How Amazon paid me to collect miles

Last month Nordstrom ran a promotion in the British Airways shopping portal in which they gave 36 miles per dollar to people who signed up for the promotion and made their first ever BA shopping portal purchase, and made that purchase through Nordstrom.

As I reported earlier, I bought approximately $4000 worth of merchandise with the intent to sell it for as little loss as possible.  The difference between how much I spent and how much I got back from reselling was my cost.  In order for this to be a good deal, I wanted the cost per mile to be less than 1 cent.  Specifically, I targeted .5 cents per mile as a really good deal. 

Selling Approach

I had bought 10 watches and 7 noise cancelling headphones.  Rather than deal with trying to sell and ship all 17 items individually, I decided to use a service called “Fulfillment by Amazon”.  I signed up for a seller account and shipped all of my stuff to Amazon.  They take their usual seller fees and also charge for storage of the items.  In exchange, they handle all of the details of making each sale, and shipping the items. 

So, how did I do?

With my original pricing, I was on track to meet my target of acquiring BA miles for .5 cents each.  Truthfully, though, I became a bit impatient and put the items on sale to sell them quickly.  They all sold in one weekend and I ended up with a somewhat final tally of acquiring BA miles for .67 cents each.  It was still a very good deal and I was happy with that.  But then Amazon made a big mistake…

Amazon’s Error

Of the 10 watches I sent to Amazon, Amazon somehow sold 24 of them!  I opened a ticket with Amazon’s seller support telling them they had sold 17 of the 10 items (this was before they sold 7 more), but was told the following:

Greetings,
Having researched your account I could see that you have sent 10 units but total order shipped for this […] is 17 and I could see that all the items are shipped and the payment is already posted to your account. As all the orders has been fulfilled and there is no fulfillable quantity in your account we would not able further investigate on this issue.
You would receiving the payment for all the 17 orders.
Thank you for selling with Amazon,

No, Amazon, Thank You!

What’s Next?

I fully expect that Amazon will eventually figure out the error and come back to collect their money.  And, of course, I’ll readily return it.  It does reduce my confidence in them considerably though.  If they can accidentally pay me too much, they can just as easily accidentally pay me too little in the future.


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About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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aznprzn
Guest
aznprzn

sick man….unreal

10kJuan
Guest
10kJuan

Haha. Love it. Reminds me of another story I read on Amazon where their site was matching another site’s price for a book and selling at a LOSS once the author’s royalties were factored in. Still a work in progress I guess.

gpapadop
Guest

reading about this gives me a headache…I can not imagine me ever doing this:-)

FrequentMiler
Guest

gpapadop: 6 months ago, I would never have thought of doing this either!

Brent
Guest
Brent

Offer to return the money by having them charge your credit card -__-

Brent
Guest
Brent

I think the problem with doing this multiple times is that Amazon would issue you a 1099 after you hit a certain amount in sales.

FrequentMiler
Guest

Brent: Great idea bout the credit card. Even better, I’ll ask them to take it out of Amazon gift cards that I can buy at OfficeMax! Regarding the 1099: yes, if you do this a lot you need to be prepared to deal with this like a real business with real taxes and all. Good point!

mike
Guest
mike

I never thought of using amazon. My products on ebay, buyers have not paid me still such a hassle.
on 1099
So create a business which now allows me to apply for bus. cards and will have no problem showing my company sold products at a loss. Hmmmmm and could this be subtracted of my yearly job income????

I am no accountant.

Piecerate
Guest
Piecerate

Congratulations Frequent Miler, nice work! About the 1099 issue, how do you deal with that? It’s not quite on point but I do wonder about 1099 issues as I implement some of your exceptionally creative strategies. Particularly your post about square got me thinking. I know you considered square a fail but I have some ideas for a work around with other services and with some legitimate business use but I worry about 1099 issues. I just don’t want the scrutiny. This blog is my favorite — thanks for your mentoring.

FrequentMiler
Guest

Piecerate: Thanks for the complements! Regarding Square, last time I looked they had a rule that said they would send 1099s only if you exceed both $20K AND 200 transactions (I’m not sure I have the details exactly right, but it was something like that). So, make sure to stay under one or the other to avoid the hassle of the tax forms. Note to readers: I am NOT advocating cheating on taxes! There are situations where taxes are NOT due, but 1099s are sent anyway and this can be a major hassle for the tax payer. So, avoiding those situations makes sense.

Piecerate
Guest
Piecerate

That’s pretty much my thinking. I like the ease of processing visa gift cards myself at a reduced rate and because I am both the buyer and vendor on a card swipe I don’t really have a taxable event, but I’d rather not be in a place where I need to try and persuade anyone (IRS, Am Ex., others) of my position. Much better to stay under reporting limits and find a company that doesn’t report unless you exceed 20K. I also think it probably makes sense to use such a service sparingly and not try set up a PPM.

Greg Z
Guest
Greg Z

On the issue of Amazon issuing a 1099, wouldn’t that be a good thing? You will show your Nordstrom receipt and the amount you got for the items and show a loss! I’m no tax adviser, but seems like a win/win here.

bluto
Guest
bluto

Congrats on the windfall and thanks for blogging about it. I think most guys would have kept quiet out of concern that Amazon would discover it. Very smart move to use Amazon to sell btw.

BothofUs2
Guest
BothofUs2

Brilliant, simply brilliant. Well done FM!

Adam B
Guest
Adam B

I wanted to use Amazon for one of the Burberry bags I bought but I couldn’t find the item. No one had put it on Amazon before and if that’s the case I was told you can’t sell it. Anyone have a way around this. I think that would really help my case. Thanks.

Travel and Credit
Guest

Wow, so they REALLY over paid! Great error on your side, for now at least. I suppose it will stay like that until the seller who didn’t get paid files his ticket. Keep those fingers crossed 😉

Am I right with my math that you paid about $964.80 for about 144,000 BA miles? ($4,000 Nordstrom x 36 miles per dollar = 144k miles. Sold on Amazon at .67 each = $964.80)
Just curious.

I didn’t work this deal b/c I won’t be home for 2 months to sell anything and nothing else was catching my eye. Crazy deal though.
– David

FrequentMiler
Guest

Travel and Credit (David): Yep, you got the math right. Yes, I got ridiculously lucky here (until Amazon claws back their money).

Travel and Credit
Guest

Right on man!

al613
Guest
al613

item 368660 10x $45 FAR

Michael D
Guest
Michael D

Just to clarify, what percentage did amazon charge you as their seller referral fee?

The website says they charge anywhere from 6-25%. I imagine that will put a damper on any profit from this exercise.

Walter
Guest
Walter

This is really an inspiring post. However, when I tried to sell watches I bought during the BA promotion, I found that AMZ only let me list these watches as “like new” condition. How can I change the item condition? Is there a way to list these watches as “new”? Thanks.

FrequentMiler
Guest

Walter: Unfortunately, Amazon does have restrictions like that that are imposed by various companies. I was lucky with my watch because I was able to list it as new. I bought 3 watches from Sears, though, where I had the same problem as you. It is possible to create a second listing for the same item (I haven’t tried it though) and there you can list it as new. If you do a Google search you should be able to find someone who explains how to do this.

trackback

[…] the deal and received the full 10X points.  Not bad!  Sure, it’s not quite as good as Amazon paying me for collecting BA miles, but I’ll take […]

trackback

[…] electronics and raked in over 140,000 BA miles.  You can read about that deal in my posts “How Amazon paid me to collect miles” and “Round trip to Hawaii for […]

Paul
Guest

Have you considered having the products shipped directly to Amazon? Is there any way to make this work?

It would be nice if you could place the order, and have it go directly into your FBA inventory. I’m doubtful it could work, but it would be great if it could!

FrequentMiler
Guest

Paul: That would be great, but you have to print out a form and include it in the package that is sent to Amazon.

trackback

[…] British Airways portal offered 36X at Nordstrom I bought and sold headphones and watches (see “How Amazon paid me to collect miles”).  And when the Southwest Rapid Rewards portal offered 15X at Sears I bought and sold […]

Tom / SitInFirst.com
Guest

@Brent: Even if you aren’t issued a 1099, if you sell something above your cost basis, you are required to report the income.

Tom / SitInFirst.com
Guest

FWIW – I had a stake in a firm that did a lot of reselling on Amazon. Well over $100k in sales, and we never got 1099’d by them. (We did report the income, of course.)

trackback

[…] When shopping portals run big promotions, it sometimes pays to buy things just for the shopping portal points.  For example, early last year, the British Airways shopping portal briefly offered 36 points per dollar for first time users shopping at Nordstrom.  I qualified, so I bought over $4000 worth of headphones and GPS watches and I earned over 144,000 points.  The idea was to resell the merchandise in order to get most of my money back.  Whatever money was not recovered would be my cost for “buying” 144,000 points.  As it happened, I ended up making money on that deal, but that was due to a one time fluke (see “How Amazon paid me to collect miles“). […]

Ken
Guest
Ken

I’ve used FBA before and had Amazon not count all the items I sent in. When I opened a case about it they said I must have miscounted when I packed the box to send in and closed the case. They obviously lost the items and blamed it on me. And short of video taping me adding the items to the box there’s no way to prove I actually sent it in.

Do you use stickerless, comingled inventory or do you print labels and cover the barcode with them?