Tuesday, February 9, 2016

Turnover Tuesdays - A Purchase Just for the Points

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.

The longer I have been reselling on Amazon (it really hasn't been very long - coming up on one year in a couple of months), it seems that I am stingier and stingier in what types of margins I look for.  I no longer make purchases just for the points if I'm going to break even.  I am too afraid of fees/returns and the price of those points.  That being said, every once in a while the stars align and a deal becomes available that I just can't refuse.

The Item - Garmin 610t GPS

I don't know the first things about GPS's.  Truth is I don't know the first thing about most of the merchandise I sell but this is a pretty expensive GPS.

I bought 10 of them from Cabela's for $399.99 each.  That's $4,000!  A big investment.  I hope this goes well ;)

Credit Card Points 

I bought these GPS's on 12/5/2015.  That's right in the middle of quarter 4.  I maxed out all of my 2-2.2% cards and my 1.75% card and anything else worthwhile from a cashback perspective.  Quarter 4 was really crazy.

In the end, I used my Chase Freedom for it.  It was the best card I had left with available credit.  So I earned 4,000 Ultimate Rewards points

Shopping Portal

This is where this purchase was crazy.  American Airlines was offering 9x AA miles per $1 spent at Cabelas.  That's 35,999 AA miles!  That's like a sign up bonus for a credit card!

Loyalty Points

I did not earn any loyalty points.

Fulfillment by Amazon Fees

I had a tough time selling at first so I ended up lowering my price at some point but as is usually the case when you lower the price, I sold too fast.

I sold the first one on January 26th for $519.98 and the last one on February 6th for the same price (just a couple of days ago).  I also waited for the person who told me the deal to sell his first.  I apologize for all those who I couldn't tell about the deal.  You have to respect the wishes of your sources.

Well, now if you go to the listing it's going for $549.99.  Argh!  That's an extra 7.5% of margin in a couple of days!  That would have been $300.  Oh well.  Patience, patience, patience.

Fees at $519.98 are $41.60.  Shipping was about $1 for each so the net is about $477.  Let's call it $470 since it took longer than 30 days I probably paid some storage fees.

The Haul  

I pad $400 (no tax) and I earned $470 so $70 a unit.  That's actually a solid 17.5% return not bad.

Here is how the numbers work
Cash = ~$70
Credit Card Points = 400 Ultimate Rewards points (per unit)
Portal Points = 3,600 AA miles (per unit)
Loyalty points = 0

While 17.5% is a nice return, I don't think I would have bought it (certainly not so many) had there not been a great portal available since I didn't know how fast it would sell.  I was able to earn 4,000 UR and 36,000 AA miles for little to no work.  That's a big win in my book.  Oh yeah, I also made $700 ;)

There you have it:  I'm always talking about how it's a bad idea to make purchases to resell just for the points but even I still do it!