This is the second part of Oren’s (from Oren’s Money Saver) guest post series on reselling products. Make sure you follow him on Twitter to catch some great deals.
Last week, we discussed the pros and cons of reselling in Part 1 of this series. Today, we will discuss how to receive the best possible price for your merchandise to lower your cost basis.
Once you have found your target, your goal is to purchase the merchandise for as little as possible (or to earn as many miles as possible). The purchase price should have no effect on the price you sell the merchandise for. The cheaper you buy it, the greater the profit and profit margin.
Here the main tools I use whenever I purchase anything, whether for personal use or for reselling. Even if you don’t resell merchandise (yet!), you can use these tips for your personal shopping.
Contents
Credit Cards
Sign Up Bonuses
Any credit card that you are working on a spending threshold is usually the best card to use. It’s tough to compete with an extra $100-$600 of a sign up bonus. You might also be interested in manufacturing status via credit card spending. Even if I have a new credit card, I might use an existing card if I am trying to maximize a category bonus.
Category Bonuses
Chase Ink
Many of my purchases come from Staples (more on that in a later post). A Chase Ink business credit card earns 5x Ultimate Rewards points on any purchases at office supply stores. In addition, Chase Ink earns 5x on eBay purchases from PayPal Digital Gifts (discounted gift cards – follow this blog to learn when gift cards are on sale) and there are ways to earn 5x Ultimate Rewards points on purchases of eBay gift cards and gift cards for other retailers.
Also, you can often buy Gift Cards at Staples (Online or in Store) and earn 5x on those purchases with no fees.
In my opinion, a Chase Ink credit card is the most important credit card for Manufactured Spending in general and, by extension, reselling merchandise. You can still be very profitable without one but it makes it much easier.
Discover Credit Card
A Discover credit card gives you access to Discover Deals which is one of the most lucrative shopping portals around (see below). With the advent of the Discover Double Cashback promotion and up to 23% cashback with Apple pay and Discover, a Discover card is a must have for any reseller.
Groceries Credit Card
Many grocery stores sell gift cards and you can earn your normal grocery store credit card rewards for gift cards. If you can stack this with fuel rewards, this can be extremely lucrative.
Pharmacy Credit Card
A pharmacy credit card like the American Express Old Blue Cash is another way to earn 5% on pharmacy purchases such as gift cards to use elsewhere.
I usually only get to this option if I have maxed out other avenues. Many of the gift cards overlap and I would rather earn 5x Ultimate Rewards than 5% cash. 5x Ultimate Rewards can always be cashed out for 5% and you can transfer the points to other hotel and airline currencies to earn outsized rewards. However, there is a cap to many points you can earn annually at 5x.
2% Cashback Credit Card
Everyone should have a 2% credit card at their disposal. This could be Fidelity American Express, the Citi Double Cash or any other 2% credit card. Dealer’s choice.
Best Buy Credit Card
The Best Buy Credit Card earns 5-6% in Best Buy Rewards on purchases at Best Buy. I often make reselling purchases from Best Buy so this is a nice card to have as well.
Shopping Portals
Almost as important as credit cards and sometimes even more important are shopping portals. You can earn an extra 1.5-40x the miles (or 1.5-40% cashback) on your purchases due to Shopping Portals. The recent Sears opportunity where you could earn up to 40% cashback with Discover Deals comes to mind. If you earn 40% cashback on every purchase at Sears, everything is a reselling opportunity. Unfortunately, 40% is not available anymore, but there are real opportunities out there (and it may come back in the last quarter).
I usually check Cashback Monitor or Cashbackholic before I make a purchase to see which shopping portal is the best portal for any particular store.
Discounted Gift cards
Most online purchases I make involve discounted gift cards. If I can save 5% on a purchase through a gift card (savings can be less or sometimes much more), that’s 5% of straight profit. Often times it means you are giving up the category spending on credit cards, but not always. I try to buy a gift card in a slightly lower denomination than the purchase price so that do not need to track the balance. Otherwise it goes in my gift card spreadsheet.
Usually, you can still earn Loyalty points and shopping portal rewards when you use gift cards. Best Buy is a notable exception.
If you don’t use a credit card, you lose the protections provided by your credit card. Usually that isn’t a problem since you aren’t purchasing it for yourself. Every once in awhile, it is great to have those protections when a customer damages the item and then returns it.
Website Comparison Tools
I use PriceBlink (extension in chrome). If I visit eBay, for example, to see the price of a PlayStation 4, PriceBlink will tell me if the same item is cheaper elsewhere (usually including Amazon – really useful if you are selling on Amazon). It isn’t always perfect but I find it very helpful. If you have a tool that you like better, please comment with your favorites.
Promo codes
You should always check for promo codes before you shop online. I normally do one of two things. I will Google “Sears Promo Codes” and see what pops up or I got to Ebates. They usually have an up to date list of promo codes available for that store.
Coupons from eBay
People sell their unwanted coupons on eBay. This is really great for Staples especially since they send out great one time use coupons. Be aware of the terms and conditions of the coupons. It won’t help you to buy a coupon for an iPad if the coupon excludes Apple products.
Loyalty Points
Many retailers offer loyalty points for purchases. Staples is probably the most generous, but many other retailers have them as well, including eBay, Sears, Best Buy, Kohl’s, Sam’s Club and others. Loyalty points are worth nothing until you use them, especially since many of them expire at some point. When you are a reseller, you are pretty much guaranteed that you will be able to make use of the loyalty points.
I hope to discuss the big retailers individually, we will also discuss their loyalty programs in greater detail in those posts.
American Express Sync Offers and Offers for You and Bank of AmeriDeals
American Express Sync Offers/Offers for You and Bank of AmericDeals are a resellers (and everyone else’s too) best friend. They usually don’t make the deal, but they almost always add profit to an already good deal. I have a lot of American Express cards to make sure I take advantage of as many sync deals as possible since they can be used for each card that has a deal attached to it.
American Express Gift Cards
When shopping portals are paying out generously for American Express Gift Cards, they can be a way to add 1-2% of profit to every purchase that allows for American Express Gift Cards. Right now, they are useless since portals aren’t paying out for denominations greater than $200, but hopefully it comes back as another useful tool in the arsenal.
Price Drops – Paribus
Paribus is a company that monitors your purchases (with your permission) via email transaction notifications. If the price drops, Paribus will automatically contact the company on your behalf and ask for a refund of the difference if the store policy is to refund the difference. I have been using Paribus for about 6 months or so and I think I’ve earned about $3. It’s a free program (they take a percentage of what they save you) so there is little downside unless you monitor it yourself. Even after your purchase, you can still sometimes save money!
Conclusion
Using the tools you already know, and hopefully some new ones too, you can stack many avenues of savings and turn a breakeven deal into a very profitable one under the right circumstances. Learn these tools well and you can profit handsomely.
Anything I missed? Let me know in the comments!
Note from Will (DoC): Thanks again to Oren for the second part of this series, hopefully you found this post useful and if you did then you’ll love the rest of the site. I also highly recommend you check out Oren’s site and also follow him on Twitter.
