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.