Reselling for Points and Miles

February 20, 2015
/ Reselling
/ 3 COMMENTS

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Reselling can be a very lucrative hobby to get into, so much so that many people do it for a living. I’m not one of those people, but I like to use reselling as a complement to my manufactured spending. In fact, reselling has become one of my most lucrative methods of obtaining massive amounts of points and miles.

How is that possible? It’s simple really. The idea of reselling is to buy products cheap enough to be sold at a profit. If you do that, you’ll make money. If you add in portals, credit cards, and gift cards in the mix, you’re guaranteed to profit handsomely in cash and points/miles. In fact, even if you sell the items *at a bit of a loss, there’s a good chance you can basically buy points and miles at a very cheap rate.

*That post is password protected, but you can access it by signing up for my newsletter.

Portal Bonuses

If profit from reselling is the cake, the credit card points are the frosting, and the portal bonus is the cherry on top. By that I mean, profit is the reason for reselling (most of the time), credit card points are a bonus (even if they’re earned at 1X), and the portal bonuses are what really make the ~~cake~~ reselling ~~delicious~~ lucrative for points enthusiasts.

Portals often run promotions around holidays and other parts of the years, where you can earn 10-20X points per dollar spent on top of any credit card rewards. That is a very quick way to build a large stash of points! Let’s look at some examples…

Example 1: 15% profit after fees

Item Cost – $100
Portal Bonus – 10X
Credit Card Bonus – 1X

Total Profit: +$15
Total Points: +1,100

This would be the best case scenario, since you profit both in cash and points, however, that’s not always the case. Occasionally, something changes (e.g. price, demand) and you end up losing money.

Example 2: -5% profit after fees

Item Cost – $100
Portal Bonus – 10X
Credit Card Bonus – 1X

Total Profit: -$5
Total Points: +1,100
Cost Per Point: 0.5 cents

As you can see in this scenario, $5 is lost on the deal, however, that doesn’t necessarily make this unprofitable. It just makes you pay for the points, but at 0.5 cents each, that’s a great price!

Credit Cards

Obviously, if you’re on this blog, chances are you use credit cards to pay for pretty much everything. Why would resale items be different? Using a credit card not only earns you points, it also protects you if you find a lower price, the item breaks, or you want to return it after the return window has closed.

Using credit cards to buy actual product is one way to earn points, but occasionally portals will allow you to earn points on gift cards also. That’s where reselling gets really interesting!

Say a portal is offering 9X points on all purchases at a merchant. If you go through that portal with a 1X card and buy a $100 gift card, you’ll earn 1,000 points. If you then go through that portal again to use that gift card to purchase a $100 item, you’ll earn a total of 1,900 points! That’s a crazy good deal. In fact, that’s exactly how I earned my companion pass.

You do need to make sure that the portal terms do not explicitly exclude gift card purchases, before buying them, otherwise you may miss out on points. The only downside to this method is that you miss out on the credit card protections I mentioned above, but if you’re reselling the item anyway, that may not matter.

Minimum Spending Requirements

Using portals for reselling is a great way to earn points and miles, as you’ve seen, but portals aren’t the only way to do that. If you have a card that you have yet to hit the minimum spending requirement on, reselling might be the way to go. It not only adds a bit of diversity to your credit card spend, but it also adds a new utility to your manufactured spending toolkit.

How to Start

If you’re new to reselling or you would like to learn more about the process and the pros and cons, check out the links below. I wrote most of them last summer, but they’re all very much still applicable today.