A Reflection on Reselling and Thoughts for 2016

Last year, I shared a spreadsheet that I used to track my purchases and sales, well, this year, as I reflect on 2015, and my moving targets for reselling in 2016, I am moving toward a different system, Inventory Lab (note, this is an affiliate link), I’ll write more about it in the coming weeks, if you want a sneak peak, check out Oren’s review. I thought I’d share the path I’ve taken to getting here, in hope that it will help some who have considered reselling, or have started reselling recently.

Starting Out – 2012

A long time ago, in a galaxy far, far away….. Oh wait. A few years ago, in a time I can’t fully remember, I read a post from Greg the Frequent Miler about double dipping through the Ultimate Rewards Mall, to earn 20x or more Ultimate Rewards Points via Kohls. That was what started me out, although it took a few months to truly test things out. However, Kohl’s was such a centerpiece of my initial reselling strategy, that it became a centerpiece of any of my future presentations, because it was such a great story.

Kohls Great Example

I kept going though. I expanded to Lowe’s when Chase Freedom offered the quarterly bonus there, and I happened to find some products that were profitable on their own — they were Porter Cable, and I even drove out of my way, after a business trip to Ghana, just to pick up even more units. Back then, I was primarily focused on the points, and the pure profit was well, pure gravy.

2013-2014 Much of the Same

I started out with such small numbers in 2012, that they barely mattered. 2013 started to matter, but really only generated me a few hundred thousand points. 2014 I did even better, primarily because of Matt’s Mile Madness competition, where I had still blogged under Quick City Visits. I pushed myself that year, and nearly tripled what I had done in 2013. I was still very focused on Kohl’s and Lowe’s, but, at Matt’s CharlotteDO, I had the chance to meet someone that helped change my course in reselling. He shared some tips, I shared some tips, and we’ve kept in very regular contact ever since. In fact, he was part of the reason I did ResellingDO earlier this year, and am working to host another in 2016. Needless to say, I expanded my sourcing even further, thanks to him and BigHabitat in 2014. Incidentally, starting Tagging Miles in 2014 with Joe helped me to meet others, I’ll get to the importance of that in a moment.

2015 – A Transitory Year

I was starting to see more money coming in than I had expected when my wife and I had started the venture. The points were the real goal up until this point, but, wow, extra money to offset manufactured spending expenses helps. That’s how I was looking at the profit at the start of the year. I was also starting into some really fun stuff, we’re talking quick sellers, 15-20% profit, and sold faster than I could buy more. January, February, March, these were months were I was starting to see much more potential in what started as a mileage earning hobby.

I went into a low point in late March through July. I had been more focused on traveling. I do that. I like to travel. After all, that’s why I started this whole thing. That’s why I tried to accumulate so many miles, and if you can’t enjoy the fruits of your labors, then, why bother, right? Well, that all changed in July. Hosting ResellingDO ended up being a great opportunity, even greater than I had initially expected. I met lots of great people, folks who helped me want to do more.

A bit asynchronous, but, I remember a conversation I had with Greg the Frequent Miler at the end of April. He noted my interest in reselling, and asked how it was going. I think my response was something to the effect, that reselling can generate a couple to a few hundred thousand miles and points, but still paled in comparison to credit card churning. Of course, this was before most of the negative news hit, like Chase’s new rules.

Cut back to July. Now I wasn’t necessarily looking for miles and points from reselling, yeah, they were great, but now, with this new found confidence and optimism, I was focused on the bigger prize. Around the same time, I had posed the question: How do Miles and Points influence your financial planning strategy? In it, I highlighted:

You should block and tackle your debit, reduce expenses where you can get Big Wins, and then focus on increasing your income, thereby reducing the previous two to a lesser percentage.

Why? Because you can only save so much, but you can always earn more. Reselling for me, has been that path to earning more. It was no longer about reducing my travel expenses, it was the pursuit of Big Wins, and increasing my income. When you find a product that sells fast and nets you 50-100% Return on Investment (ROI), I consider that a Big Win, its the sort’ve thing that you can look at and just smile, then try to get more of, before the next big thing.

Another integral part though, as I alluded to earlier, is that you have to build a network. John Donne said, “No Man is an Island”, and nor should you, man or woman, when you pursue reselling. I’ve been fortunate to have met many really smart people, and keep in contact with them on a regular basis. This is truly one of those gigs where, when you can build a small group of folks you can trust, a rising tide floats all boats. So I would implore you, network, make friends, and help each other.

2016 – A New Year, New Goals

Toward the end of 2015, it started to become apparent: If I bought enough product–that could be sold at a profit–then the points and miles would just be there. Of course, when I did that, I had a front room (aka warehouse) that looked like this:

boxes in front room

Things were only a little out of hand, I could still see the floor after all.

As I look forward to 2016, my reselling strategy will be shifting. I’ll still jump on most every deal I reasonably can from stores such as Best Buy, Staples, and the other popular ones everybody mentions. But I need to get smarter. I still work a full time job, which I do not plan on giving up anytime soon. I also really like to travel, and that isn’t changing anytime soon. So I need to figure out how I can get smarter.

Wrapping Up

My point is not to highlight my successes, but to highlight that it takes time, and is often an evolution of thought, a moving of the goal posts if you will. I would offer: Identify what your goals are when you get into reselling. Consider what you really want to get out of it. Is it miles and points, leveraging shopping portals? Is it profit? Is it a mix of the two? Figure out that, then start identifying what you need to make those goals. Definitely feel free to check out my Beginner’s Guide to Fulfillment by Amazon (and following posts), but realize, the answer might be dabbling in Retail Arbitrage, or focusing on Online Arbitrage, a mix of the two, or a third option. But remember, Rome wasn’t built in a day.

57 thoughts on “A Reflection on Reselling and Thoughts for 2016

  1. Good to see you are seeing the potential in reselling for profits instead of break even for points. Lots of money to made on AZ, but inexperienced sellers tanking prices for quick break even sales few a few miles really hurts the market.

    • @JS – yeah, there’s a balance though, usually the folks that are just in it to break even will clear out inventory quickly (at least that should be their goal). Still, there is a lot of risk for the break even reseller, which I think helps keep them to particular areas (like iPads).

      • Yes, most b/e sellers will sell out quickly. But you mix the b/e seller, with the new inexperienced seller that panics and the auto repricers and you can get a quick race to the bottom that may take weeks or months for items price to recover. Plus you got deals posted on some blogs that are advocating using AZ FBA for MF at little to no profit and then you got people buying the same deals published on the blog so typically those price tanks.

        Ever check out any of those sears free for point items posted by BH? Items selling for $70 when posted drop to $30 w/in two weeks.

  2. Ok, I have a couple questions:

    I am guessing you use FBA, but are there other avenues for selling that you are using? If so, what are your favorites? Do you use eBay? I’ve sold there off and on for over 15 years but I tend to target when they have listing promotions and even then the fees are tough, but I get a lot of exposure.

    What do you do about deliveries and shipping? Do you have UPS Pick up or do you take it to a place?

    I’d like to know more details about HOW you manage all this (Not your sourcing, that is your secret) but the gears and levers and all would be vastly interesting.

    Thanks in advance for any info or tips you, or other commenters can supply.

    • For AZ FBA, you need to download the AZ Seller App and that will give you rank and proifts of all items. Go to store, scan and find profit for good ranking items (if you are already a seller, you probably already know that)

      For shipping items, UPS offers (or at least use to) free SmartPickups for one year. Then you just let them know when you got items to ship out and they pick them up your house.

      Other option is if you are doing mostly OA (buying items online to sell) to send items to a prep center. Saves a LOT of time and typically can save you money if you live in a state that collects tax and you can find a prep center that is in a tax free state (NH, MT, OR to name a few). Also helps you scale as it frees your time up for buying/sourcing instead of spending so much time packing.

      Inventory Labs (which Trevors referenced) is a great source and plenty of good repricers (not sure if Travor has affiliate link for them) that can save you significant time and make your more money when you get enough skus that manual repricing no longer makes sense.

      Those are a few tools I can think of, hope it helps. Trevor likely can add much more.

      • I’d echo JS’ comments, but I’m still weary of re-pricers. It could be because I’ve only been burned once or twice on prices going up. It could also be a bit of my desire to be more in control. I have experimented with Feedback Genius (http://www.sellerlabs.com/feedback-genius) since feedback is also important. I’ll talk more about some other tools in a post when I get the chance to finish testing these out to their full potential.

        • With repricers the rules you set are very important. If not done right, they will start the race to the bottom. I love when I find a competitor using a repricer not setup with a floor and I’ll drive their price down as low as they can and buy up their whole inventory.

          But setup correctly they will increase the velocity of your sales and increase margins when the price adjusts up when other competitors sell out.

          Of course depends on how many skus you have if its worth it. Manually repricing certainly has its advantages.

          • Stealing? How did you get to that conclusion? If someone comes in and undercuts my price by 5% preventing me from getting the Buy Box and thus preventing me from getting sales I’m going to try to match their price to get a share of the buy box. However, if they have configured their repricing software to continue to undercut me preventing me to make a sale and on top of that they were stupid enough not to setup a floor I’m going to buy them out so I can make a profit again.

  3. Thank you for the picture!! I showed it to my mom so she could see that I’m not the only one who does this to their “non-living room” 🙂 Mine is more disorganized than yours, with far fewer but much larger boxes. My Christmas visitors also laughed at how the only friends I’ve made since moving to FL 18 months ago are the UPS and FedEx guys 🙁

    • @MMKate – Glad to commiserate! The boxes that ultimately left the house were bigger. I try to consolidate, its just that some of the things I buy (like everyone) come in smaller boxes… needless to say, my garbage men really were enjoying what I put out for the pre-Christmas pick-up!

  4. Thanks for the post. I’m curious to know more about the prep center to which you refer. How do I find them? I live in WA state with high sales tax.

    • Google FBA Prep Centers and do research. Here are a few I know of, but suggest doing your own research:
      NH: Prime Zero Prep
      MT: Sell Tec Prep
      OR: FBA Prep and Ship

      Keep in mind these are NOT drop off locations, but places you have your purchases sent to and they prep your products for shipment to AZ for FBA. Some places like Kohls and Target that don’t like resellers likely won’t let you send stuff there. I pack all my own Kohls and Target stuff to avoid issues.

      Also you should get your resales certification so that you can make tax free buys. However, not all stores accept them (e.g., stores mentioned above that don’t like resellers) and I prefer to try to remain as anonymous as I can when making large amount of purchases

  5. I like the color of your walls.
    I’m thinking I need to rent a storage unit or something because my front rooms look like that as well. Not sure I’m ready for prep services yet but I will be soon. I’m having trouble buying fast enough to keep up with sales at this point.
    My sales figures really reflect my travel. July September and October were low sales months because I was traveling most of those three months. In 2024 I was home 8 days between September 8th and January 11th, and this year might be another like that. I still need a plan for dealing with that.

    • @BackFancy – I totally agree with being able to keep up with sales. I don’t see myself ready for a storage unit, primarily because my goal is to turn things around in under 48 hours (unless its the weekend). As far as the prep center, that’s something I’m seriously considering for when I’m traveling. The challenge is figuring out what the right amount of throughput is to make it worthwhile, and not all are created equal. That’s definitely on my list to figure out for this year.

    • @Logan, so my opinion in general is – its got to be a great return, or I have to be able to still make money if I undercut Amazon a bit, because they will usually match prices, unless they can’t. But if you want a more specific opinion, you’re welcome to e-mail me at trevor(at)taggingmiles(dot)com

    • Amazon is actually a great place to source from. I’ve bought tons of stuff from Amazon and then resold it via Amazon. The important thing is to look at the charts and history of the product. Is AZ frequently out of stock? Is AZ deeply discounting something that likely will shoot back up in price soon? Is price so out of wack that it might be a price mistake?

      For items, not buying at AZ, while I typically like to avoid competition with them, it is important to check out the charts to get a read of what luck you might have in competing against AZ.

      • @JS I had thought Amazon would frown on buying and then reselling… But you’ve been doing it and don’t see any negative ramifications? That opens my aperture, as I’ve seen plenty of things that could make sense, when AZ goes out of stock!

        • @Trevor The key with Amazon Flips (Buying from AZ with intent to sell) is you can NOT use PRIME to buy and then resell. What I’ve done, and my understand is this is in compliance with AZ T&Cs, is setup a separate non prime buying account. You can have multiple prime accounts, but only one seller account (unless approved for valid reason to have more). Then you setup your buyer account to be a business account and you can make tax free purchases and can still get free 2 day shipping with purchases over $50.

        • @Logan. I’m not sure what flash deals are and I think gold box deals might be prime only or not allowed to be resold on AZ.

          Here is an example of something I flipped:
          AZ Price: $29.97
          Sale Price: $94.99

          Looking at history, I knew last xmas this sold out since every little boy wants paw patrol and this is a hot toy (typically ranked under 2k in toys). Was able to pick this up in November for $29.97 and then sold it for more then x3 its cost a month later.

          • So is it typically a waiting game? You just wait for Amazon to sell out of a specific margin and then you get your return, if not, you break even?

  6. I look at charts and look for one of the following:
    1. Item AZ frequently goes out of stock of. Then I look at the sale price history (only can see lowest MF price, but will give you an idea) of when it goes out of stock to see if I think its an item that works. Also if they don’t have limits, I can buy them out of stock. Now there is no guarantee that I’ll get my items back in b4 they get into stock, but again I’m looking at charts for fast moving products that AZ can’t keep in stock. Another example of this is the Pie Face game. AZ sold them for $14 and then it could be flipped for close to $40 most of December b/c AZ was selling thousands and thousands a day and couldn’t meet demand.

    2. I look for dramatic decrease from their standard price. I once bought a phone system that they sold for years at $199 and one day they dropped down to $50. Price drop was only a couple of hours and never saw it happen again. I bought the 4 limit at $50 and sold them all for $150+ while competing with AZ.

    I never try to break even. I average 100% ROI on my buys both from AZ and other stores. AZ flips are a little more advanced, but a great way to increase your returns (and Miles!). And yes, it can be a waiting game. One of the key things with reselling is being patient. It’s not always about getting the quick sale, but sometimes you buy some stuff that have a slower turn around. In general I’m looking for fast turn stuff like everyone, but if I need to wait a month to make $50 a unit, I can handle that.

      • Thanks JS. I understand the logic behind the resell and 100% ROI is Amazing. The hard part for me is finding those deals. I have a list of websites I check regularly for deals and I can’t come anywhere near 100% ROI. If I’m lucky, I’ll make 20% but sadly I’ve been averaging 10%. Are you going into physical stores to find your deals or other methods? I’m getting into coupon stacking and utilizing discounted gift cards to deepen margins but the work never justified the return in most cases.

        • I do 99% OA (buying online). When I started I was more 50/50, but got FT job and two little ones and just don’t have time to scan stores right now. I’m targeting to go full time in a year or so and then I’ll get back to the stores. For now, I buy online. Key is stacking coupons, gift cards, store rewards, portal cash back and credit card points/miles when possible.

          Here is a good example, starting next Thursday Kohls will have a coupon code for kohls cc users for 30% off and $10 off baby/toddler clothes. Then they give you 25% kohls cash back and you can usually get 6-10% from CB portal. So ultimately, u can get close to 50% off and then get another 30-35% back in cash back/ kohls cash. Hard not to find something that is a 100% ROI.

          • Makes sense. I’ve never considered cash-back portals, store rewards, and CC cash back or miles as part of my ROI. I’ve always considered it as “gravy” to the deal because you can’t put a physical dollar value the miles, store rewards in some cases aren’t near as powerful as cash and really aren’t worth anything until you redeem them, and portals may claw back or improperly track your purchases.

            Don’t get me wrong, I use all of these methods, I just calculate my ROI using my pure cash profit. Also, thanks for the example. I need to start looking at Kohl’s. I’ve heard it’s a haven for stacking such deals.

          • I actually track ROI/PM in 3 ways. Pure ROI w/out any other perks back. Another one with CB (from portals & CC) and another one with CB & Store Points. This helps me make a decision on buys. I do this for profit, not miles so I’m using credit cards that give me the most CB. If I’m using a miles card to meet min. spend then I would just not point any value in for using that card.

            I agree with your assessment on store points. However, i have never had an issue turning store points into at least the dollar value they are so I like to include it in my pre buy assessment. In the buy which I earned the store points I’ll earn a much lower ROI and then the purchase in which I used store points to buy stuff I’ll have a much higher ROI. Then they typically average out to around 100% ROI.

            At the end of the day, my true ROI/PM numbers are based on amount of cash I actually earned from sales and CB portals/CCs, not based on what I was supposed to earn. Guess there is always a chance of clawbacks, but luckily I haven’t had that happen yet.

          • @JS Can I get your email so I can bounce a few items I want to resell off of you to see what you think? The item is odd because Amazon has this item in stock for let’s say $10. The buy box is currently a 3rd party new for $20. It doesn’t make sense that the buy box would be twice as much as what Amazon is currently selling at. Also it’s odd that Amazon wouldn’t give itself the buy box.

          • I just realized you’d have to publicly post your email. I don’t have any problem posting mine. You can contact me at lolatlogan@gmail.com.

            If you have any pointers on that situation, I would greatly appreciate it!

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  8. Thanks for this, Trevor.

    I told Husband today that I’m planning to attend the reselling DO, and he’s all for it–because I’m starting to show real profit. But I’m just starting…and want to grow exponentially this year.

    @Logan: you won’t limit yourself to 10% profit if you don’t buy items that get you there. Be sure of three things, before you whip out the credit card or type in the numbers. One: are you permitted to sell it new, or if it’s refurbed, are you allowed to sell it refurbed? Two: what does the seller app show as net to you from AZ, based on current price on AZ, and is that a MINIMUM of 50% more than the item will cost you to buy? And Three: what is its sales rank? If it’s an unusual item, then a low sales rank is OK–there will be a few people looking for your item, always, and it will probably sell. But if it’s one of 987 different types of tablets, and its rank is 966, don’t bother.

    One of the reasons I’ve been showing excellent profit the past two or three months is that I’ve been following my own rules above. Before, I didn’t, and I got burned more than once. But I will walk away from more items than I buy, even if Number Two looks good. Unless One and Three are both yeses, it’s not worth the time the items will hang out in inventory.

      • @Mickiesue

        > One: are you permitted to sell it new, or if it’s refurbed, are you allowed to sell it refurbed?

        I almost always sell new and before even jumping on something I make sure Amazon will allow me to resell. I’ve heard stories of people buying Macbooks on Ebay (in new condition) and Amazon not allowing them to sell as new, which really hurts your margin,

        > Two: what does the seller app show as net to you from AZ, based on current price on AZ, and is that a MINIMUM of 50% more than the item will cost you to buy?

        Can you explain this a little better? Does that mean you only jump on items that leave you a 50% margin? I can’t seem to find deals like this consistently so I settle for a margin of 15-25%.

        > And Three: what is its sales rank? If it’s an unusual item, then a low sales rank is OK–there will be a few people looking for your item, always, and it will probably sell. But if it’s one of 987 different types of tablets, and its rank is 966, don’t bother.

        I always check CCC for the history of the sales rank. I also use the 1%/5%/10% rule. If the item is in the top 1% of it’s category, there is little to no risk. 5% mild risk. 10% be willing to sit on this item for a while.

        I’d love to bounce ideas as I am still learning to find deals efficiently!

        • @Logan: if net profit is at 15%, what happens when the price drops 29% between your buying it, and it showing up as in stock at AZ?

          It’s easy to be too eager to just have inventory. But I, myself, have had enough of breaking even because I had to sell some things at a loss.

          I’d rather net $500 on inventory I paid $1500 for, than $500 on inventory I paid $5000 for. Wouldn’t you?

          Next step is to get a TID. Staples will then love me, as I buy 10 iPads at a time!

  9. Logan – I sold a macbook before and made a nice profit from a black friday sale as like new. Just depends on the time of year/retailer I suppose.

    Where are you sourcing from to only get those ROI numbers? You can find stuff that gets great ROI at low costs > $20, just have to buy all the stock. Granted it’s not big money but depends on your goals with this.

    • Craig – I’ve had good fortune selling macbooks as well, these are just things I’ve head.

      I’m also getting fairly slim margin, probably because I’m selling high dollar items. I guess I’ve been overlooking low dollar items because I’m scared that the price is more volatile than a large ticket item, thus the chance of getting a decent return is lower. I guess my logic is wrong? I guess it only makes sense to buy low ticket items if you are buying a few dozen of them, correct?

  10. Logan – I’d say it’s gotta be a personal decision and align with your goals. Are you worried about getting quick sells? High ROI no matter the cost? Comfortable going to a store and cleaning off a shelf?
    It depends on the effort for the potential profit and if it’s worth your time.

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      • Yes, the boxes. I’ve found some retailers will send cases, but for places like Kohl’s I get everything in bags and all contents are always smashed to hell and I have to return everything. Kohl’s has some great deals, but receiving a dozen orders in a row with every item needing to be returned isn’t worth the time. And I’m banned form TRU.com for ordering too much stuff. Go figure, a business that doesn’t want to sell stuff.

        • @Ken – yeah, it varies… Best Buy will send stuff in bags, which frustrates the heck out of me… I usually respond to damaged product as: “This was a gift, I can’t give a smashed up box as a gift.” — its amazing that they don’t understand this.

          • Yup, Best Buy used to send my stuff in boxes, then they switched to only bags and everything would get smashed. Imagine how much money these companies are throwing away when they think they’re saving a buck by shipping things in bags. The only thing that should be shipped in bags is clothing. Everything else should be boxed. Back when TRU let me order from them They would ship items like crap. Giant boxes with items just tossed in and no packing pillows. Most of the big box places contract out their fulfillment to giant warehouses that don’t seem to give a crap how things go out the door. I’ve gotten items without tape on them too. And also this year almost all retailers have shorted me left and right. I’m getting to the point where I no longer want to deal with reselling since it’s turning into such a PITA between FBA customers returning everything (even items I don’t sell), FBA workers losing entire boxes of items and then having to fight them for reimbursement, whiney customers complaining about price gouging, AZ’s fees constantly going up and up with no end in sight. Local stores like Target refuse to sell to resellers so they won’t sell anything in qty so it takes forever to source inventory. I need to find new stuff to sell. /rant

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