ppisklak

Mods : Feel free to move this thread if it is in the wrong place.

So, I posed a question to the FatWallet forums relating to frequent flyer miles, and I got a harsh response - it seems they just don't understand the value of frequent flyer miles. I will post excerpts here - need some reassurance that I'm not crazy - or at least that you all are as crazy as me


"First of all, just wanted to give a collective "thank you" for all the great advice I've found on these forums so far.

I am trying to buy wholesale and resell mainly to earn credit card points/miles and not for profit in the traditional sense. So my question to you is : What do you think is a good product that fulfills the following requirements?

1) Can be purchased wholesale with credit card
2) Can be resold on eBay at cost (so that I end up breaking even in terms of
profit but earning the credit card miles).

Any advice is greatly appreciated. Feel free to reply to this thread or PM me."

Responses :
" This has got to be one of the dumbest ideas I've read on these forums."
" Selling things at cost to get miles, hahahahahahahha"
" If you need 2 million, you better go and pre-order the newest ferraris and then sell them on eBay as soon as they come in. That way, you'll have about 20 to 30 italian sports cars to sell, instead of 2 million pairs of tube socks."

I figured I'd get a better response here. Any ideas?

Thanks.

alphaeagle

This seems like too much of a hassle for me, but if you are interested in this you might as well try make a tiny profit. A profit of $.03 for each sale, for 2 million tube socks = $60,000.

ppisklak

Guess I need to look for wholesale tube socks now!

biggestbopper

Have you actually done this resale for miles thing? If so, what kind of products have worked in the past.

Maybe you can buy stuff at Costco in giant packages and break it down for individual sale. But with the sales tax at Costco figured in I have to wonder if you can even breakeven, not to mention your time and the shipping. Or are you planning to get a resale license?

I'd love to know if this has actually worked!

By the way, John Muir loved tube socks, and so do I! Why do socks need heels?

Raffles

How about buying pre-paid mobile phones, unlocking them and then selling them on ebay? This works because pre-paid phones, at least in Europe, are massively subsidised by the network operator who wants your custom.

Last year I bought phones at the supermarket for £50, unlocking them in 5 minutes using codes found online and then reselling them on ebay for £70. The main driver of this was that the supermarket, at the time, was offering loyalty points worth 2,400 BA Miles for every phone you bought, so it was an exceptionally good deal!

bugger_not_plz

Suppose you sell packages of tube socks (or widgets or doodads or whatnots) for $5 on ebay, which equals exactly what you paid for them at Costco (incl. sales tax) plus the fee you pay ebay (to comply with your statement that "I am trying to buy wholesale and resell mainly to earn credit card points/miles and not for profit in the traditional sense"). Buyer pays shipping and you break even on that. Further suppose no buyers ever stiff you and no buyers ever say something got lost in the mail. Further suppose you become incredibly efficient and you can complete one ebay transaction (listing plus any correspondence plus order fulfillment plus leaving feedback) in five minutes. That gives you twelve sales per hour times $5, which equals $60, which equals 60 miles. Supppose you value miles generously at 2 cents per mile. 60 miles are worth $1.20. So you are working for $1.20 per hour.

The minimum wage in my state is $6.50.

nixande

You will need to be careful in regard of doing this business and need to involve tax clearance.

I'll give you some examples, I think you should get the idea and please think about the implication in your market and check if this applies to you or not.

The following is specific for Germany but the ideas / concept behind this should apply to every country in one way or another.

- if you do sell / buy you have a business which is called "gewerblich" meaning if you overdo a certain amount of revenue each year, you have to add sales tax to your selling. Or the other way round: You will have to pay those sales taxes and therefor have to add them before you sell / buy.

- if you sell commercially (not as a private person) your customer has different rights on returning the goods to you and how you are liabable for damages through the product / the transportation / etc

please note that the difference between private and commercial is not made by you as in "let's see how I can trick the system" but on how your goverment determines this. In Germany it is considered commercial if you sell regulary on ebay and you have to proof that you sell like on a yardsale your stuff under market price.

- if you do sell / buy and are considered commercial, your insurance might not cover accidents / fires etc. If for example your house burns down and you say "but I had a load of mobile phones in them!" they might even say they don't pay at all.

- your tax department will not care if you do or do not want to make profit in the traditional sense.

- on the other side, if you make a business out of it, you will be able to have deductions.

- credit companies earn their money mostly with selling your profile and doing these kinds of transactions will flag your account very soon. if you credit card is only allowed for private transactions, this might cause a problem.

These are just some aspects not to put you off but to warn you a bit. And: Please be aware that you are also ruining sales and prices for people who have to live of such kind of resale if you don't factor in the costs you are definetly having.

Examples:
- you can either store goods in your house / appartment or do as others are bound to do, have a special store which has to have insurance
- they have to pay healt insurance / liability insurance to stay in business
- they have to pay money to be allowed to conduct business
- they have to set up their business
- they have to spend time in dealing with customers / dealers / sellers
- and most importantly: they have to live of it.

This is the typical housewife example. "Oh, I don't need the money, I will sell these for the price I buy them for because I like it. And see, I am so much cheaper than the person over there in the store!"

Now, back on how to accomplish what you ask for.

Miles & More has a system of offering miles for people who take subscriptions of magazines. Some of them are interesting and a bargain compared to buying some. Make yourself known as the person to go to to know about such deals and sell such subscriptions to your friends. Go through the possibilities of your airline(s) to see where those bargains are.

Do you know of people who order stuff in larger values where you might play middleman? So you are sure to get the money but don't have the hassle of the rest of the business.

From here in Germany I would probabyl do import of goods other would like to receive from the US but don't want to deal with customs and alike themselfes.

Some airlines / companies / hotel groups offer signup bonuses if you refer a friend. Are there ways how you can do this without alianating yours?

I don't know how it works with selling miles. I know that some airlines allow you to give away miles for your employees - maybe there are miles you can give away / sell yourself?

Sell your knowledge to your friends. "You give me one hour of time, I apply my flyertalk wisdom and you buy me x miles for it."

Services like igoyougo.com allow oyu to work for miles.

Thousand ways to do this, but i would stay away of too much investing money. Smaller steps might be more helpful.

hth
Nicole

ppisklak

"Have you actually done this resale for miles thing? If so, what kind of products have worked in the past."

Yes - I did Ipods whenever Target was running 10 miles/$ promotion.

"Suppose you sell packages of tube socks (or widgets or doodads or whatnots) for $5 on ebay....That gives you twelve sales per hour times $5, which equals $60, which equals 60 miles. Supppose you value miles generously at 2 cents per mile. 60 miles are worth $1.20. So you are working for $1.20 per hour.

The minimum wage in my state is $6.50."

The idea is to sell more expensive items than tube socks, i.e. Ipods.
Using your math with Ipods (we'll say they are $200) and keeping in mind I use a Starwood Amex, so 1.25 miles/point, the per-hour figure comes out much higher (although I don't expect to do twelve sales per hour).

Thanks for all the comments.

925

Great idea if you pick the higher value, higher volume, always in demand products. I have NO idea what they would be - discounted iPods, unlocking cell phones, etc sound great. Make sure it is something you understand and that you don't tie up too much money at one time so that if something goes wrong you minimize your risk and exposure.

toomanybooks

Nicole:

Businesses in the USA are under many many fewer and less severe restrictions that those in Germany and the EU.

Too many details to go into fully, but we are not required to have regular health insurance paid by the business, sales taxes are less than VAT and not due on most out-of-state sales (you know we have 50 states), we mostly have no laws against operating during certain hours, etc.

"if you sell commercially (not as a private person) your customer has different rights on returning the goods to you and how you are liabable for damages through the product / the transportation / etc"

This distinction between return rights and damages in shipping depending on who is selling is not one I have heard of in 25+ years in business in the US. Generally these things are controlled by state laws and the Uniform Commrcial Code, and everybody in theory must abide by them.

"In Germany it is considered commercial if you sell regulary on ebay and you have to proof that you sell like on a yardsale your stuff under market price."

This would generally not be a concern here. Whether you are a business if you sell on ebay is basically left to the states. As long as you honestly pay state and federal income taxes on the profits on what you sell and sales taxes to your state for things you sell in that state (usually about 5%, collected from the buyer), they leave you alone and hope you make money.

There are some rules on "predatory pricing" (minimum sales prices) with regard to milk and sometimes steel and other items, but mostly no inquiry is made into the price at which you sell things, if you are a small business.

"Please be aware that you are also ruining sales and prices for people who have to live of such kind of resale if you don't factor in the costs you are definetly having."

Although some groups make a lot of noise about this, undercutting the price of somebody else is considered "the American Way." If I sell you something for $100 and the next guy can sell it to you for $95, virtually nobody cares about the fact that I am now out of business. It's up to me to figure out how now to sell the item for $90, not to complain to the government to stop the other guy.

And from our point of view, that's the way it should be and part of why we have such a dynamic, wealthy, and growing economy.

I find your comment about importing something from the US to Germany interesting. What sort of items do you think would sell well that way, that German consumers can't get in the usual way?

Thanks.

gemac

I have never done this, but I know that it has been done. Most of what I am aware of is individuals who sell to consumers in foreign countries. Often what they are selling is fairly high-ticket items that are subject to high import duties in the foreign country. I don't know how the items are described on shipping customs forms, but my general impression is that somehow, duty is not paid. I don't know whether this violates any laws in the shipping country or the receiving country.

holtju2

IMHO not worth the time to get just the miles unless you are able to make a decent profit on the items as well.

If you do it through eBay you must calculate approximately 10% of the final value for eBay and PayPal fees and depending of the product additional 1% to 2% for PayPal credit card chargebacks from fraudulent buyers.

bugger_not_plz

Take a popular ipod at a list price of the $200 you mentioned: a white 2 gig nano. It's $180 with free shipping from amazon. You will need your buyers to pay shipping and you can't just ship them parcel post because you will need a shipping method that has a tracking number (so your customers don't rip you off blind). So if you sold your 2 gig nano for $160 plus $10 or so shipping, you would have few buyers because, for a $10 difference, people would rather buy from amazon than from Joe Blow on ebay. So you would need to sell them cheaper than $160, and you will have to bear ebay/paypal costs.

Suppose you have sterling credit and get a $20,000 limit on your SPG Amex. You would then have $20,000 in purchases per month. (Those who exploited Savings Bond Direct learned that paying their SPG Amex balance mid-month didn't necessarily reset their credit limit.) If you buy for $145 each from Mr. Imaginary Wholesaler who will sell them to you cheaper than he sells them to big retailers, this means you are selling 138 ipods per month on ebay. You must find a wholesaler who will sell them to you in lots of 138 for this price. The wholesaler must also take Amex.

You get 20,000 starpoints in a month. Enough for a domestic ticket.

If you work part-time at $6.50 per hour ($6.50 times 20 hours times 52 weeks divided by 12 months) you gross $563 per month.

ALadyNCal

If your net result is breaking even or 'some' small profit and FREE MILES (esp. when your credit card or retail source offers extra miles) ~~ why wouldn't it be? Miles for free (or almost free) is what most people here are seeking

BTW, I think about this scenario often, but don't have a product to suggest that is a good solution.

Good luck to the OP

biggestbopper

As several earlier posts suggest, unless someone has discovered (a yet to be revealed) product which can be sold at a very large profit margin this plan is only useful for someone who values their time at pennies an hour. And, who is willing to take some pretty big risks for the not so very big potential profit.

I await a post form someone who has actually done this--with details.

Otherwise, its all just fantasy.

But don't let me rain on your parade. It someone really can do this, great. But, I would like to hear details, no speculation. Maybe we can partnerup and fly around the world First Class a dozen times for free! (taxes excluded).