MS versus Reselling: Which would you pick?

El Ingeniero

Level 2 Member
Protip - be very careful with Apple Watches. If the customer returns it, they often fail to remove it from their iTunes / iCloud profile, and often won't respond to your messages to do so. That leaves you with a watch you can't resell since it's locked to their account. I've had at least $2500 in such returns this year - which has been a helluva hit to my bottom line, as those are losses I simply can't recoup.
I sell a ton of shoes on AZ via FBA.

The upside is excellent ROI.

The biggest downside is high return rates. Every so often someone packs up a filthy old pair of sneakers as a return and keeps the nice new ones I sold them.

I have 100% success being reimbursed by Amazon when someone returns unsaleable goods.

When you do a removal order on an FBA item and it comes back in unsaleable condition, you file a claim in Seller Central, sending in pix of the removal order shipping label, removal order packing slip and pix of the item itself.

I don't sell Apple watches anymore, but I would suggest taking a photo of each box including the serial number alongside the FBA box label or FBM shipping label before sealing up the box. I was 100% reimbursed for a watch that didn't match the one I sent out, which I was then able to sell as 'Used - Like New' for 90% of the New price.
 

profitone

Level 2 Member
Personally- I feel like I'm getting the gooey eye by CSR's in some stages of MSing and I am a retired 20+ year corporate retail veteran so reselling is right up my alley... My job was on the line daily to recognize and exploit profit for billion dollar retailers.... so 3 years ago I took my talents to Miami and packed up my bags from the corporate environment and never looked back....Ok the Miami part a quote from Lebron but the rest is true...
 

ToothMiles

Level 2 Member
I'm mostly MS & I'm OK as long as the cost is less than 1.5%.
I used to sell on ebay and never ventured into Amazon due to restricted categories. Hopefully will plunge soon.
 

MickiSue

Level 2 Member
Supporter
Unless you plan to fulfill yourself, you can relax a bit. FBA isn't taking any new sellers until after Christmas.
 

MickiSue

Level 2 Member
Supporter
Unfortunately if you ARE new, or even if you have been authorized to sell previously, but never bothered to send in products, you will NOT be able to do so. No pretty much about it.

As usual, FBA announced, on the last date they were going to accept product from sellers with no hx of FBA.
 

jredmond02

New Member
If you want to scale in any way with FBA you need to be prepared to run a business or a side business at least where MS can be far more casual.
Reselling has many details and attention that require more work if you scale. Upside is in running it as a business.... I'm at 21% ROI for 2016 and have earned an insane amount of points in the process.
 

MickiSue

Level 2 Member
Supporter
I am a little higher on the ROI, but as I AM scaling up, any profits are being plowed back into products. It's good to know that, as selling through FBA has become more common, so have ways to make it possible to delegate pieces of the work. You can hire people to purchase products, track inventory and, if packing and shipping becomes too burdensome, to do that for you, too.

Of course, you need the scale to make the cost of those things worthwhile. But, pay attention to the appropriate data points, and scaling is not that hard.
 

MickiSue

Level 2 Member
Supporter
Well, Amazon is doing nothing if not trying to discourage more sellers and/or sellers expanding their product lines. NO newbies allowed to send in products for FBA till after the holidays. More and more specific sub categories (brands and/or specific products, sometimes even sizes of clothing items) are being gated after the fact.

I have, right now, to scurry to get approved to sell in a clothing category where I've already sold a multitude of items, with only one return--and returns are common, of course, in clothing.
 

heavenlyjane

Level 2 Member
For me MS is currently a lot less effort. I work full time and the thought of running to the post office everytime someone buys an item sounds like too much work. I am MSing ~$12K per month.
 

MickiSue

Level 2 Member
Supporter
OK, that part is not so much an issue. I use FBA and SmartPickup from UPS. Fill boxes with AMAP, label, schedule a pickup and my boxes are on the way to some AZ warehouse.
 

Membersince2013

New Member
I'm partial to MS because it's what I know, but reselling is intriguing. I'm going to start with whatever Apple releases this week and then go from there. I plan on focusing only on larger value items and only going for really excellent sales. We'll see if that's even worth the time when I've started trying, or if it's such a low volume that it isn't even worth pursuing.
Dont do that... don't focus on large value items. You'll get large value returns.
 

Membersince2013

New Member
Do you sell on Amazon or Ebay? On ebay, I have a no return policy unless the item is damaged/missing in shipment and then I use the ship insurance. So far, I continue to be able to sell even though I'm sure some are turned off by my policy. It hasn't prevented sales. Did you find that most of the buyers sending them back are from the U.S. or international? $2500 loss is horrible. Can you report those buyers because they didn't send the item back in proper condition?
Your no return policy comfort is only a figment of your imagination. Customers who purchase through PayPal are entitled to their money for 90 days after purchase. All they have to do is open a case against you on PayPal. Even eBay will let the customer return the item if they lie and say the item is "running hot" etc. Don't get fooled into believe you're safe. Been there, done that. There's more fraud on eBay than you can imagine.
 

El Ingeniero

Level 2 Member
6 of one, 1/2 dozen of the other.

I shipped $25K worth of Target, Kohl's, Best Buy and Walmart purchases to Amazon between Black Friday and 12/14 in 2016. In 2015, I MSed $10K/day for the last couple weeks of a WF card.

Can't tell the difference. They both feel like a job. It was a relief when both efforts were over.

Reselling pros:
  1. I made $30K after all costs on $180K sales in 2016 Amazon sales after all is said and done, working less than 500 hours
  2. Made well over 100K UR spread out just buying store gift cards
  3. Made minimum spend on a 1/2 dozen credit cards without ever really trying
  4. Over the long haul, probably the only stable way to get miles and points at a negative cost (putting $$$ in my pocket instead of essentially buying points)
  5. Businesses are good for a ton of tax deductions: home office, gas, mileage, cell phones, equipment, utilities, and so on.
  6. That lovely feeling from making $30 on a clearanced push up bra you bought for $5.50.
  7. Overall one can make a middle class living reselling
Reselling cons:
  1. My basement is a finely tuned warehouse operation instead of a living space
  2. more than $1000 in unsaleable merchandise sitting waiting for a garage sale
  3. I check Amazon seller central 2X per day for buyer messages
  4. I can't live without 5 software subscriptions costing $220/month
  5. Spent $3K on equipment dedicated to reselling
  6. Retail/online arbitrage is slowly getting strangled
  7. Scumbag fake sellers from China dropping prices so low it skews the buy box minimum price down
  8. Scumbag customers that return dirty/broken/used merchandise
  9. Scumbag department stores (looking at you, Kohl's!) that ship you broken stuff
MS Pros:
  1. Sometimes scales pretty nicely
  2. Doesn't take a lot of space
  3. Can be very time efficient if you have good habits
  4. That lovely feeling you get from screwing the system intended to screw you
MS cons:
  1. Time spent at Walmart ... need I say more?
  2. Always having to scout new gigs
  3. Hogs get slaughtered
  4. Have to be super organized if you are running 15 or 2o small gigs at any given time
  5. Risk of losing gift cards is low, but that represents a 100% loss on one or more gigs
  6. It would be very tough to make a full time living on MS these days
  7. Getting treated like a crook by minimum wage cashiers
 

MickiSue

Level 2 Member
Supporter
Pretty much agree with the above, El Ingeniero.

It's one reason that I'm looking into wholesale for FBA--I'd rather warehouse 90 each of the same 20 things, than 10 or so of 150 things in my basement, knowing that they sell steadily, and that the price stays relatively stable. And then just send in 10 each of them, as stock in the warehouses goes down.

I HATE retail arbitrage. OA is my preference, but I needed to learn when it's just not worth spending any more time at website X, because their stuff won't cashflow at the moment. On the upside, if you have enough sites that you routinely use, there is always something to cashflow, on one or a few.

Right now, I have a pile of boxes about 8 x 8 x 4 in my living room. They'll need to go by Monday. But that end result of 30% ROI feels much better than 1.25% cash back, as I'm sure you'd agree.
 

ct22025

New Member
MS would be my preference, for sure. Reason being that you can wind down MS easier than winding down reselling. If you get busy, which will undoubtedly happen in life, you can pause MS without a garage full of stuff.
 

mactrader

Level 2 Member
I'm interested in reselling but find the Amazon gates a bit daunting and unsure if I want to put in the amount of work for eBay at this stage. I really like how casual MS is (WM and ATMs are right near places I need to be for my kids sports many nights of the week) and I manage to clear about $100-125/month above GC fees with cashback sites. My goal is to use that to cover the few annual fees that I will have and then just flow the rest into my family budget.

Down the road though, I would be very keen to develop a good model for reselling that isn't as daunting as I see it right now. The logistics of packing and shipping are not the problem, but the constant challenge of sourcing product. Online is highly competitive and offline requires loads of time.
 

El Ingeniero

Level 2 Member
Pretty much agree with the above, El Ingeniero.

It's one reason that I'm looking into wholesale for FBA--I'd rather warehouse 90 each of the same 20 things, than 10 or so of 150 things in my basement, knowing that they sell steadily, and that the price stays relatively stable. And then just send in 10 each of them, as stock in the warehouses goes down.

I HATE retail arbitrage. OA is my preference, but I needed to learn when it's just not worth spending any more time at website X, because their stuff won't cashflow at the moment. On the upside, if you have enough sites that you routinely use, there is always something to cashflow, on one or a few.

Right now, I have a pile of boxes about 8 x 8 x 4 in my living room. They'll need to go by Monday. But that end result of 30% ROI feels much better than 1.25% cash back, as I'm sure you'd agree.
Looking into wholesale too. But the upside of retail/online arbitrage is the diversification you get from have from having hundreds of SKUs. I take a loss on about 20% of my items. I break even on 20% of my items. I make a small profit on 40%. But on 20% of my items I see an ROI of over 100%, which makes the whole thing worth it.

Consider how easy a single retail arbitrage deals can go south on you:

I found 120 Philips light bulbs in Home Depot for $2.90 each, selling at $11.50 or so in Home Improvement, ranked below 12K . CCC/Keepa makes it look like 100% ROI easy peasy, especially since people buy light bulbs in multiples. I list them and send them in to the ware house. No sales for a month. Finally I get an order for 24 of them. The order gets refunded. Another order for 12 goes out, and gets refunded. Someone gets an order for 5, not only do I get a refund but I get a bad review, which unfortunately I can't get removed. At this point I had no option but to pull them from the warehouse, and write them off.

Wholesale concentrates your inventory, which raises risk.

I'm interested in reselling but find the Amazon gates a bit daunting and unsure if I want to put in the amount of work for eBay at this stage. I really like how casual MS is (WM and ATMs are right near places I need to be for my kids sports many nights of the week) and I manage to clear about $100-125/month above GC fees with cashback sites. My goal is to use that to cover the few annual fees that I will have and then just flow the rest into my family budget.

Down the road though, I would be very keen to develop a good model for reselling that isn't as daunting as I see it right now. The logistics of packing and shipping are not the problem, but the constant challenge of sourcing product. Online is highly competitive and offline requires loads of time.
Most people doing well with online are using virtual assistants to sift through thousands of deals on Tactical Arbitrage. What makes it hard is an addon software call Storefront Stalker that will pull every one of the SKUs in your storefront into a CSV file which you can then run through Tactical Arbitrage which will go through 450 sites and find a competitive online deal if one exists.
 

MickiSue

Level 2 Member
Supporter
If you can find an area that you have good instincts about (mine seems to be sporty type clothes for women), and maintain your variety in that area, you can do well. One thing I DON'T do is send in more than about 10 or so of a SKU at a time--fewer if they're big, because big stuff has to go out one at a time, anyway.

The biggest issue for newbies, I think, is that they concentrate on big dollar returns, rather than, as El Ingeniero points out, watching for ROI. Buying $500 worth of items with an average cost to you of $5/each and a net ROI of 100% means that you get back a total of $1000 on your $500. You can spend that $500 on two electronic items, and if the price goes south quickly, which happens frequently, you can end up with $350 or less after selling them both, a loss of $150.

I intend to use wholesale not to concentrate on one or two items, but to be able to maximize profit on a select few things that I know will sell, over and over, because they are from a trustworthy manufacturer, and are perennially popular.

Also, and this part is huge, like the lightbulbs, they need to sell cheaply enough on Amazon that people will toss them into their shopping carts as an afterthought. I'm thinking anything with a BuyBox above $25 will not fit that bill.
 

El Ingeniero

Level 2 Member
If you can find an area that you have good instincts about (mine seems to be sporty type clothes for women), and maintain your variety in that area, you can do well. One thing I DON'T do is send in more than about 10 or so of a SKU at a time--fewer if they're big, because big stuff has to go out one at a time, anyway.
I don't send in more than a few of any given SKU because with Retail Arbitrage, it's hard to find a ton of stock. That being said there are items I regularly send in 20+ units of.

The other downside on high dollar items is the extra lumpy nature of your cash flow when someone returns a high dollar item.

I am OK with sending in only a few of every item, because I usually send in 20+ new SKUs with every shipment. That's diversification in action.

I am ungated for everything except sexual wellness products. I did HPC, Grocery and Beauty way back when Allen Brothers was still selling to the general public.


What sucks is when someone is low balling something you have $50 or $60 into a few units. Then it can sit. For a long time, unless you drop prices and move it. I would much rather take a loss after 3 months than eke out a small profit after 12 months, because I want to take my cash and reinvest it in something I can make a profit from. You will find that a lot of people focus on turning over inventory.
The biggest issue for newbies, I think, is that they concentrate on big dollar returns, rather than, as El Ingeniero points out, watching for ROI. Buying $500 worth of items with an average cost to you of $5/each and a net ROI of 100% means that you get back a total of $1000 on your $500. You can spend that $500 on two electronic items, and if the price goes south quickly, which happens frequently, you can end up with $350 or less after selling them both, a loss of $150.
I do a lot of shoes and clothing, because the margins are good there. It's a lot of work to prep these things so they can survive the warehouse and offer a nice presentation when the customer opens it.
I intend to use wholesale not to concentrate on one or two items, but to be able to maximize profit on a select few things that I know will sell, over and over, because they are from a trustworthy manufacturer, and are perennially popular.
Using wholesaling to leverage replenishables, bestsellers that you can easily obtain at a profit, is a great strategy. I know a couple of brothers in Michigan that did 1.8 million dollars in 2016, mostly in grocery items with a overall net profit of about 20%. They have a warehouse with a dock, and they get a ton of stuff at Walmart.
Also, and this part is huge, like the lightbulbs, they need to sell cheaply enough on Amazon that people will toss them into their shopping carts as an afterthought. I'm thinking anything with a BuyBox above $25 will not fit that bill.
I tend to look at profit generated per hour of work. For prep intensive stuff, I can process maybe 20 items an hour for shipping to FBA when all is said and done (note that there is no freaking way I could process 20 eBay orders in that time frame). The only way I would send in something that I expect less than $5 profit on, is if I can literally just slap my label on it and chuck it in a box. And I am really looking for $10 of profit or more.

For 2016 my average item sold for $39.28. Would have been higher but I sent in a bunch of Q4 stuff to sell at $20 or so. A $20 item, I would want to pay no more than $8 for, and preferably under $7. That's just me, and that could change based on category and weight/size considerations.
 

MickiSue

Level 2 Member
Supporter
I tend to look at profit generated per hour of work. For prep intensive stuff, I can process maybe 20 items an hour for shipping to FBA when all is said and done (note that there is no freaking way I could process 20 eBay orders in that time frame). The only way I would send in something that I expect less than $5 profit on, is if I can literally just slap my label on it and chuck it in a box. And I am really looking for $10 of profit or more.

For 2016 my average item sold for $39.28. Would have been higher but I sent in a bunch of Q4 stuff to sell at $20 or so. A $20 item, I would want to pay no more than $8 for, and preferably under $7. That's just me, and that could change based on category and weight/size considerations.
I can, inconsistently, get small numbers of items that sell for around $20, and pay $5 for them. If I can skip the middle person, and get them for what they pay, probably $2 or $3, so much the better. Also, being able to buy in large lots when I know that they WILL sell? Priceless.
 

El Ingeniero

Level 2 Member
I can, inconsistently, get small numbers of items that sell for around $20, and pay $5 for them. If I can skip the middle person, and get them for what they pay, probably $2 or $3, so much the better. Also, being able to buy in large lots when I know that they WILL sell? Priceless.
If something is being clearanced or offered as a loss leader at $5, I doubt it costs the source $2 or $3.

But I will take a 35% ROI on something that sells 1000 units a month for $20 all day long.
 

MickiSue

Level 2 Member
Supporter
LOL, me, too, El Ingeniero. But my guess is that there is a sliding scale of discount for wholesale, and that buying 1000 units won't get you the same discount as buying 10K.
 

El Ingeniero

Level 2 Member
LOL, me, too, El Ingeniero. But my guess is that there is a sliding scale of discount for wholesale, and that buying 1000 units won't get you the same discount as buying 10K.
Totally depends on the source. IMO the best thing is to deal with the manufacturer if you can. And sometimes, you can make an agreement to buy X units per month and get a lower price.
 

AnyNameYouWish

Level 2 Member
Your no return policy comfort is only a figment of your imagination. Customers who purchase through PayPal are entitled to their money for 90 days after purchase. All they have to do is open a case against you on PayPal. Even eBay will let the customer return the item if they lie and say the item is "running hot" etc. Don't get fooled into believe you're safe. Been there, done that. There's more fraud on eBay than you can imagine.
I've been selling on ebay for 18 years and have always had a no returns, return policy. Lots of people are misinformed about what that means and the fear about it spreads rampant through the community forums. No returns is a valid, acceptable returns policy per ebay. It certainly helps to be an established seller with high # and % feedback. I can't imagine starting out from scratch now.

Obviously no returns doesn't apply to SNAD or items damaged or missing in transit. I also don't sell internationally because the amount of fraud drops significantly when you don't. I do understand that I make much less in sales than people who sell internationally but for me, ebay is still fun, and that's worth more to me than a few bucks.

I have successfully argued several cases where buyers tried to lie to force a return. Never lost one. Ebay has always refunded the buyers but has never taken the money back from me, nor has my account been dinged for it. I have read countless situations where ebay has been very unfair and nasty to sellers but all my dealings with them so far have been surprisingly reasonable. Perhaps my time just hasn't come yet.

I have made exceptions for customers who have asked nicely or who have caught me on a good day. Those happen maybe once or twice a year. Nobody who has demanded I must accept a return has gotten one. The problem buyers usually also happen only once or twice a year. Overall I can't complain much. Of course that can change at any time, but so far, still chugging along just fine.

My #1 piece of advise is to call ebay immediately if you think any buyer is trying to find a way around an ebay policy. Trying to find a way around your returns policy IS a violation of ebay policy, even if your returns policy is a no returns policy. SNAD and damage not included.
 

seespotjump

Level 2 Member
Me personally, I've been reselling on eBay for a long time now (way before I started churning). The feeling of getting a jacket or something during an off season sale and then selling it for a profit is a great feeling.

That being said, MS is way easier for me with a full time job right now. I still buy things to resell on eBay occasionally, but I am mainly focusing on MS now.
 

CreditDratini

Level 2 Member
I just don't have the time to get into reselling. Between work and school, I already to work to squeeze any MS errands into the daily schedule. Can't imagine having to list, track, and ship stuff from eBay or Amazon or whatever. The time just gets too overwhelming...I can get better returns by focusing on my investments more lol
 

Zef

New Member
I've been MSing for 2-3 years... and have been researching reselling for more than a year...

Finally took my first shot at reselling last month when RTIC coolers were at a discount and sold them on CL for 100% profit. Of course, this rarely happens.

With my past experience (MS) and research in reselling, I have stuck with MS since there's a big risk in reselling unless you are sure items will get sold quick with a profit.

Reselling sounds very appealing where you can make a profit and get CC points out of it as well. I would probably dive deeper if I came across deals which are a sure shot.
 

El Ingeniero

Level 2 Member
I've been MSing for 2-3 years... and have been researching reselling for more than a year...

Finally took my first shot at reselling last month when RTIC coolers were at a discount and sold them on CL for 100% profit. Of course, this rarely happens.

With my past experience (MS) and research in reselling, I have stuck with MS since there's a big risk in reselling unless you are sure items will get sold quick with a profit.

Reselling sounds very appealing where you can make a profit and get CC points out of it as well. I would probably dive deeper if I came across deals which are a sure shot.
I would say the main differences between reselling and MS are:
  1. Liquidation avenues aren't an absolute limiting factor for MS, time is
  2. Reselling generates significant taxable income
  3. You will spend more time reselling than doing MS for a given amount of spend
  4. Reselling will be more profitable than MS on both absolute value and relative to time spent
 

El Ingeniero

Level 2 Member
I'm mostly MS & I'm OK as long as the cost is less than 1.5%.
I used to sell on ebay and never ventured into Amazon due to restricted categories. Hopefully will plunge soon.
Only categories where ungating isn't trivial are Luxury Beauty, Beauty and Grocery. For the latter 2, you will need 3 invoices from Amazon recognized wholesalers, or a wholesale invoice and a sales tax id for the state you live in. For Luxury Beauty, you ungate brand by brand.

OTOH, there are quite a few brands where new sellers need ungating and previous sellers are grandfathered in, and probably more every day. If it's not a brand that only Amazon can sell, you will need 3 wholesale invoices; should you be accepted, yo will need to pay a nonrefundable fee of $500 to $3000 before you can start selling that brand.

If I had known things would pan out this way, I would have consciously sold a few items from as many different brands as I could in my early days. It just kills me that I can't sell Hasbro, Mattel, Playtex and Always stuff, which are perennial reseller fodder.
 

Matt

Administrator
Staff member
If I had known things would pan out this way, I would have consciously sold a few items from as many different brands as I could in my early days. It just kills me that I can't sell Hasbro, Mattel, Playtex and Always stuff, which are perennial reseller fodder.
I had the suspicion that this was happening which is why I did push through as many brands as possible, some even at a (small) loss. I don't do a whole lot of reselling any more (and zero MS) but when I do, I'm able to get into some great brands like Nike and Lego which others have to pay for.
 
Top