We are now more than 2 weeks into the AMEX $20,000 reselling challenge. The challenge is to spend $20,000 on the American Express Platinum card within 90 days for the greatest amount of profit and the least amount of effort/time. The full sign up bonus of 150,000 Membership Rewards Points is earned when you spend $20,000 in 90 days.
Some challengers are trying to accomplish the spending exclusively through gift card buying and reselling and others, like myself, are trying to exclusively resell physical merchandise.
Reality Check
No one has to do exclusively do either one. You are limited only by your credit card limit, float, available time, risk aversion and your ability to find deals.
The fact is that I resell both gift cards and merchandise, whatever is a better value at the time. Check out Doctor of Credit on current eBay deals.
Some people are better at reselling: Check out Chasing the Points who was able to buy $15,000 of gift cards in less than 30 minutes. Money Metagame was able to earn a 9% profit on his gift card churning already! Miles Per Day earned hundreds of thousands of points just in April alone via reselling merchandise and shows how to kill it on your own stacking multiple layers of savings together.
I'm super impressed with what everyone else is able to accomplish in their spaces.
A Symbiotic Relationship
The reality is that resellers of gift cards and merchandise do better when both exist. How your ask? Well, I'll be happy to tell you.
Here is an example for illustration purposes:
Recently, eBay started selling Target Gift Cards. eBay is a great place to buy gift cards because of eBay bucks, discounted eBay gift cards and possible 5x on Chase Ink for some sellers. In anticipation, there was a big sale on Target gift cards at Cardcash.com. That was followed by Raise slashing their prices as well. Money Metagame pointed out that this was a possible opportunity to buy Target gift cards and resell, but he cautioned against this because of the number of people who might be doing the same. Sure enough, the gift card resellers lowered the price at which they will buy Target gift cards and if you bought and didn't resell right away you were out some money.
This is an obvious point, but I'll say it anyways. There needs to be demand for the gift cards in order for gift card resellers to make money.
That's where merchandise resellers come in. Almost all of my profitable reselling is through buying the merchandise with discount gift cards. Staples is exceptional because of the Chase Ink, but I bought some this morning at 10% off (over 12% off if you include the cashback from buying AMEX gift cards)! I can sometimes save 10-15% off. That's a big deal for margins. I've bought thousands of dollars of Walmart and Bed Bath and Beyond gift cards recently. I can't find enough of them at the prices I'd like to pay, but every day I find a couple to buy. Merchandise resellers keep the demand higher for gift cards. This keeps the prices higher for the gift card resellers.
Merchandise resellers clearly need gift card resellers, otherwise their profit margins would erode. Chasing the Points just sent $16,000 of gift cards to Gift Card Zen and Cardpool last week. Thank you for keeping me stocked ;)
I don't mean to say that the majority of the gift card reselling market is due to gift card churners and merchandise resellers. It's clearly a small percentage. That being said, we only help each other out.
Do what's comfortable for you and what you're good at. Keep learning and optimizing your methods!
In separate news: I will not be updating anything from tonight until Monday night. Happy Shavuot everyone!
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