I am testing out an idea to Drop Ship a product purchased from Staples.com and sold via eBay.com in order to create Manufactured Spend, and perhaps some profit too. This is my first attempt at doing so, and I am excited to see the results. This method, if successful deals with all of my problems with buying and selling for profit.
In this post, https://saverocity.com/travel/buying-goods-for-chase-ultimate-rewards-and-selling-them-on-ebay/ I outlined the strategy that I am deploying today, the differences I am using today are to address with what went wrong last time around.
As with any scheme or idea to increase spend you have to be able to ‘float the cash’ when things go wrong. My last experience was the perfect storm of things going wrong, I purchased a Tablet for resale for $571, budgeting $25 for shipping and hoping to get over $650 in order to break-even. For more details on that one see this post:
And I got it! I had a winning bid of $651, someone stepped in and outbid the highest offer of $650 at the last minute, and I would sell for a small profit (after eBay took their 9% fee – now increased to 10%!) the profit, of around $5 wasn’t the purpose of the sale, it was to earn Ultimate Rewards points AND increase my Staples Spend. I want to spend $1,000 per year with them in order to keep ‘status’, this allows me to redeem $40 per month in Ink Recycling that I use to bring down the cost basis of my purchases.
However, my buyer flaked out on me, and in a fit of buyers remorse asked to withdraw their bid, it has never happened to me before, but what can you do? I offered the Tablet to the second highest bidder, and then the third highest, and nobody wanted to know. I relisted for 7 days and sold it for $575. Furthermore shipping came in at $50 with insurance so altogether I netted a cost of about $90 to acquire 4000 Ultimate Reward points, shockingly bad.
Lessons Learned
When the buyer exited the sale, I realized I didn’t want to be stuck holding a product and hoping to resell it – every day I have it increased the chance that a new model would be released and I wouldn’t be able to get rid of it, so that, plus the bad buyer, put me off selling for points ever again. However – I am trying something new now and am going to attempt Drop Shipping for manufactured spend instead.
Drop Shipping for Manufactured Spend
The concept behind drop shipping is that you never own the product sold, and you get the retailer/wholesaler to ship directly to your customer, whilst your customer pays you. The profit is found by finding a price that is above what the Retailer is offering, and a customer willing to pay it. In order to broker this you need to be able to find a way to reduce from the MRRP and be competitive at Market Price also. I do this by using all the tricks that we Travel Hackers know about already, such as shopping portals and coupons.
I won’t share exactly what I am doing to test this, because I don’t want people copying me if it blows up in my face! I don’t know that Staples will even allow me to ship to someone else other than myself, but if it works, we could have an interesting way to earn points and profit with no overheads at all.. stay tuned.
Current Status-
I have confirmed the Product I want to sell is available on Staples.com, cross checked the asking price on eBay for the same item and have listed a 1 day sale on eBay. If the items sells, then I will then buy the item via whatever portal is most competitive at that time (likely Ultimate Rewards shopping) pay with my Ink BOLD for 5x Points and have Staples ship to the customer. My card bill will be paid off before I even make the purchase, pretty neat if it works out!
Here’s the update! https://saverocity.com/travel/drop-shipping-for-manufactured-spend-day-2-update/
Neat indeed!
Delivery time – if your supplier can not ship the products fast, then your customers will be unsatisfied, leaving you bad reviews and sinking your reputation.
Funnily, around new year’s this year, the Microsoft Store was selling the Nokia Lumia 520 for $49 IIRC and the Lumia 521 for $59. Meanwhile, the eBay prices for these were around $75-80. I tried this as an experiment myself to see why market asymmetries like this work. I was able to sell 3 of these by listing on eBay and, after receiving the funds via PayPal, placing an order on the Microsoft store for direct shipment to the “winning” bidders on eBay.
I made a small $ profit, and it was clearly not worth the time, but it was an interesting experiment. Now I wonder why those people who bought on eBay at the higher prices did so – if they had internet access they could just well have bought directly from MS.