eBay Trade Secret #2 - tnolan0816

General
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Last week I mentioned using a personal credit card to pay for eBay fees and immediately paying the card off each week to leverage CC rewards versus just using paypal funds. This week, here is the card that I use to accomplish this:

*****DISCLAIMER - IF YOU ARE YOUNG, OR NOT MATURE ENOUGH OR DISCIPLINED ENOUGH TO PAY OFF YOUR CARD EACH WEEK…THIS TIP IS NOT FOR YOU!!! YOU WILL SPEND MORE IN INTEREST THAN YOU EARN IN REWARDS POINTS IF YOU DO NOT PAY OFF THE CARD IMMEDIATELY******

I use the Fidelity Investment Rewards Visa Card. (Yes I know there are others out there that are similar or are even slightly better, depending on personal circumstances, but this one works for my circumstances.)

www.fidelity.com/cash-management/visa-signature-card

(Notice it IS NOT a referral link. I get nothing from advertising this.)

The fidelity investment rewards visa card provides me 2% cash back into any eligible Fidelity Investment Account. This includes all brokerage accounts and Roth/Traditional IRA’s.

To put 2% into perspective, if I buy and sell 1M in inventory over the year at cost and only try to break even, the 2% will net me $20,000 for the year. - The law of large numbers is fantastic!

So, what do I do? I buy things on ebay and link my paypal with the Fidelity Investment Rewards Visa card to it and I make ALL my purchases with it. I also pay ALL my eBay fees with my credit card, effectively reducing my fees I pay by ~1-2% (to the math nerds, yes I know this isn’t 100% accurate because I’m only earning 2% on my spend of ebay fees of 8% assuming Top Rated Seller Status).

How do you pay for your eBay fees with a credit card? Follow these steps:

  1. Log into eBay and go to your Seller Hub.

  2. Scroll down to the bottom of the page and look for the section called “Account Summary”. Your fees will be located here. Click the “>” to the right of the “Account Summary” header.

  3. Scroll down to the bottom and click the hyperlink “one-time payment” in the phrase “You can make a one-time payment using PayPal or another payment method.”

  4. The next page that will pop up will try to convert you to pay via Paypal… DO NOT DO THIS!!! Look towards the bottom and click the hyperlink called “Pay with your credit card” under the “Or choose another payment method:” section. (You may have to log-in again to proceed).

  5. Enter your card details and make a payment with your CC, or if you have previously paid via CC before, enter your 3 digit CVV code and click “Continue” to process a payment on your card.

That’s it! Keep doing this and earn points that you can redeem into your brokerage or IRA accounts. In utilizing this strategy, one can personally leverage points into a ROTH IRA for themselves and their spouse so as to effectively (and legally) contribute tax exempt (IRS Write-Off of eBay fees that is a deductible expense of conducting business) into a Roth IRA that will provide tax exempt gains at the 66-1/2% or whatever year your old ass can start withdrawing from it…

So, I’m curious… what other options are people using? Better? Worse? How do we all improve?

Stay tuned for the next trade secret to be revealed on Saturday 5 May!

If you like these posts, be sure to like them so I know to continue creating them!

Thanks!

Tim

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I’m not high volume by any means so I can’t speak exactly to how much this makes sense (nor will I be actually doing this) but this sounds like a very good idea. Thanks for coming here and sharing your secrets… I’d love to hear more lol.

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Yeah, I understand. However does your decision making process or operating paradigm change at all when you change the way you think and try to simply break even versus turn a profit? The way I view things, is that if I am willing to pay a price for something, there HAS to be one person in the 6 billion people on earth that will be willing to pay the same amount because they see the same value as I do. With that being said, if I can flip something and simply break even, I turn a profit later on when I redeem my rewards points.

1M = $20k profit at 2%.

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Yes, this is the best way to accumulate savings/returns anytime you purchase something. Use a credit card with 2% cash back or higher and pay off the card in full by cycle due date.

However you could be doubling this with another 2% or more. Here’s how

You’ll want to add in a rewards site. Stick to the big ones who actually pay out. Swagbucks, Ebates, or FatWallet have the most reasonable % back and will always pay you. DO NOT get tempted by no names or start ups who offer 10% cash back. You will get burned and will not get paid out.

You can choose to convert to cash through paypal or convert to giftcards.

Also if you are looking to sign up for a cc. Some cards have huge sign up incentives. A few years back discover was giving 5% cash back during the first 12 months on ALL purchases. They then DOUBLED it at the end of 12 months and sent a check. SO total 10% which is insane.

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I can only imagine… Couple this with eBay Bucks promos and you could reach 18-20% cash back… Thanks for the tip!

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You can still use the discover 5%, after the 12 month period, use the revolving categories by buying at a store that sells eBay gift cards. My local gas station, and grocery store sell eBay gift cards which counts to the 5%. You can see which store sell gift cards here: pages.ebay.com/giftcard/retail.html. Unfortunalty, eBay limits the amount of gift cards you can use to $1,000 per purchase, and $1,500 per month.

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@tnols Thanks for your tips, I hope you keep them coming!

One thing I’d like to point out, is that in order to break even flipping on eBay after fees you need to sell items for 15% more than you bought them for. Say you bought an item for $100, you need to sell it for $115 to get your $100 back.

A simple calculation would be: $115 - ($115 * 13%) = $100.05.

This could also be more complicated if you’re selling higher priced items, are paying the $25/mo for an eBay store, and are thus capped on the sellers fee.

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While this is obvious to most people, it’s good that you mention it. People also generally don’t like to pay for shipping so you have to factor in that cost as well if you’re going to offer free shipping. And then if you deal high volume, you also pay taxes on your profit.

Sellers all understand this for the most part, but it’s important to really do your homework so you don’t end up overpaying when you’re buying. I always laugh when I hear people saying dealers lowball, but they just don’t seem to understand that if they buy a card from you for $100 and sell it for $150 they do NOT make 50% profit… They’re looking at maybe 25% and if it doesn’t sell in a certain time frame, they’ll just discount it and probably break even.

Obviously, higher end items are a different story. I’d never accept $0.70 on the dollar, but for everything else I would consider it a fair offer. For extremely low value items($5 or less), I would be happy to take $0.50.

I’m not a dealer, but I understand both sides fairly well tbh. I intended to actually flip a little bit to fund my collecting goals but shipping is way too expensive in Canada.

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