Tuesday, March 15, 2016

Turnover Tuesdays - "Like New" is not Close to "New"

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 Item - LG PW800 Minibeam Projector

I bought this projector from Best Buy for $300.  It has since been discontinued which is usually a good think when selling on Amazon since you can usually get the item for cheap and the supply at Amazon is not likely to be replenished.

I bought 3 for an average price of $320.99 with tax as you can see from the picture.  This was on October 2, 2015

You can't sell them as New and I knew that (see what I did there!  Sorry, I'm a Dad).  I was ok with that since it was selling for about $500 for new at the time and I usually discount about 10% from New prices so I thought it would still be a good sale.

Credit Card Points 

I used my Discover Card.  I earned $3.21 now and I will earn $3.21 when my cashback is doubled.  Coming soon now!

Shopping Portal

I used Discover Deals for 5% cashback.  That's ~$15 now and ~$15 when cashback is doubled.

Loyalty Points

I earned 2.5% in Best Buy Rewards (Elite plus!).  That's $7.50

Fulfillment by Amazon Fees

I sold my first one on November 26th for $429.99 with fees of $41.40.  Not terrible.  It took almost two months but I think that was worth it.

I tried $450 for a while (10% off New prices) but no bites at all.

The problem is that I didn't get my next sale until this week (curiously I got 2 on the same morning to different people).  Both sold for $424.99 with fees of $41.  That's a full 5 months after I bought them!  No beuno for the ROI.  Shipping fees were about $4-$5 per projectors (projectors are large.  Let's call it $5.

In between Amazon cut the price for new which forced me to cut my price to try and sell. Thankfully I didn't sell any since Amazon brought their price back up.

The Haul  

I paid $320.99 and I earned ~$380.50 per unit after fees and shipping on average for the three.   This doesn't include 4 months of storage fees for 2 of the units which I'm not sure exactly how much they were.

That's actually about 18% ROI (~$60 on investment of $321).  Not too bad for a quick seller.  A little low for something that took 5 months/

Here is how the numbers work
Cash = ~$60
Credit Card Points = $6.40 from Discover per unit (worth a minimum of $6.40 but can be worth more if used for gift cards)
Portal Points = $30 per unit from Discover ( worth a minimum of $30 but can be worth more if used for gift cards)
Loyalty points = $7.50 (worth less than $7.50 since you won't earn credit card points, shopping portals or new rewards on the portion paid with Best buy Rewards but it is free from tax)

If you include all the extra, it comes out to $103.90 per unit or 32%.  Not too shabby!

The lesson for me is that items that are being as "Like New" take a lot longer to sell than items that are new.  This is intuitive but important.  If you are going to sell as "Like New", you better be getting a good enough return or you will be sitting on product for a while that doesn't even benefit you much.

Always, always, always, add the item to your inventory before purchasing so that you can see in what conditions you are allowed to sell the item.  The worst is when you already bought and then you find out later that you can only sell as "Like New."  That's a return to the original store if it is possible.