We’re not even at the end of February yet, but 2016 has already been a very tough year for Manufactured Spending. My favorite tool to MS was Bluebird, but that’s not worthwhile anymore after account closures. We’ve heard of Citi credit card accounts being shut down, Chase becoming more restrictive for those who apply for credit cards regularly, Simon Mall gift cards being coded as cash advances, and Tahsir even got a visit from an IRS Agent at a Walmart for the large volume of money orders he was buying.
To me, this highlights how fragile our current/prior state of manufactured spending is/was. We were so reliant on a small amount of tools and techniques that as soon as those went away, it left people paralyzed and many with thousands in gift cards that they couldn’t easily liquidate. If you ever heard Tahsir speak at a TravelCon or FTU event, you’ll know that one of his topics was something to the effect of “Think Beyond Walmart” because one avenue simply isn’t enough.
But…the past is in the past. We’re here, and we need to figure out how to move forward. So, what’s the best way to manufacture spend today? Undoubtedly many of you assumed that my answer would be money orders. After all, Walmart still accepts certain gift cards and money orders are sold at a myriad of other stores as well. Money orders are definitely the most discussed way and the path of least resistance as of today. But is it sustainable? Nope, no more than Bluebird was. Or even Vanilla Visas at Walmart. With a simple software update from Walmart, all registers can easily be coded to not accept gift cards. Then we’ll be back here having the same conversation.
I think the most sustainable, and indeed the best way, to manufacture spend today and in the future is more along the lines of reselling. Raise your hand if you just said “Ugh, too much work. Too complicated. Not worth it.” How many of you said that the first time a friend told you about buying/liquidating gift cards and how to search for award space?
I said “along the lines of reselling” because there’s much more to consider. There are many people who just buy iPads or whatever when they come on sale, then sell them immediately for a small loss so they can take the points, and hopefully at the end of the transaction they come out on top. Great, that’s wonderful. If you can make that work, that’s fantastic. But again, remember that to do this most people still spend some money (the loss on the sale of their product), and more importantly time, in many cases. This method can be useful to get a big prize like the Southwest Companion Pass for a discount, but how much money and time are you willing to lose over those points?
I suggest that a better strategy is to start your own business. Many of you will stop reading here, and that’s fine. You can go ahead and keep doing your money orders for however long that lasts and continue searching for more prepaid cards or the next Vanilla Reload-like item. But if you want to be in this for the long-haul, earn points consistently, and NOT lose money, you’d be doing yourself a favor by spending more time to make a proper business.
I think the best resellers, or at least the ones that have the most experience, will tell you that you shouldn’t just be in it for the points; they’ll say you should be in it for points AND profit. It’s simply not worth it to spend your time and tie up your money for a month or more just to come up with 10,000 points and be down $75, even if that is a good price for those points.
It’s much more reasonable, sustainable, and just plain better for you if you can create a business where you buy and sell to make money…and then get points as a bonus. And you’re all probably thinking “Well duh, that’s OBVIOUS. Tell me how!” If it were that easy, everyone would have a business (and if you have a Chase Ink account, you already should).
Many of you dove head first into the world of miles and points, then quickly learned about manufactured spending. How much time did you spend reading blogs, FlyerTalk, other forums, and maybe even Reddit? How many hours did you spend with trial and error at CVS, Office Depot, Staples, Walmart? Take all those hours and instead imagine if you spent all that time on learning how to buy and sell items for profit. Just Googling the phrase “how to buy and sell items for profit” returns results that will point you in the right direction.
Just as there are blogs like this on how to use miles/points to travel better and cheaper, there are tons devoted to buying and selling products for profit. And your main goal should absolutely be PROFIT, as in actually money, as opposed to the miles/points. Why? Because cash is king. Sure, you pay for that Emirates First Class flight in cash because it costs $30K, but use the money you made from your business to buy Alaska Airlines miles on the “black market” (yes, points/miles brokers exist) or even directly from Alaska Airlines at 2 cents each.
And don’t get fixated on buying and selling itself – I’m using it as an example since it’s the easiest to visualize. One person I know decided to use his knowledge of travel to sell himself as a sort of travel agent to a small business owner that has several employees that travel regularly. Without being on that company’s payroll, he became their unofficial travel agent to book all their flights (which happened to be in business class). He charges between 5%-10% above the retail price of those flights (yes, the same ones you can find by searching on Orbitz or Kayak), and buys them on his own credit card to be reimbursed later. What person/company is stupid enough to do that? There are SO MANY people out there that have more money than time and are willing to pay for that service. Find those people!
My point is this: if you find yourself shut out right now because of recent account closures and are cautious or unsure about money orders, then it’s time to refocus. Your new goal should be to make money, ideally by purchasing products with your credit card and selling them for profit, and doing it in the least amount of time and with the highest volume possible. Start learning everything Amazon, eBay, and Alibaba. Start researching the best products to buy on sale and which items sell the fastest. Start looking into how you can buy things at wholesale prices and how you can ship them with minimal effort. Start talking to business owners and ask about their travel arrangements, or how they get their products/materials, then find a way to insert yourself with a benefit to their company (usually a time savings).
There’s a lot to learn, but I’d say it will take no more time than learning how to earn and use miles/points and physically going out to manufacture spend. At least with this method, you’ll be safe from shut downs or having to physically visit a Walmart.