfillment centers will be credited for the replacement value, minus FBA fees.

We do have a path for sellers to follow if they are incorrectly impacted and their product is not associated with the Whole Foods brands. Please contact Seller Support if you need assistance.

I hope this helps clarify the situation.

-Susan

Amazon Prime 365 Everyday Value Brands

Amazon Prime 365 Everyday Value Brands

Most products shown as of writing this post are mostly Prime pantry. Clicking into a lentil listing we see that Amazon is the only seller

Amazon 365 Everyday Lentil Blend

Amazon 365 Everyday Lentil Blend

Additionally, if we tried to sell this Lentil package, ASIN B074H5LYDF, we will see this in our Seller Central portal:

Amazon 365 Everyday Lentil in Seller Central

Amazon 365 Everyday Lentil in Seller Central

 

Amazon Acts In Their Best Interests, Not Yours

Just remember that while you own your business selling products on Amazon utilizing their platform. You have no control. Amazon? They’ll do what they need to do in their best interests and making sure the customer will be happy at the end of the day. End of story.

Scale Your Reselling Business With Space

Trevor posted about the guest speakers for the next ResellingDO and motivated me to post about my efforts of scaling up before the DO. I haven’t spoken to any of the guest speakers or what they did to get to where they are now on scale. From the sounds of it, what I’ve done is a little bit different than what the awesome guest speakers will discuss.

Around this time last year, I reached a point where I outgrew the space I was using. There were too many Target boxes coming in and the working space was not ideal. Renting a UPS box was not an option because the issue of no working space remained. I began looking around for facilities that allowed pick up and drop offs of parcels of various local facilities. 

Scaling Up

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Monetizing Your Supply Chain: Sell Your Waste

Over the last 12 months, the growth in reselling has exceeded my expectations. In fact, I no longer manufacture spend. With all the purchases for reselling, I have been generating massive amounts of waste mostly wood and wood byproducts like cardboard and paper. Over time, I have received and collected a countless number of pallets.

 

Make Money From Your Supply Chain

What you need to remember is the well-known line, “one man’s trash is another man’s treasure.” As you will see, a 26 year old collects New Yorkers’ trash and sells the recyclables and generates nearly $10 million revenue. He knows that as a collector the state mandates a 3.5 cent per container handling fee. Imagine a team who goes to every restaurant, or a common sight that many New Yorkers will know, someone going through the trash collecting cans. The person sifting through often times garbage or recyclables just obtained 5 cents for the bottle deposit. They drop it off to Galvanize Group and receive 5 cents. Galvanize Group just earned 3.5 cents. Scale up and you have yourself $10 million revenue. 

Less than five years out of college, Cutler runs Galvanize Group, a four-year-old business that generates almost $10 million in annual revenue from collecting recyclable cans and bottles around the city and returning them to the distributors, who pay the 5-cent deposit plus a state-mandated 3.5-cent handling fee for each one. In the winter about 1 million empty containers of Coke, Poland Spring and other beverages consumed in the city are sorted weekly by about 35 full-time employees at his Mount Vernon warehouse. Volume doubles during the warmer months, when New Yorkers tend to consume more cold drinks, so he keeps his shop open 24 hours in the summer.

How It Pertains To You

Pallets

Now that you know “trash” is valuable, any of your byproducts from reselling has a resale value that could help recoup some costs. We’ll take the pallets that you might be receiving. Those pallets, especially American pallets, are worth some money. The price of a pallet largely depends on the grade and type of pallet. Grades can range from A to C and pallet types like American, European, Peco, or Chep pallets are some of the factors to the resale value.

To learn more about Chep pallets and tangentially on Peco, Planet Money has a great podcast about it.  Chep you will learn has the blue pallets and Peco with red. Because Peco and Chep pallets are leased to various companies, they do not fetch as much in the resale market. You will usually receive a “finder’s fee” for bringing it to them usually around $1. Those pallet companies will then contact Peco or Chep to retrieve their property.

This local pallet place is actually a little deceiving because they don’t pay for anything but an American pallet. They won’t pay out for a European pallet, but would take it as they could take some boards and runners and refurbish B or C quality pallets with the wood. 

Cardboard

Embarking on the reselling business, we receive lots of cardboard. Just imagine the level of cardboard, paper, or pallets that Amazon distribution centers receive from sellers like you and me. Not only are they making tons of money from the fees they collect, but they’re also selling our containers. If you use a prep center, I would hope they are selling all of the boxes because at the end of the day, it would help their bottom line and that helps you. If you ever look at the back of a CVS even they have a small baler that looks like this

 

Places like a supermarket or Target will have a larger baler that looks like this 

Supermarkets are probably the best places to look for ideas at how they monetize their waste. Their meat departments save all the fat and sell it to soap companies!

Cardboard also has a spot market like every other commodity. The going rate depending on the quality you sell is anywhere from $100 to $120 per ton. Yes, 2000 pounds for $100 to $120. While it is a lot of cardboard, this is something for you to consider when you expand. 

What It All Means

I am fortunate that all of these facilities are all extremely close to me, so transportation and time cost is low. Finding a local place is a fairly straightforward Google search. If you can’t find one, asking local small businesses is a sure-fire way to finding these facilities. It’s how I found the paper recycling and pallet company. I would prefer to sell the cardboard, but do not have the space to store it all. Instead of selling, I donate it to the recycling facility in large batches of about 60 to 80 pounds per trip and monetize the pallets. Local small to medium businesses are great if you are already a customer to pick up pallets for free. They do their best at giving them away because it costs them money to throw it into a dumpster.

 

Singapore Airlines Suite Class Review A380 Singapore SIN to New York JFK

The Singapore Suites experience is unlike any other that you will ever encounter in your lifetime.

My wife and I got to experience it firsthand May 2016, and it was unbelievable.

In terms of awesome mile redemptions, I spent 173,500 miles for a flight that costs $8,121.

My flight hacking experience began just two years ago when I took my first business class flight from Orlando to New York (it cost $50 to upgrade), and ever since then I dedicated myself to figuring out this “points” game so I could always fly first class with my wife.

To redeem this flight I transferred my Amex Membership Rewards points to SingaporeAir.com and redeemed the Suite Class cabin from SIN to JFK with a stop in FRA (Frankfurt).

My original flight booking was on Saver, and before the SingaporeAir devaluation.

There are of course tons of other great credit cards for free flights, among them are the Chase Sapphire Reserve (which had a 100,000 sign up bonus on launch) and the Citi Prestige that you could have also transferred your points to get this flight.

Below is my journey from SIN airport through their private lounge, private check-in area, and 3-course fine dining experience prior to our flight.

Singapore Suites Class Review SIN to JFK

You are greeted almost the moment that your feet hit pavement at the terminal and are led through check-in, passport control, and the like so you can immediately whisked off to the Private Room. It is here that the real luxury begins.

What is the Private Room?

Imagine for a moment that you are seated in a mansion in the middle of the Alps. Tall ceilings, expensive leather sofas, and all of the privacy that you could ever ask for are waiting for you the moment that you enter. Here, you are able to wait for your boarding time in peace. There are no pesky loudspeaker announcements, no running children, and no closely seated chairs that you must share with strangers.

I typically lounge around and read a book, or spend my time at the adjacent restaurant. In the restaurant, customers are invited to dine on some of the world’s most delicious delicacies — lobster, truffles, and champagne are the name of the game here.

Every single Singapore Suites flight members that you come into contact with is both charismatic and courteous. It is clear that they know how to treat their clients and it is their mission to make every single person, whether they’re millionaires or managed to snag a flight using their points, feel like royalty for a day.

When it does come time for you to start the boarding process, all you have to do is head down a set of stairs and through the boarding gate. This is only a sneak preview of the treatment that is to come.

What is the boarding process like?

Suites passengers are invited to board at any time that they’d like, so it is entirely up to you when you want to get settled into your room. When you do decide that it’s time, a crew member will meet you and walk you directly to your reserved suite, which is amazing. They like to call you by name, which adds a very nice personal touch that is often lacking in commercial airlines.

They also like to give you any and everything that you could possibly want before you even think to ask of it, almost as though they know you and your needs better than you do. The moment I sat down, I was offered an assortment of newspapers and magazines, as well as a drink. No waiting around for the flight attendant to come up and down the aisles with her cart? Count me in!

I ordered a glass of expensive champagne and it arrived in what felt like seconds, which is something of a theme when it comes to Singapore Suites. Everything that you need is right there, waiting for you to take advantage of it.

What are the suites themselves like?

If you can imagine a small hotel room inside of an airplane, Singapore Suites is just that. For couples traveling together, which my wife and I frequently do, Singapore offers the additional option of a double bed, which makes flying for long periods of time even better. For singles, the bed lies completely flat and stretches out the entire length of the suite. There is also a foot rest, USB spaces to charge your electronic devices, and even electrical outlets.

Fliers receive plenty of “treats” as well. The television comes with Bose noise canceling headphones, and the amenity kit by Salvatore Ferragamo comes with a face washing towel, hand cream, lip balm… Basically anything that you could possibly need. Additionally, complementary pajamas, socks, and eyeshades are provided so you can get a good night’s sleep while in the air.

There are 2 bathrooms reserved exclusively for Suites customers, and those bathrooms come with kits of their own that offer toothbrushes, toothpaste, shaving cream, etc. Basically, there is nothing that you will want or need while you are in their care.

My wife and I typically like to snuggle into our pajamas and then head over to the table to enjoy a nice meal before bed.

What is the meal service like?

Airplane food has a reputation for being about as desirable as hospital food… So not desirable at all. Much like Singapore Suites has changed the name of the game for flying, they’ve also changed the name of the game for food service.

If the Private Room’s restaurant was any indication, I knew upon boarding my first Suites flight that I was going to receive a truly exceptional meal and I wasn’t disappointed.

The menu itself is so expansive that it comes in at over 20 pages long. Every meal is meticulously created to look and taste absolutely delicious. You don’t just get one meal, either. Dinner is served in parts: appetizer, soup, entree, and dessert. Breakfast offers customers a variety of fresh juices, coffee, and tea, fruits, waffles, eggs, and just about every breakfast item that one could possibly imagine.

Whether eating dinner, breakfast, lunch, or brunch, customers in the Suites area are permitted to eat whenever they want. The crew members are eager to make your trip as enjoyable as possible, and there is no denying the fact that they do exactly that.

Is it worth the money?

If you are paying out of pocket, a Singapore Suites ticket from Singapore to New York will cost you around $8,000. For most of us, that isn’t a drop in the bucket by any means.

So being able to use 225,000 KrisFlyer miles is totally a great redemption. That’s $.035 points per mile.

But if you manage to get the opportunity to take a Suites flight, either thanks to points or because you received a discounted rate, then I highly recommend that you do so. It’s a once in a lifetime experience — probably not something that one would make a habit of doing unless they were ridiculously which, but something that should be experienced by all at one point or another regardless.

If you enjoyed this trip report, check out another amazing trip report to Europe to visit the most unbelievable hotel in Santorini where I also flew Singapore Suites Class!

This is a guest post by Andrew Wise from LifeTailored.com, you can follow his adventures @AndrewUFL.