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Reselling Isn’t For Everyone
I have talked about reselling briefly on Miles to Memories before, but not in great detail. That is because I am not a huge fan, but I am not a novice either. Anyone who gets into the deals space has to resell at some point in time I think. Why?
The LG G Watch Deal
Some deals are just too good to pass up. One such deal hit my radar about three months ago. AT&T was selling the LG G Watch for $50. Considering the watch sells for about $120, that was a great deal. I then went on to purchase 2 orders of 4 each. (The limit.)
For some reason, AT&T decided to cancel all of the orders for non-AT&T wireless customers. This meant that I suddenly was not going to get the watches. That was fine I guess, so I moved on. Then one day a box with four shiny brand new LG watches showed up. Somehow AT&T had shipped one of my orders.
I also looked and my portal cashback had gone through for 10% as well. So for $48.65 including tax, I had a product that I could resell for a 100% profit. Wow! Of course, I found this deal because I wanted the watch myself, so I kept one and shipped three off to Amazon to sell.
Amazon Sold Them Fast
When Amazon received the watches, the price was holding steady at $119.99. Within a day someone had bought the first wach and shortly later a buyer purchased the other two. Basically within 24 hours Amazon had helped me double my money. Or did they?
A few days ago I logged into my Amazon seller account and found a chargeback for 2 LG G watches. The person who purchased two of them decided to return them. But instead of just returning them, she “claimed” they were defective. Most likely she did this since Amazon doesn’t charge you return shipping on defective merchandise.
So my watches were returned to Amazon, but guess what? Now that they are “defective”, Amazon won’t sell them. This means that I have to have them shipped back to me (at my expense) and then will have to resell them as used now. Thankfully my profit margin was big, but this is definitely a hassle.
The Float & Calculations
Thankfully in this situation my float is actually quite low. But what if I was selling something much more expensive? Not only would I be floating the money I used to buy the merchandise, but I would be taking a huge hit in value since it can’t be sold as new anymore. It could be a big loss.
What if I purchased those watches for $100 and resold them for $120? After all fees I might have made a $5 profit at that price, but the returns would have killed it. After I get the watches back, I’ll be lucky to sell them for $80 used. You need to account for returns in some way.
To Resell or Not to Resell
I’m not saying that people should resell or shouldn’t resell. I have resold enough over the years to know it is worth it when I get a great deal. I’m not sure the time and effort (and hassle) is worth it for me as a full time thing. With that said, it works perfectly for many and that is great. I just want newcomers to be aware of some of the pitfalls.
As I mentioned a couple of weeks ago, I am in the process of selling about $5,000 worth of merchandise in order to work towards my minimum spend on the American Express Business Platinum card. Based on current prices, I should do a little better than breaking even, but to be honest, I think the gift card game is more my style.
Dealing with returns, customers claiming packages aren’t delivered and more issues is all part of the reselling game. It is important to account for these issues when reselling in any volume, since things will happen and you will eventually run into a problem.
Do you resell? What is the worst issue you have come across? Let me know in the comments!
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.