$1 Million Travel Rewards Reselling Business
While we cover a lot of gift card reselling ideas and deals on the site and in our Facebook reselling group, I have also from time to time written about my endeavors reselling merchandise over the years. Mark has also written some awesome posts about his forays into reselling tickets, merchandise and gift cards. Check out our posts: 5 Things You Absolutely Need to Know About Merchandise Reselling for Manufactured Spend! and Amazon Reselling Demystified: Lessons, Tips & Tools to Succeed!
Related: $1 Million Reselling: 5 Frustrations & Drawbacks to Reselling Gift Cards & Merchandise
Why Resell? It’s All About the Points!
One of the reasons we have been drawn to reselling is because it can be a great way to generate points. We earns thousands/millions of points on purchases and then turn around and make a profit when selling what we buy. If this all sounds more like a business to you than a hobby, that is because it is. Reselling is a business.
My Reselling Journey
I have been reselling stuff on and off for about a decade. Up until a couple of years ago I would only sell something when I found the occasional homerun deal. For example, I scored a few Nexus phones back in the day when they were hard to get and flipped them for a nice profit. I probably did this with various products a handful of times per year. Easy money and some nice rewards too!
Then, back in 2015 I was finding more and more deals. I remember for example an iPad deal that earned thousands of points with minimal risk and a nice profit. As I began to sell things more, I became more comfortable with it. Finally, back in October, 2015 I decided to go all in. I had been finding so many deals that I decided it was actually time to focus more on reselling.
4th Quarter 2015
Given that I made a commitment to merchandise reselling late in October, 2015 I didn’t have a lot of time to build up inventory before Christmas, but I still made a solid effort. More importantly, I learned quite quickly how magical November/December can be for someone who sells merchandise. Prices go crazy and things fly off of the shelf. Despite my lack of inventory, it was a great start.
Growing in 2016
With lessons learned from my first “Q4”, I forged on into 2016. Given that reselling has always been a second job, it became tough over the course of the year to balance my other work with the need to feed the machine (inventory), but I managed a modest effort. Thankfully I was able to pull some of my wife’s time as well and we slowly settled into a system where we each had a “job” within this new business.
My wife began handling all of the prep work and I continued buying. It took a long time for us to implement an efficient system, but we eventually evolved and managed to finish 2016 with about $440,000 in merchandise sales including our first month over $100K in December. Not bad for a first full year.
Related: Beginners Guide to Ticket Reselling for Manufactured Spending and Profit
Setting Records in 2017
By the beginning of 2017 our business was fully established. The more we worked at it, the easier it became. My wife continued to improve her ability to prep and ship stuff faster while I became better at finding deals and more confident when determining how much to buy.
Then, towards the Summer a few paradigm shifts towards retail arbitrage really opened the flood gates. I had suddenly learned a new skill and used it to obtain a ton of profitable merchandise in stores. It was more time consuming than buying stuff online, but in many cases it was much more rewarding.
March to $1 Million
My “stretch” goal for 2017 was to hit $1 Million in merchandise sales with over $400K in sales for December. While I fell a bit short, I did manage to hit $940K in sales (97% was Amazon FBA) for the year with a fairly healthy $352K in sales for December. If you add in ticket and gift card sales the number jumps high above $1 Million in sales for the year!
Related: FBA Reselling Tools: 9 Must Have Tools You Should Have In Your Arsenal!
$1 Million Sales = How Many Rewards?
But how many miles/points/rewards did I earn?
To look at the rewards side, let’s look at a few numbers. I’ll use just Amazon sales to make things a bit simpler.
- Amazon Sales 2017: $921,144.79
- Cost of Goods Sold: $478,998.69
My business generated almost $479,000 in spend in order to get $921,144.79 in sales. Another way to look at it is that I purchased my merchandise on average at 52% the cost of what it sold for. Not bad profit wise (there are many fees too of course), but it also means I earned a lot of rewards.
CLICK HERE to compare travel rewards credit cards.
Citi ThankYou Points – All of our online purchases earned 3X ThankYou points due to our AT&T Access More Card.
Chase Ultimate Rewards – We earned 5X on A LOT of purchases thanks to our small army of Chase Ink Plus/Cash cards. Unfortunately we have lost some of those 5X avenues, but not before we racked up over 1 million Ultimate Rewards points in 2017.
American Express Membership Rewards – We racked up a modest amount of Membership Rewards (about 400,000) thanks to the Blue Business Plus earning 2X everywhere and points earned for various Amex Offers on our other cards.
More Rewards
There are a few other cards we used to max out our rewards on spend:
Discover/Freedom – We made sure to earn 5X whenever possible by utilizing these rotating bonus category cards.
Alliant 3% Cashback – A nice little addition to our lineup was the Alliant Credit Union cashback card which earns 3% on all purchases the first year.
BofA Premium Rewards – Since we are Platinum Honors with Bank of America, we earned 2.625% cashback on all purchases with this card. It has a much higher balance than the Alliant card, so it gave us more flexibility when spending big.
CLICK HERE to compare these and other travel rewards credit cards.
Bottom Line
What started as a miles/points obsession has turned into a pretty large business which not only generates profits, but also earns me a TON of points. While we certainly aren’t even close to being the biggest resellers, we are happy with our journey, the miles it has generated and of course the memories we make with them!
Want to learn more? Join our Facebook Reselling Group!
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Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
[…] like a good idea at the time that wind up in closets or in the trash. The diligent among us might resell them […]
What was this “new skill” you learned in 2017 for RA?
hi shawn, question about reselling? have you try ebay? i have been selling stuff on ebay for past 15 years, this is my main source of income, but every year i get less traffic, thinking about selling on amazon too. i would like to know if you try selling on ebay too? if you did, how come you choose amazon over ebay? thank you
Congrats! I am sure for you (and the rest of us resellers), losing 3x jetblue at amazon hurts! I was able to score 2 millions jetblue points over the last 18 months or so…not bad! But more opportunities will always pop up I am sure. Can I ask how you get around paying sales tax? I have found some retailers are hesitant to accept sales tax exemption certificates.
Great article Shawn. Do you have a link to your FB Reselling group?
Here you go Earl! https://www.facebook.com/groups/mtmreselling
The IRS is probably enjoying this article. How do you handle taxes?
I have a registered business, an accountant and pay all applicable state and federal taxes.
Honorable
[…] full mode into reselling while he lets Mark! and others write in his blog. He has a post about his reselling experience. My thoughts about it were posted here. You make up your own mind, be responsible Oh wait, he […]
Congratulations on the sales milestone. I resell for a living and haven’t reached your gross sales level yet. I am glad to see that your ROI seems to be a reasonable number. Too many in the points game are happy to breakeven, get a single digit return or even take a loss. To those that are trying to make a living, that is painful to compete against.
I happened upon the points community because I realized my organic spend wasn’t rewarding me as much as it should. If I had discovered MS back in the early days, cash flow would not have been such a restriction. It is interesting to see how differently this community approaches reselling as opposed to the folks whose primary business is reselling.
Curious if you ever do RA while travelling? I realize that your destinations may be too exotic for much of that, but some resellers use RA to aquire merch that is OOS at home.
Do you have any tips on selling tickets? I used to do it here and there, and made some decent profit. But lately, it’s not even that I’m selling at a loss – I’m not getting any sales. I scored tickets to a highly anticipated Broadway show. I’m keeping one for myslef, but can’t get any interest in the others.
This post will be featured in my Wednesday post. And our discussion in the comments in today’s post.
I am just posting here hoping to draw some readers to my blog because my Alexa ranking numbers are imploding as Ingy has abandoned me 🙂
Congratulations, that’s so great! How can we find you on Amazon?
Thanks Jennifer. We don’t share our store name publicly right now, but may at some point in the future.
Congrats on the huge jump in revenue! Does COGS include Amazon fees? Those fees just keep going up and in my experience customers seem to be using Amazon and other retailers for trial or to “rent” items. Makes me step away from high ticket items and electronics despite the larger margin unless it’s possible to do volume.
Would be great if you could share how you keep track of your gift cards and inventory!
Thanks mw. The COGS does not include Amazon fees. The numbers I provided are simply my gross sales and actual cost of goods. I had to hold some stuff back! 🙂 I agree that Amazon keeps raising fees which is incredibly frustrating and has forced us to adapt. We are still able to make a decent profit, but like you will only jump on some higher return items if we have huge margins or if we are able to spread out the risk by getting a lot of an item.
Shawn, I would also like to know if you are considering any reselling courses at an FTU or similar event. I might guess you probably have some secrets you might not want to divulge just yet. Thanks!
We are considering doing an event on our own, but do not participate with FTU. If we do something it will be announced here. We also have our reselling Facebook group and are looking into perhaps doing a more premium offering with much smaller groups of people.
Second job netting $350k profit after expenses/fees and before taxes?
Real job must be netting much more than that to explain keeping it at all.
I used to run this blog, write a lot for another big blog and do the reselling. Since then I have hired some amazing talent here to help out and have moved more into an editor’s role which has allowed me to work on the reselling as well. Of course there are a lot of fees when selling on Amazon, so I didn’t net quite $350K but it has turned into a nice business nonetheless.
Great post. Obviously, your blog is in a points and miles area, and you travel a great deal, presumably with your wife a lot of the time. What do you do with getting your merchandise out if you’re away for two weeks? Also, do you ever do reselling courses at an FTU or similar event? TIA.
Hey Christian. I have spoken about reselling at the Chicago Seminars the past couple of years, but don’t have a plan to speak at any conferences this year other than on a panel at Zorkfest in May here in Vegas. I don’t speak at FTU conferences, but am considering having an MtM conference for readers one day so stay tuned.
As for traveling, it does put a dent in our operations. Generally we have shipments placed on hold with Fedex and UPS and sort of pause operations and resume when we get back. There are times too when I travel alone and my wife continues with her end. It really varies, but it’s tough since we love to travel.
This is very impressive. I resell full time and am embarrassed to report that my gross sales are terrible compared to yours, and my margins are equally as terrible. Amazon is such a PITA and money suck these days that I’m completely winding down my resell business. I’m glad that some people are still able to make the economics of Amazon work for them.
Amazon keeps sticking the screws to sellers and unfortunately the fees are getting to be an issue. With that said, I still will be able to make money, although I have had to shift my focus to different items in some cases and have had to become more efficient since storage is now becoming so expensive with them. It certainly isn’t as easy as it was.
I heard about retail arbitrage. I want to learn more!
It is a pain in the ass when you have to deal returns or chargeback. I used to do some reselling before too.
This is so true.
This is definitely true, but if it is factored into the business then it becomes manageable. With that said, no matter how much I know a certain percentage of items will be returned, it still bothers me, especially when someone trashes an item and then I have to eat the cost.
That is amazing. I might have to start reselling instead of MS someday.
hi, i have a question for you if you can share with us.
What would you do if the buyer requests for return and was opened/used.
We all know Amazon has very easy return policy and buyer usually wins.
Do you return the used merchandise back to where you bought it or sell as refurbished.
I factor in returns into my buying decisions. On average about 5% of my items are returned, so I make sure I have a profit margin high enough when buying. For example, I won’t buy something with a small profit, since returns will wipe that out.
For items in a higher return category such as electronics, I try to procure enough units to spread the risk out across them or make sure the profit % is higher. Amazon is overly generous with returns which can definitely be frustrating.
Very impressive! What type of merchandise do you normally resell?
A variety of stuff. A lot of electronics, household items and toys, but I also definitely go outside of those categories as well.