Tuesday, July 21, 2015

Turnover Tuesdays - Buying Roombas at Bed Bath and Beyond

Disclaimer: I receive a referral commission for the following link(s) and I greatly appreciate supporting the site:  Amazon, Be Frugal, Discover

For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.

Week 1 - First attempt at reselling
Week 2 - My second straight fail
Week 3 - My iPad mini collection
Week 4 - Bed Bath and Beyond
Week 5 - An iPad Idea for Your Staples Gift Card Collection

The Item - Roomba 880

I love reselling from Bed Bath and Beyond.  They give out tons of 20% off coupons and you can return for no reason at all.  When the item you sold is returned, you will be happy you bought it at BB&B.  I love reselling from there so much that when my wife wanted a $20 item from BB&B last week, I bought another Roomba so that I wouldn't have to pay for shipping!

Bed Bath and Beyond sells the Roomba 880.  This is a robotic vacuum cleaner, which is very expensive.  Bed Bath and Beyond is currently selling it for $699.  The price has oscillated frequentlly between $699 and $594.  That will play an important role later.

Right now it costs $699.  Let's call that $750 with taxes.

Amazon sells the same item for $620 with $50 shipping, so that's $670.  In the past, I have sold the item anywhere from $593 to $698 (before I realized the price could climb so high).

It is also a #3 best seller in robotic vacuum (used to be #1) and #944 overall.  In my experience, when priced appropriately it sells fast.

Credit Card Points 

I usually buy Roombas with gift cards from Raise.  I try to only buy them when they are 8% or greater.  I have an alert set up for when gift cards are appropriate to buy.  If you buy the gift cards with American Express gift cards that you bought with Fidelity American Express when Top Cashback pays out 2.25%, you can add an extra 4% to that 8%.  That will give you a total of 12% off.

Checking Gift Card Wiki last night, there was one eGift Card for 10% off at SaveYa (weird to talk about buying GCs from them!), with credit card points that will equal the same 12% off.

Assuming a 12% price break, the Roomba will cost you $660 when the price is $699 and about $530 when the price is $594.

The 20% off coupon makes this a little complicated.  You end up paying about $515 after the gift card savings if the original price is $699 and about $460 when the original price is $594.

Credit Card earnings -  $0 - Built into the cashback from the GCs.  Technically you will get 2% cashback from Fidelity AMEX, but this is easier for me.

Shopping Portal

Discover Deals pays out 5% for purchases at BB&B.  If you are enrolled in the Discover Double promotion, that will double to 10% at the end of 13 statements.

Alternatively you could earn 8% right now with Be Frugal.  I could go either way.  I would probably choose Be Frugal here so that I don't have too much money coming from Discover and I can have the money more quickly.  I don't want any added eyes in my account.  I've already earned over $300 from Discover Deals in the last month.  Many readers have probably earned almost that much just from the Sears iPad deal from last week (Still available in Gold).

Normally shopping portals like Be Frugal pay out about 4% so this is a massive increase.  Likely temporary.

Total portal earnings - Let's assume 8%

$55.92 (8% of $699) or $47.52 (8% of $594).  Portals usually don't pay out for the taxes or shipping.

One of the advantages of using gift cards is that the price sent to the portal is much higher than you paid for the gift cards so you still get the 8% on the retail value of the item.

In addition, you are applying the 20% off coupon in store (I know, that's pretty annoying), but the portal applies before the 20% off coupon is added.

Loyalty Points 

None.  BB&B doesn't have loyalty points.

Fulfillment by Amazon Fees

Amazon charges a massive fee for these.

If you try to sell it for $698, Amazon charges you ~$117 and $8 shipping because it is heavy.  Let's call it $125 in fees.

If you try to sell it for $590, Amazon charges you ~$100 and $8 shipping because it is heavy.  Let's call it $108 in fees.

The Haul  

The final tally matters a great deal on how much you paid and how much you sell it for.

Let's do worst case scenario and best case scenario

Worst case scenario
Buy the Roomba for $515, sell for $590.  After $108 in fees, you lose $33

Here is how the numbers work
Cash = -$33
Credit Card Points = $0
Portal Points = $55.92
Loyalty points = $0

You come out ahead $22.  Not worth it.

Best Case Scenario
Buy the Roomba for $460, sell for $698.  After $125 in fees, you gain $113.  That's a very different situation.

Here is how the numbers work
Cash = $110
Credit Card Points = $0
Portal Points = $55.92
Loyalty points = $0

Now you come out ahead ~$165.  That's a margin of about 35%.  Not too shabby!

Likely your takehome will be somewhere in the middle, especially if you buy gift cards at a lower discount.

I know that I put the portal points as the same in both scenarios.  That is explained in the miscellaneous notes.

Miscellaneous Notes

  • You paid with gift cards so when you apply the 20% off coupon, they will give you back gift cards which you can use next time, but you don't get full cash.  You have now started the Bed Bath and Beyond Merry-Go-Round!

  • If you paid the higher price, you can bring in the 20% off coupon when the price drops down and they will give you a credit adjustment to the current price and then apply the 20% coupon.   I couldn't believe it when they did that.  
    • Therefore, your best case scenario is to actually buy it now at the $699 price so that the portal bonus kicks in at that price and then bring in the coupon after it drops to $594 at some point.  You don't even need to bring in the item, just your receipt.  I had already sold mine long ago when I saved the extra $100.
      • It is possible that the price never drops back down and it is possible that you won't be able to sell at the increased price.