Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Links in this post may provide us with a commission.
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A Year of Reselling
This past year was a tough one for generating spend with the easiest avenues being cutoff and the rules changing at many of the banks. For many it was suddenly tougher to generate spend and to meet the requirements for some of the more generous credit card bonuses.
Don’t get me wrong. Some opportunities do exist. Gift card reselling is a practice that has re-emerged for many as a good way to generate spend and it was especially good during the holiday season. Of course gift card reselling is sort of a business. Well, not sort of. It is a business.
Another business that helps to generate a lot of spend is merchandise reselling. As many who follow the blog know, about a year ago I decided to begin a reselling business. I had been reselling for years casually, but I finally decided to do it more formally and almost exclusively on Amazon FBA. This blog and my other writing are my full time work, so this was always a side business and never meant to be a full time job.
A Lot of Growth & Lessons to be Learned
The year of reselling ended up going very well. I started in December, 2016 when there were a ton of deals to be found. My scale wasn’t large due to just starting up, but I made some money. I also quickly learned that January can be brutal with a ton of returns that eat into your profit. Over the entire year in fact, I learned a lot about how to handle returns that I wish I had known back then.
Through the first 9 months of the year, I averaged about $30,000 per month in sales with almost all of it coming on Amazon FBA. Minuscule compared to many Amazon sellers, but a comfortable pace for me given the limited time I have. Some months were better than that and a couple were worse, with the slower months coming when I traveled a lot. In case you haven’t heard, I do love to travel, but it cuts into buying time! 🙂
More Time Invested = More Rewards Earned
As the business began to grow, it required much more time. I paid for Inventory Lab pretty early on in order to manage the accounting and more (well worth it), but simply receiving and re-shipping the items began time consuming. Thankfully early in the year I began working with a Prep Center that receives and re-ships many of my items.
One great side effect of this new business was the credit card rewards earned. For a lot of my purchases I used my AT&T Access More card to earn 3X at Raise for discounted gift cards and at online retailers directly too. I also used my various Chase Ink cards at Gyft, CardCash and Gift Card Mart to earn 5X on gift cards.
All of this merchandise buying along with taking advantage of gift card reselling opportunities has seen my Ultimate Rewards and ThankYou points balances swell. The various holiday airline portal bonuses have helped a lot as well. I am a points multi-millionaire despite having slowed down my new card applications.
Into the 4th Quarter
Throughout the year I took very little money out of the reselling business. I knew the business would need the capital in order to deal with the 4th quarter. While October ended up being much like the rest of the year, things began picking up in November. Those pre-Black Friday sales were big and things continued on from there.
One of the biggest struggles for a growing business is having enough capital. Despite re-investing almost all of my profits, the business quickly became cash strapped throughout the end of November and December as inventory swelled to 4X the normal amount. Suddenly our cards were being stretched to the max, but we managed to make it through and everything has been paid off before the due date. (No interest!)
The sales really started coming through in the middle of November. Since I had traveled for much of October, the beginning of the month was very very slow, but as my inventory began showing up later in the month, the sales began rolling in. And they haven’t stopped.
A Ton of Work
Since the middle of November we have been taking more of the inventory at our house, since the prep center has been overwhelmed and thus slower to turn around the products. In fact, since the first week of December, we have been processing all of our merchandise ourselves in order to get it into Amazon as quickly as possible.
This involved receiving a ton of boxes everyday and processing them. Our friendly UPS driver picked up a new shipment to Amazon everyday as well. Items never stayed in our house for more than 24 hours. It was a lot of work, but thankfully my wife and I have developed a decent process that is much more efficient than when we started last year, but we are still exhausted.
It Pays Off
All of this hard work along with the strain on our credit cards paid off. We finished December with $111K in sales for the month with almost all of it once again being from Amazon FBA. Again, a minuscule amount compared to many, but a lot considering the part time nature of this business. January won’t be quite as good, but it will still probably be double our previous best month.
In fact, I think the business as a whole has matured to a new level. I am more confident in my buying decisions and thus I think we will see strong sales growth this year. But, this isn’t my full time job nor do I want it to be. This means that we will need to hire outside help to perform most of the duties I was, since I simply don’t have time to do it. A good problem to have, but the transition will no doubt create more problems of its own.
A Good Avenue of Generating Spend
As you can see merchandise reselling is an amazing way to generate spend, but it is a business. A time consuming and often rewarding one. Not only have we earned about a million miles/points this past year from reselling alone (not to mention the other avenues of earning), but we have earned a decent profit. It has been a long road full of lessons, but one that I feel was worth it.
This blog isn’t about merchandise reselling and thus I only cover the topic from time to time, but I know many of you wonder about such a business. Hopefully this gave you a look into the process and experience of starting a reselling business. I am here to answer your questions as well! Happy New Year.
Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.