Yesterday I attempted to Drop Ship to create Manufactured Spend and so far things are working out- trust me when I say it is far from being a proven concept though as at any moment it could all still go very wrong. However, on Day 2, assuming all goes well, I have been faced by another tough dilemma which I have to wrap my head around… take the cash or take the points? Let me explain.
The concept of selling for profit is to buy a product for less than you sell it for (adding in all costs for the transaction, such as eBay Fees of 10%, and Shipping). However, since we are selling the Saverocity way we are looking for a little more profit on top of this, so its not a straight cash example, its points too.
Reasons why I picked Staples.com to sell from – these all stack!
- 5x Ultimate Rewards using my Ink Bold Card
- 5% In Staples Rewards
- 2x Ultimate Rewards (also could have picked 2% Cashback from Ebates, but I haven’t used this company so would rather the Ultimate Rewards).
- Product was on Sale – reduced by $120 (expires TODAY! 5/25)
- Product is eligible for $100 coupon discount (expires on 5/27)
- Product is eligible for Staples Ink Rewards payment (I get 1 x $40 coupon per month, and have 2 currently).
- Free Shipping – hopefully direct to the buyer….
All told, I was able to find a product for $347 sale price, after applying all my coupons, that will net me the following:
- 7x Ultimate Rewards on $347 = 2429 Ultimate Rewards
- 5% Staples Rewards on $347 = $17.35 (can be spent at Staples)
- Cash Profit – current price on Auction is $465 I think this will go up… and I am shocked! Already, if I can get Staples to ship I have a profit of $71.50 ($118 minus eBay seller fee of $465)
Dilemma Time – do I increase my cost basis in light of the higher than expected sale price?
I have the option to Not apply the $40 (x2) in Ink Recycling Rewards, and keep them… should I do it? Let’s look at 3 scenarios, assuming a sale price of $465 minimum:
Scenario 1, above, keep the cost basis at $347 and make the profit as outlined above.
Scenario 2, apply just 1 of the 2 $40 Ink Recycling Vouchers to the sale, my cost basis becomes $387, and:
- 7x Ultimate Rewards on $387 = 2709 Ultimate Rewards
- 5% Staples Rewards on $387 = $19.35 (can be spent at Staples)
- Cash Profit – current price on Auction is $465 I think this will go up… and I am shocked! Already, if I can get Staples to ship I have a profit of $31.50
Scenario 3, apply no Ink Recycling, Cost Basis becomes $427
- 7x Ultimate Rewards on $427 = 2989 Ultimate Rewards
- 5% Staples Rewards on $427= $21.35 (can be spent at Staples)
- Cash Profit – current price on Auction is $465 I think this will go up… and I am shocked! Already, if I can get Staples to ship I have a loss of $8.50 alternatively, you could look it as buying 351 URs for $1 Dollar, (plus getting $21.35 in Staples Reward)
Stay tuned… I’ll let you know how it works out.
UPDATE- Day 2 1/2 Disaster Strikes!
Anytime I have the opportunity to liquidate Staples Rewards or coupons, I do so. Why? Because I don’t really need anything that can be bought there.
Yeah, I think liquidating is a good idea – the concept I am playing with right now though is reducing the purchase price down enough to cover shipping and eBay fees to zero, then making as little profit as possible so as to maximize spend. EG If I can sell something for $120 on Ebay I need to cover $12 (fees) plus say $10 (shipping) so if I can purchase it for $98 I make no profit, but I get $98×5 URs plus 5% cashback…
Don’t forget the 2.9% fee that paypal charges too.
I’ve heard of the fee, but I have never seen it… If it applies I guess they sneakily slip it in when I am distracted… once the dust settles on this sale I will track closely to see when it happens in the transaction, because if it does you are right, it makes a big difference!
fascinating!
Supplier honesty – In a dropshipping business, a good supplier means very much. There have been many cases where suppliers cheated the sellers, sent defective or cheaply made products to the buyers, so it is very important with which supplier you start the dropshipping business