My foray into retail arbitrage

Things have changed significantly since the heyday of my gift card-churning adventures. As a result, I’ve focused more on retail arbitrage to earn points, miles, and a bit of cash back. It’s been fun, at times stressful, but generally rewarding.

I’m far from an expert on retail arbitrage, but I figured you might enjoy hearing about my experiences so far. Maybe I’ll make this a weekly post – we’ll see how far this goes! In the meantime, here’s a look at my recent foray into retail arbitrage:

How I got into retail arbitrage

My friend Jon from No Mas Coach sparked my interest in retail arbitrage. He’s had success selling a specific product on FBA, inspiring me to find my own. Amazon FBA is incredibly confusing to set up and challenging to work with. My Amazon seller account got banned about a decade ago, creating an obvious barrier to entry. But seeing how lucrative it could be, I emailed Amazon, pleading my case, and got my account unblocked.

The next step was to find a product I could resell. I didn’t want to step on Jon’s toes, so I searched for a different product. I followed a tip from Flip4Miles: head to the Nordstrom Rack website, find a product on clearance, and use the SellerAmp tool to determine if it’s a good FBA flip. Sure enough, I found a popular product at a significant discount. I bought ten units and got ungated for the brand.

My products arrived a few days later and I shipped them to Amazon for processing. After a few weeks, Amazon confirmed receipt and soon after, the entire batch sold out. I earned $500 profit and around 2800 points. It was time to scale up.

Note: As a SellerAmp affiliate, I may get a commission if you sign up with my link.

How I scaled up

My main objective was finding a product that would earn lots of shopping portal rewards. I started with the AAdvantage Shopping site because it offers both redeemable miles and Loyalty Points, which count towards elite status. So I headed to the “Top Stores” section to search for retailers offering the highest rewards. I found one offering 12X points while running a 70% off sale. I found a few products, checked their popularity on SellerAmp and Poshmark, and placed an order.

After clicking through the AAdvantage shopping portal, I paid for the first batch with my World of Hyatt Card. The total was $1,667.

Next, I checked Nordstrom Rack to see if I could replenish my stock of the original items I purchased, which had sold quickly on FBA. While they no longer had them in stock, I found a good alternative. I placed a $1,000 order using Nordstrom gift cards purchased from Staples with my Ink Business Cash® Credit Card (earning 5X points). Rakuten offered 2X points at Nordstrom Rack, helping me earn 7X points on this order.

Note: If you use my Rakuten referral link to join and spend $30 within 30 days, you’ll get an extra $30 plus 10% cash back during the first seven days. I’ll also get a $30 bonus. You can convert your Rakuten cash back account to one that earns Amex Membership Rewards instead.

How many points I earned

In total, I earned 28,667 points from spending around $2,667. That’s a solid return, considering I’ll also earn a 25-30% profit and make progress towards AAdvantage and Hyatt elite status. In the long run, I’ll get more value from the hotel and Airline elite status perks than from the points. Let’s face it: With constant devaluations and limited award inventory, booking premium cabin flights is getting more difficult.

• 13,362 AAdvantage miles and Loyalty Points
• 5,000 Chase Ultimate Rewards points
• 2,000 Amex Membership Rewards points
• 1,667 Hyatt points

How I’m unloading the merchandise

I listed the products on Poshmark and they’ve been selling great so far. In a couple of weeks, I should be able to recoup what I spent. I opted out of Amazon FBA because I had an issue with my last shipment. I sent them around $1,000 worth of products and they claimed one of the boxes was empty and the other contained just one item.

I’ve filed an insurance claim, so hopefully, it will be resolved soon. But I want you all to know that issues like this can happen when you use Amazon FBA. I recommend taking photos of the boxes before shipping and purchasing additional insurance if necessary. From now on, I will probably just use Poshmark for product sales since I can sell everything right away. Amazon takes weeks to process shipments, meaning your first sale might be a long way off.

Bottom line

Problems aside, I’m enjoying retail arbitrage. It’s fun searching for the right products, determining their sales potential and finding ways to earn more rewards from those purchases. While Amazon FBA was convenient because I only had to make one UPS store run, the disappearing merchandise was not fun to deal with. Thus, I’m happy to sell my current inventory on Poshmark. I can list and get paid much faster than I ever did with FBA.

Have you guys dabbled in retail arbitrage? What are some tips you’re willing to share with newbies?