Good morning! Today Stephen will explain how he make money flipping phones. Let me know if you would like to guest post on MMYW.
Stephen, is a financial analyst by day, and flips used cell phones by night. He also run a blog called CellSolo where he educates readers about buying and selling used cell phones. You can follow him on the CellSolo facebook page.
There are hundreds of ways to make an extra income outside of your 9 to 5 job, and I’ve tried a handful of them. One of the more successful strategies I’ve used is buying and then reselling used cell phones. I never would have thought buying and selling phones could amount to a worthy side income, but to my surprise, it has become a side hustle where hard work has paid off nicely. Buying and selling used phones share a similar principle to many other marketplaces, buy low and sell high.
In August, I flipped 21 phones at an average of $77 of profit per phone. That comes out to approximately $1,617 in my pocket for the month. At that rate, an extra $19,404 per year is a nice bonus added to my salary from working the 9 to 5 grind. However, selling phones isn’t passive income. It does require hard work and can become frustrating and overwhelming at times. My technique involves buying phones on Craigslist, and then reselling them on eBay.
Buy On Craigslist
I have tried buying used phones from a variety of sources and have found Craigslist to be the best source for two reasons. First, Craigslist is one of the top marketplaces that has the most used phones for sale compared to its competitors. The larger the supply, the better the deals are. Second, almost everyone is willing to negotiate. Even the people who specifically say that they won’t come down in price WILL settle once you show they you can be at their door with cash in your hand in less than an hour. Craigslist is the only marketplace I have been able to consistently buy used phones for less than they’re actually worth.
The key to getting great deals on Craigslist is searching in a populated region. Living close to a metropolitan area is the best way to make a lot of money from used phones. Unfortunately, if you don’t live near a city, you will struggle to flip phones at a profit. There simply isn’t enough supply to get as good of a deal if the area you live in isn’t very populated. I live in Washington DC and recently I have found more deals on iPhone 5’s than I know what to do with. Yes, this is in part due to the new iPhone 5s release, but it is mostly due to the condensed population.
I only buy the newest and most popular used phones that retain the most value. Nobody is going to want to buy a Nextel flip phone from ten years ago. iPhones are easy to resell, and make my life easier because I can sell them very quickly. I keep a list of the most popular phones and use this list when searching for great deals on Craigslist. When I’m searching for a phone on Craigslist I always have a target price that I am willing to pay. To figure out a target price, I browse eBay’s auctions that are about end for the exact phone model I am going to buy. This is how I determine what a phone is worth. If it is selling for $400 on eBay, then that is how buyers value it.
My goal is to buy a phone on Craigslist for $100 less than what it is selling for on eBay. The highest I am willing to pay is $50 less than what it is selling for on eBay. Anything less than a $50 profit margin isn’t worth my time. You’ll notice there are a lot of phones that are listed too high on Craigslist. However, don’t forget the power of negotiating. If you show the seller that you’re a serious and trustworthy buyer that can show them the money that day, you’ll get them to come down in price. There will be listings that have great photos and descriptions. These listings may be harder to bring down in price because they will have more interested buyers because of their excellent presentation. However, the sellers that have a simple one liner description will be more willing to compromise in price. Just ask them to send you some pictures in an email and to verify any questions you have.
When buying on Craigslist you must acknowledge there is some risk. There are scammers out there; in fact I’ve come across a fair share of fraud. Every cell phone has an ESN, IMEI, or MEID number which is the serial number for the phone. I always request this information from the seller through email before buying the phone. You can check the number online or through the phone’s service provider to confirm that the phone hasn’t been stolen. You’ll also want to confirm with the seller and then inspect yourself that the phone is in good condition and works. If possible, I try to arrange to meet the seller at the phone’s wireless service store and verify everything with an employee. I know it sounds strange, but the employees at all of the stores (Verizon, AT&T, T-Mobile, Sprint, etc.) have no problem checking a phone from you that you are buying from someone else. And lastly, make sure you exchange the cash for the phone in a public place. Local shopping malls or fast food restaurants are great examples of places I sometimes meet. Only pay in cash and only meet in person to exchange. Don’t fall for the tricks that ask you to wire money.
Sell On Ebay
When you sell the phone on eBay, you want to use a seller account that already has an established and great feedback rating. The better your feedback rating, the more buyers you will attract. Make sure to include several details and photos in your description. Make your product marketable. Clean the phone up and take great pictures. Think about it like detailing your phone, just like a salesman does with his used cars. I’ve had success with both auctions and the Buy It Now feature.
There is also risk when selling on eBay. In your listing, you should request that only buyers who have positive feedback bid on your phone. Also, make sure your photos clearly shows any distinguishing marks on the phone so the buyer can’t claim that you didn’t tell them about any scratches or scuffs beforehand. Take a photo of the serial number for your own records. I recommend that you only accept PayPal so that you can qualify for seller protection. When you ship the phone, make sure you only send it to the buyer’s verified PayPal address and pay the post office the extra fee for insurance and signature upon delivery. You don’t want to have to worry about your phone being lost in the mail.
Give It A Shot
If you’re looking for a side hustle gig, why not try selling used phones. Simply check out their value on eBay and see what you can get on Craigslist. Worst comes to worst, you don’t have to go through with the Craigslist buy if you can’t get great value. Don’t forget, selling phones require hard work. I spend a lot of time on email back and forth with Craigslist sellers trying to get the price down. I also spend a lot of time driving around picking up phones. Also, there are eBay and PayPal fees when selling a phone, so become familiar with those so you can account for them when determining your profit margins. Have fun, and be careful out there!
Have you ever tried to flip a phone?