20k Spending Challenge Update 1: $4,625 Spent After 2 Weeks

If you haven’t heard, I recently set out on a $20,000 spending challenge inspired by the $20k minimum spending requirement on the Amex Business Platinum.  The goal of the challenge is to put gift card churning up against merchandise reselling to see what kind of profits and time investment come with each.  I officially “started” the challenge on 5/4, so I’m two weeks in and want to share my progress so far.  I’m well on pace to reach the $20k spending mark via various gift card purchases, but I think there’s some room for improving my profit margin.  Find out who else is competing in this unique challenge and exactly where my spending has gotten me so far.

Introducing The Competitors

In my introductory post, I failed to list out the different people that also chose to participate in this challenge, so I’ll take this opportunity to do so.

I’ve also heard a rumor that Big Habitat might be joining in as well, so I’m excited to see what kind of numbers a reselling veteran can produce with $20k spending over this 90 day span.  The more the merrier in my opinion, because additional data points should give a better picture towards the average person’s experience.

My Progress: 23% Complete In 16% Of The Time

At the end of 5/17 (two weeks since I began on 5/4), I have spent $4,625.34 out of the $20,000 that the challenge requires.  That puts me just under a quarter of the way completion after only 2 of the 12ish weeks that the challenge allows, so I’m well on pace to meet the spending requirement.  This is good news because I won’t have to get too creative with closing out the last few thousand, but this also means I might not be fully optimizing my gift card reselling.

I don’t have a consistent method of flipping gift cards for profit, so I have to do a little searching for deals and jumping on the ones that work for me.  If my goal was to maximize profit on $20k in 90 days, I would ideally calculate the profit margin that would give me $20k of opportunity over 90 days on average and not buy any gift cards under that value.  This means if I decided I could get at least 5% profit across the entire $20k spending, I would refuse to buy a gift card where I could only get a 4% profit margin.  In the real world though, I’m happy with just about any profit margin and won’t pass up an opportunity just because I happen to be in this spending challenge.  My final numbers in the end won’t be “optimal” for 90 days, but will instead be a reflection on the average profit I expect within a random $20k sampling of my gift card business.  Don’t take this as an excuse though, I still think I have a chance at the highest profit margin.

The Numbers Breakdown

Spending Complete: $4,625.34

Inventory Total: $2,904.43 (this reflects the cost of inventory, not the value, not the expected sell price)

  • Waiting for gift cards to arrive: $2,340.11
  • Waiting to sell gift cards: $564.32
  • Gift Cards Listed for Sale: $0 (The few I had listed sold on 5/17!)

Pending Earnings Total: $1,314.69

  • Cash From Sales: $1,133.11 (just waiting on the check)
  • Shopping Portal Cash Back: $48.97
  • Store Bucks: $114.61
  • Other: $18 (fuel points I haven’t redeemed yet)

Realized Earnings Total: $626.64

  • Cash from Sales: $626.64

Total Time Spent: 4.5 hours

The Deals

These deals count for a decent portion of my total spending, but the rest of my cards come from non-repeatable arbitrage opportunities that I don’t intend to reveal here.  Small hint though: I’m a software developer…

Thoughts And Looking Forward

I’m really happy with my results so far and currently have a 12.8% profit margin on cards sold ($1,941.33 total earnings on the sale of $1,720.91 worth of inventory)!  Keep in mind that number does not take into account any points, miles, or cash that buying the gift cards on a credit card would return.  To make comparison for the competition easier, none of us are including the 170,000 total MR that would be earned by completing the $20k spending requirement on the Amex Platinum card.  12.8% is a huge jump compared to the ~5% margin I was able to realize in the first $20,000 I spent flipping gift cards, but I’ve sold less than 10% of the necessary cards so it’s too early to say whether or not I can maintain this pace.

One thing that I still haven’t done is buy Amex gift cards through a shopping portal.  There’s no reason I couldn’t buy them first and then unload them via buying the retail gift cards for an extra % or two of pure profit.  The only negative is the extra effort involved and my irrational fear of shipping thousands of dollars in Amex gift cards to myself through the mail.  Much like I hesitated to pull the trigger on my first rewards credit card application and much like I hesitated before buying my first gift card to resell, I am also hesitating to start running my spending through Amex gift cards.  I like to fully understand something before I jump in and this is no exception, but if churning and gift card reselling are any indication, I’ll be knee deep in Amex gift cards in no time.  I did buy my first Amex gift card from Safeway through a $15 off $150 coupon and had no trouble unloading it, so I think it’s about time I step up to the plate and order some big denominations online.  Not paying for the unlimited shipping will cost me a few bucks the first time, but once I unload the first large batch, I’ll probably jump in all the way.

Simply Best Coupons will be paying out 2% on 5/20 and I think I’ll take that opportunity to put in my first order of cards.  Wish me Luck!

13 thoughts to “20k Spending Challenge Update 1: $4,625 Spent After 2 Weeks”

  1. Great job so far! Those margins are going to be hard to beat.

    Definitely start buying those AMEX gift cards. Make sure to buy $6,000 or more so that a signature is required upon delivery.

    You forgot to add miles per day to the list of competitors! I’m sure he’ll forgive you.

    1. Whoops! I’ll add him in now. I copied the list from his post and forgot to add him in. Thanks for the catch!

      My plan is to jump into Amex GCs on the 20th for the Simply Best deal, and $6k sounds like a good number to start with.

  2. The software developer comment has gotten me thinking…unfortunately I’m not even remotely qualified to be doing what I think you’re doing.

  3. Good job so far.

    Noah, why does sometimes your site not load? This has happened a couple of times already in the past month (maybe too much traffic?)

    1. I haven’t noticed any loading problems since I switched my hosting over to a new provider about a month ago (my last provider was awful and the site would go down almost daily).

      What error page are you getting? Just a 404 not found, or something else?

  4. Actually Top Cash Back is offering 2.25% today on AmEx business GCs. You might want to jump on this today if you already have TCB.

    1. I did jump on the 2.25% offer today, hopefully my purchase doesn’t get declined for some reason. TCB is my primary shopping portal because they’ve had the highest rates on ebay for a while, so this makes my life easier instead of trying out Simpy Best Coupons.

      Thanks for the heads up

Comments are closed.