Amazon Trade In Program: Hack For Getting AZ Gift Cards For Amazon FBA Sourcing September 24, 2017 admin Sometimes you don’t have to sell stuff to “make” money and in this post I want to show some techniques to use when you know something has value but are at loss to capitalize on it. You can actually buy used stuff on Amazon. Primarily people know about books, but you can also get CD, DVDs, games, electronics and a whole bunch of other things ( nothing like Health and Beauty, Grocery, etc though) Pro tip: If you are a RA sourcer, when you see beat up boxes, don’t automatically assume it is unsellable and not scan it. Check to see if it can be sold as used. With that tip you might ask why bother with anything else that I am going to say next. Well, that is somewhat true but not always ( and there are reasons I will cover later) Amazon Trade In Program Amazon has a trade in program that gives Amazon credit ( just like gift cards). It shows up on certain product listings and says something like “ Trade in for $68.21 credit” . They give you a free shipping label and will ship it back for free if they test if and it doesn’t work/meet requirements. Generally you get immediate credit to spend on Amazon ( of course if they don’t accept it, they will charge that back to you credit card) So far, so good. Now the catch is that the UPC/ISBN needs to match up exactly. So you are going to need stuff with the original box/package. Also they have a warehouse that test this stuff and sometimes they don’t get it right ( I have a Tivo that they said didn’t work and it worked when I plugged it in it worked just fine) The trade in price is usually way less than the Used Amazon price or eBay price. ( once again, why bother with this then? ) Why Trade In To Amazon Instead Of Selling? So if I can sell it for more, why would I bother with trading it in? First, electronics, games, etc are the place where the scammers live and play. They know that they can order your product, take out the good one and replace it with their broken on, return it and Amazon or eBay will side with them 99% of the time. So selling these type of items are somewhat dangerous to your bottom line when you have no control of refunds. Second ( and I am not a tax guy or lawyer so this is not advice) but Amazon doesn’t send out 1099s ( you should always report any income on your taxes). I am not sure if gift card credits are considered income in the tax laws. So let’s have an example. Say you can sell something for $140 used and after fees, you clear $100. Now say that you can trade it in for $90. Which is better? Well most people will say that $100 is better than $90 but say that you pay 20% taxes on your income. Now the $100 is actually $80. Now which is greater? Take this a step farther, and say that you return $120 after fees and after taxes you clear about $100. Now the $100 is greater than the $80, which is true, but now you have to consider the risk. Say this is my Tivo and some guy has a Tivo and it is broke. He orders mine and does the swap out and gets a refund from Amazon. Now I am out say the $25 I spent for the Tivo and am at a loss now. Now if I had traded the Tivo in and gotten $80 and the same guy buys the Tivo and does the swap out, that is Amazon problem and not mine. So is the $20 difference in the trade in vs. the selling used worth it? Third, some items that I can’t sell on Amazon ( DVDs, CD) will actually trade in for more on Amazon than they sell for on eBay. When I am at library book sales, I look through the DVDs specifically to trade into Amazon ( most other sellers skip these because they can’t sell DVDs) Fourth and finally the biggest thing is that there is sort of an arbitrage opportunity with Amazon gift cards ( credit) that you can use if you are doing Amazon to Amazon flips ( AZ to AZ). Disclaimer: These techniques aren’t for million dollar a year sellers, but more for part time, small time, cash strapped, etc seller. Let’s go back to my example of the Tivo player. You can buy it for $25 at Walmart but the box is beat up and shelf worn, so you can’t sell it for $249 FBA New, but can sell it for $140 used like- new. Now you have the option to sell it or trade it in for $80. If you sell it, you might make $100 after fees but A) have to worry about if it will be returned ( mine was) B) The price may drop C) You don’t know if/how long before it will sell. Figure a week at least to get it into the warehouse and then if it sells that day, up to 2 weeks before you get paid. Overall, probably at least 3 weeks to get $100. Now if you trade it in, you will have the $80 credit today to spend on AZ to AZ flips. So you forfeit $20 to avoid the risk and to get your profit today. ( not taking into account the tax due on the proceeds) Will you be able to make more than the $20 in the next 3 weeks from your AZ to AZ flips with the $80 you have? Repeatable? So the guy with only $25 to his name could actually get some traction when he found the beat up box Tivo that all the other resellers past up on, but that is a one off and probably not repeatable, is it? Well maybe, maybe not. It works great for that stuff you find at the thrift stores that you probably shouldn’t be selling as new ( pro tip: you better only source products from places that have UPC codes on the receipts/invoices and that is considered “new”) Actually thrift store is a great place to use this technique to buy something for $7 and trade in for $70 like I did with this video game steering wheel. But how can you or I do this more consistently ? Well go to the biggest thrift store in the world: eBay! Actually there is a little bit we need to look at first. (There is a video below that explains this a lot better) If you look at the the discount gift card sites, Amazon cards usually only get about 1% discount. Honestly that is hardly worth the effort to go there and buy the cards if you are just spending a few hundred dollars or less. So the game plan is this. We look for items that we can buy on eBay and trade in for more on Amazon to get the equivalent of a discounted Amazon gift card. So here is a simple example: You have $100 to source with and want to do some AZ to AZ flips, but instead you source from eBay and do the trade in with Amazon to have more than $100. So you buy some DVDs from eBay. They are brand new, have a UPC code that is easy to confirm matches up with the required AZ UPC and then you do the trade in and have more money to do the AZ to AZ flips. We buy 3 sets of DVD complete TV series for $100 and the trade in value is $120. At first the $20 doesn’t sound like a lot for the hassel but let’s do the math. If you take the $100 and divide it by the $120 ( 100/120= .83) you get 83, which means you are getting a 17% discounted Amazon gift card, But wait, you go through eBates and get 2% cash back from the $100 you spent. So you are getting close to 19% bump on the products that you source on Amazon to do the flip. So if you have a flip that would pay 30% and add the 19%, you are looking at 50% flip. So it really can be looked at it as a way to bump up our ROI or in more simple terms, it allows you to buy more and make a little more. The end result is more money in your pocket. You “made” $20 extra and then made the 30% ( $6) on the flip so you actually made $26. I know this doesn’t sound like a ton of money, but over the course of a year it can be a lot of extra money. If you are trying to build a bankroll, after the first cycle without using this technique you would have $130 ( $100 plus the $30 profit) . Using this technique, you would have $156. ( $100 plus the $30 plus the $26) After several cycles, the 2 examples will really start to separate as the “extra” starts to earn more and more. So How Do I Find These? Nothing special is needed to find these. You look through eBay, have the AZ Trade In page open and do copy and paste of UPC/ISBN. Do this over and over until you find items that trade in for more than they cost Now I am lazy and have a Chrome extension (eBay To Amazon Trade In) that sort of make this easier and I show how to do this ( and give a few more tips) in this video.