As I keep my finger on the pulse of the game, and MS in particular (by reading TBB) I’ve heard of this thing called ‘Reselling’. Apparently it is the future of MS. So much so that several people I know have quit their jobs to resell full time. There must be a lot of points to be made in this gig!
Reselling is an interesting beast. People approach it in different ways, some might say good ways, and ‘other’ ways, but I’ve never been one to judge. The ‘stupid’ way (for want of a better word). Is to do things like:
- Not declare profit (or loss) from reselling.
- Not seek profit, undercutting the market rate in order to earn more points, rather than earn real money.
But however you go about reselling, I’ve got to wonder about the ‘why’ it is so attractive. I think that there are related two things that are at play, one is that it is pretty easy to get into because the ecosystem is built already. The FBA environment provides the infrastructure, making the sales process a breeze, but that also creates issues. It caters to the entitled, small minded player.
This character is the biggest challenge when it comes to the game. And a reason why I stopped posting about specific deals on the blog, there’s a crowd of hungry points addicts who want feeding. They don’t care about causing harm to an ecosystem, burning a store, or a customer, providing they hit their own goals of earning points.
I can see Reselling having a strong appeal to such characters as it has all the components of a gig that appeals to them:
- Can be spoonfed.
- Has a money in/money out process that they ‘deserve’.
- Can be sustained (by new deals being fed to them).
With the wrong person in the mix, they might read a blog that talks about a deal on a laptop from Bestbuy, and go to that store with no purpose other than to buy exactly what they want, and earn exactly what they want. They might argue with the manager, call HQ, chargeback credit cards, and generally be dicks. Just one of these people burns a store.
Reselling appeals to people with this mindset.
How can you protect yourself against this? Firstly, you need diversified channels of acquisition, and secondly, you need to have a plan B for inventory. What’s to say that enough bad people flow into reselling and start shipping inferior/refurbed goods and FBA just decides it isn’t worth it to the brand to work with resellers any longer? What happens in that situation? You could certainly return the products you bought, but you’re also back to square one in terms of your MS game.
Think about real business
Getting into the same business as everyone else in this game brings with it huge risks. It’s not smart to rely on a sole channel of distribution, and with every new post on reselling you get one more competitor for products. People don’t realize it, but they have developed skills along the way, and it is a pivot with those skills that offer the solution for weathering the storm of too many competitors (in MS, in reselling, for seat assignments, etc) but only a few will take the next step with their skills.
Another Example: Dialing for Dollars
The people who call up credit card companies and go through thousands of $500 gift cards to make payments. The gig is ending, it is being driven into the ground based on horizontal and vertical volume (number of players, and the amount they are playing with). When it dies, many people who spent hours on the phone calling in to liquidate/earn $20 will never use the phone again, but surely they have developed a comfort and skill with the phone, can’t they take on another job to make money? A person in pursuit of miles and points will drive around and wait in line at customer service, why draw the line there?
MS, Reselling, whatever, is a Job
A job, or a business, whatever you call it, if you are giving up time to earn cash or points, it is a job. Everyone has learned new things and gained new skills in the process, but few will take them into new ventures.
It’s not about the points
Or even the cash. Money/wealth/points are there to help you achieve life goals. Points and Miles are attractive due to their inherent leverage over cash for certain case specific activities, but they can be replaced by cash. Who cares if you can’t MS 5000 SPG points a month when you can now earn $10,000 a month?
The end is nigh
Reselling is not the answer, because it appeals to the lazy and the entitled. If your business is reselling you have to accept that every day your ‘go to’ store could be burned by someone who doesn’t share your long term, relationship nurturing business model. And one day, FBA might just devalue, or shut you down altogether. Reselling appeals to too many people, the barrier to entry is low, and they aren’t your buddies. It might be a good idea to make hay while the sun shines, but if you really want to build something sustainable, and create a life where you get to do the things you want to, it’s time to evolve.
It does seem like we’ll see the end of MS in 2016. It sounds like some folks literally make a living with the hobby. It will force those who’ve pigeonholed their “skillset” for the last couple of years to evolve. I wish them the best of luck in learning how to actually contribute to society.
Lots of jobs/people don’t contribute to society, and those that do don’t always contribute in a positive manner!
Guy above you comes off as angry and condescending to someone that doesnt fit his definition of “contributing to society”. Nothing really shocks me anymore but…
I agree with you, Matt. I am sad to say that, because I am a reseller.
OTOH, I don’t have “a” go to store. Even when I had just begun, I diversified. I keep my stores close to the chest, because, even though some of them may be widely used, others are not. And I’m happy as a clam to keep them that way.
As for the issues with FBA. Yes, there is entitlement in some who use it. But I can’t think of any method of earning miles and points, especially where actual cash is concerned, that doesn’t have its Eddie Entitleds .
Here’s the saving grace, to my mind, of reselling. It’s work. Not like MS, where most of the work is relatively mindless–drive here, drive there, stand in line, rinse, repeat. But actual, physical labor (those cartons get heavy!) and actual use of the brain, unless you are a fan of negative audits by the feds or your state. Record keeping is crucial. Not to keep track of your miles and points. But to maintain your tax records.
The amount of actual work involved, even when making use of FBA, leads many to dip their toes into the reselling pond, and quickly yank them out.
This year, I think, will see a huge uptick in Amazon seller accounts, and nearly as huge an uptick in inactive Amazon seller accounts.
Won’t bother me at all.
I think to resell correctly/effectively you need that extra layer of work and commitment, but to just blaze in and screw it up.. Anyone can do that! 🙂
You are so negative. What is the mission statement of your blog going forward?
I hope to make you smile, every day.
I don’t know about anyone else. But you exceeded my expectations, there, Matt.
I laughed out loud. Really loud, so loud it echoed in my kitchen.
Mission accomplished!
I’m betting it’s the same tone it’s always been: an introspection on the hobby- we undervalue the opportunity cost of our time. If, instead of caught up in the rat-race of the game, we learned a new skill to make us more marketable, we’d actualize bigger returns from our time investment, especially in the long term.
That’s pretty much it. Maybe I need to beat a new drum though… 🙂
Nah. You give good advice, you have a wickedly subtle and perverse sense of humor.
Some people prefer bowties. The more discerning prefer things that make them think.
Thanks MickiSue. I know I don’t appeal to everyone and offend a few, but good to know someone likes it!
Good points all, Matt. I’m taking a bit of a break from the whole game. Why? Gonna travel and burn points and miles! Built them up good with old style MS, but am making some new plans and doing some research.
And THAT is also work. There is always work involved in anything worth doing, but it is the approach that counts. Will I tell others what I do? No. Not at first. But there are *many* avenues out here to make money and points both that are fun, enjoyable and even though work, well worth the effort.
Points can be had as long as they are offered. The methods are going to have to change, but I think that 2016, rather than being a nightmare year for the points and miles “hobby” is going to help those who think and work and stick through it. The wanna-bes and spoon fed lazybones will fall by the wayside and as things tighten up, the survivors will find new avenues opening up.
Good writing as always but this post is a humdinger!
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The frequent traveler system we now know is based on banking, and banking curtains itself off with complex opacity to make the big picture almost impossible to see. Witness 2008, or try to find somebody at your local bank branch who can explain a synthetic CDO. This complexity explains how financial processing has doubled its portion of the US GDP in the past 20 years. But this is a capitalist economy, and whether you like it or not, that means it’s all based on greed. If there’s a way to turn a profit catering to the needs of travel hobbyists, somebody will do it. Some shiny new liquidation scheme will emerge just as fast as somebody figures out how to make it profitable.