One of the most important parts of running my business is managing cash flow. This is a temporary problem for me, as one day I fully intend on achieving the ranks of the independently wealthy, and once I do my cash will simply FLOW like the river Amazon.
Until then, however, I got the present to worry about, and my current business growth. Which means I need more PROFIT!
To attain more profit I need to employ many tricks.
And one of the tricks I want to talk about right now is stacking.
There are three main components of a successful sale.
1. Finding an item
2. Buying the item
3. Selling the item
Seems pretty straightforward. Easy, almost.
I mean, come on, to get from #1 to #3 all you need is to go number 2.
Shit, that came out wrong.
Wait. I crapped the bed on that one.
Ok, you get the idea.
But before we drop deuce, we will do a slight recap on the first and the third.
##1. Finding the item
There are a tremendous amount of resources available in order to find profitable items. Ranging from software like OAX or TA (currently the doors for TA are closed, but if you sign up here we will let you know once they reopen), or using the basics like Keepa for example.
So there are a bunch of ways to find items. So find them.
##3. Sell the item
I mean……..I personally sell on Craigslist, Facebook, eBay, Etsy, Mercari, Offerup, Shopify, and……most likely the reason you are even reading this far…….
So basically this step is easy, and really requires an Amazon.com seller account.
Now for the fun stuff.
##2. Buying the item.
This is where it gets exciting!
Anywhere there are buyer rewards and perks, there are resellers using them to gain an advantage. Any trick to lower a “cost of goods sold” is a trick worth knowing.
Some can argue there is a blurry ethical line, and that may be true. However, cash back sites explicitly prohibit purchases for resale, and Kohls and Target are reseller-unfriendly, so if you shop thru ebates or topcashback or at a store that is anti-reseller, well, you already exist in the blur. So you may as well perfect the model.
There is no hard and fast rule to stacking, as every rewards program and plan is different. Learning the ins and outs is where the profit can be maximized.
Here is a solid example from a purchase I made this week.
I found an item at sears.com for 39.99. It was selling on Amazon.com for 119.99, after fees bringing me 57.74 profit. Which is a margin of 48.12%, and an ROI of 144.38%. So these are solid numbers, and I would never complain about them!
Let’s look at this two ways. First, I buy 5 units, as is, at 39.99 each. This brings me back $57.74 profit each, which is pretty good in and of itself.
Now, using some of the simple stacking skills learned through FBA buying over the last few years, I first go to raise.com and check gift cards. I quickly grabbed an 8.6% gift card, going through ebates for an additional 1% cash back (in addition I used a discover card, which I am in my first year of so I get double cash back [2.5% as a regular and it doubles in March for my last year of purchases], but I will not factor that in.
On the day I bought these, I had an email from Sears, and it was offering me 20% bonus points up to $50 in value (50k points). The max was 5 so I bought my 5, and it gives me the 2k points for spending the $199.95, and then 37,991 more points for the remainder of my spend. So for this transaction I got a total of 39,991 points, which is equal to $39.99 dollars in real money.
Next, when I checked out, I went through ebates, which at the time was 10%. On a 199.95 purchase, that is $19.95.
Let’s put it all together and see what happens…..
Ebates on Sears purchase = 10% of 199.95 = 19.95
Shop your way points = 39.99
Raise discount = 8.6% of 199.95 = 17.19
Ebates on Raise purchase = 1% of 199.95 = 1.99
None of those things are special to me, there are no secret skills. It is simple math, being aware of cash back sites and rates, and specifically knowing the rewards programs, which anyone can figure out.
Back to the example.
Just like that, with a few minutes of mathematics and mouse clicking, I raise the already good margins from 48% to 61%. Better still though, the ROI goes from 144% to over 300%!
Wouldn’t you love a quick raise of 13% profit to everything you are selling, or to more than triple every dollar you spend?
It would be like a super duper Lego party!
So thats the basics of stacking. If you aren’t already doing it, you need to be.
Anywhere with a points program, rewards program, Kohl’s cash program, etc, leaves itself to being exploited by a crafty reseller such as yourself.
Mike wrote a great one about exactly how he lowered his Walgreens cost dramatically.
And from Sourcingsimplifiers.com Assad Siddiq made this video and it shows some great tips for stacking as well.
With that, I am going back to run some more scans and find some more stacking opportunities.