Flipping or reselling phones on eBay, is one of the brightest and overlooked business ideas out there. As a thought experiment, try to think of even one person you know who still doesn't own some sort of smartphone. That's right, one or two people is all you can come up with - everyone else you know either has one or is thinking of buying a phone. And that's a good sign, because it proves there's absurd demand out there, and we can tap into it if we follow a good plan.
While the above action plan might seem straight forward, there are a lot of ways to go wrong, and that's why I encourage you to read the whole phone flipping course or bookmark it to refer to later if you decide to go for it.
Listing your ad on CraigsList
We use CraigsList because it's still valid today, but maybe for you, it's something else. Use whatever resource you have at hand, to advertise yourself as a phone buyer and stay local to your city. The following is an image of an example of an advertisement in a city near me:
Yes, it's mandatory that you include a picture of phones and cash - just kidding! It's a bit over the top, but you get the idea. Make your ad simple! Include a picture of your phone if you have to, and use simple statements in the offer. Write which used phones you'll buy, and offer cash for them.
At this stage, you might be tempted into posting a price list. It might seem like a good idea because you won't be receiving calls from uninterested leads. Unfortunately, the way psychology works is, people will look at your ad and immediately disregard it, and you won't get any calls at all. Think of it from the owners' perspective. If someone is offering a specific amount of money for something, without even seeing it first, it just registers in their minds as a low-ball offer, and they move on.
As time goes on and you make more and more of these ads, try out different variations on the picture and text you use. Small changes here and there could result in more business, so it's always good to experiment.
Talking to callers who want to sell you their phone
Politeness and good phone skills go a very long way here. Be courteous, and you'll be amazed at what you get in return. Start the call with a "Good Morning, Mark speaking!". Introducing yourself is important. Please realize the person on the other side already decided to sell their phone, and the rest is just a matter of price. Also, not everyone has an eBay seller account like you, in case you're wondering why don't they sell it themselves. The caller is calling you because you are their only chance to cash in.
Ask as many questions as you can about the make and model, how long they had it, what's the condition, and defects. All of these things matter to you because the last thing you want is a surprise later. Note all the details on paper, because it's easy to forget critical details.
Researching the phone quickly on eBay
If you happen to be in front of a computer, you can even do these checks while on call. If you're don't have a way to check prices at the moment of the call, just say you'll call back later. Filter for "Sold Listings", and the same make and model as the caller's phone. There are a lot of listings from new sellers, and these usually get low prices because of the perceived risk from buyers. Look for more established sellers and see how they did. Check more than one, and get a feel for the average price they get. Below is a screenshot of this in practice:
As you do this research, please force yourself to be realistic. For example, as of this writing when I check the prices, I see the following: $775, $720, $750, $750, $790, $740, and so on. If the phone is in good condition, you'll be able to get about $740 for it. Instead of looking at the highest or lowest prices, try to get a feel for the average fair price that eBay buyers are paying.
When you do this kind of research enough, very quickly you'll start to remember prices off the top of your head, and you won't have to refer back to eBay so often. If you plan on seriously starting a flip/resell business, check out other ways to do your eBay research, which put you miles ahead of your competition.
Making the offer for the phone
Building on the above "iPhone XS Max" research example, and assuming the caller claims the phone is scratchless and is fully functional (ie, not water-damaged or iCloud locked), you now know you can comfortably get $740 for it on eBay. So what should you offer? I recommend offering 50% of that to start. So your initial offer will be $370. That might seem like a terrible offer until you do a bit of math to see where you'll stand after all the fees.
As a rule of thumb, roughly 15% will go to eBay and PayPal. So that $720 x 85% will mean you will only get $612 in the bank. If you offer the caller $612 or more, then you'll be losing money. We have an eBay fees calculator to help you with the calculations here. But keep in mind, that's only your initial offer and remind the caller that you haven't seen the actual product yet. Make your case clear, and also ask them how much were they expecting? This is a negotiation game, and you'll get better at it as you make more flips. If the counter-offer is acceptable for you (I would say $520 would be my absolute upper limit), you're free to move on to the next step. Otherwise, you're better off telling them that you're sorry, but can't offer any more than that, and if the caller changes his or her mind then you can meet. Again, only about 1 out of 10 callers will turn into a resale opportunity, so don't be afraid of turning people down. And your competitors also be calling you, just to hear your prices!
Once you agreed on the phone specs and price, tell the caller you'll need to get a copy of their ID and you'll be signing a Sales Agreement. This is super important to do, and a lot of people skip this step because they don't realize that it's easy to get in trouble with this business. Consider this - what if the phone is stolen? Normally, a thief will back out of this deal right away, out of fear of detection. If it's an honest person, they'll have no problem with this, and you can even offer a copy of your ID in return. If you plan to do serious business, having this paperwork is necessary for your protection. I recommend visiting your local attorney to write up the Sales Agreement, it won't cost you a fortune and you'll have peace of mind.
Buying the phone for cash
It's tempting to agree to meet on the same day, but you're better off devoting the coming Saturday for this task. Most people either go to school or work during weekdays anyway. To have a streamlined side-business, you should do the phone buying on Saturday morning, and if you've been working hard during the weekdays in advance, you should have a busy day! Try to plan your route and schedule in a way to get the most phones in a short amount of time.
For the meetings, choose a public place. Avoid parking lots and empty streets. Remember, the caller knows you have cash on hand, and probably a lot of it! This is really for your safety and also for the caller's safety.
When you meet, be polite and understanding. If the seller is a woman, she'll very likely bring her boyfriend or husband, and this is OK. Ask for the phone so that you can inspect it. Look for anything abnormal - does it turn on as expected? Is it sluggish or not? Is its appearance as you expected? If something doesn't feel right, you can always back out, and no harm is done. But if all is good, then you've just scored! Sign 2 copies of the Sales Agreement (one for you and one for the seller), exchange copies of IDs, pay for the phone and you're now officially in business.
Keep a track of all the paperwork
The Sales Agreement will include important details including the date, product that was sold and the price paid. You should store this in a safe place for the coming tax season. Please also consult with your Accountant and make sure you will be paying taxes only your earnings and not on the full sales prices! So yes, the signed agreement serves two purposes - security and for tax declarations.
Keep a spreadsheet of all your expenses and income, figure out what your actual earnings are. Then do the math and calculate how much you earn per hour on this side business. Depending on your sales, negotiation and eBay skills, you should end up with something between $20 and $50 per hour here. But if you earn less than $20, then you should experiment more and look for ways to improve either your negotiation or research skills.
Please also note down your gas and trip expenses, because these will add up!
Listing the phone on eBay and finishing the flip
Now, on Saturday evening, it's time for you to make all the listings. I encourage you to do this on the same day so that your inventory is spending one less day just sitting there, and you'll be glad to not have to do this on Sunday.
When listing the phone on eBay, take good pictures of it, and show all the imperfections. If there are any defects, mention them in the description. For example, if there's a small scratch on the screen, note it down. By the way, these imperfections were also your negotiating cards, so you could use them to bring the price a bit lower if you have to.
Fill in all of the product attributes like the carrier, model, condition, storage and so on.
When you make the listing, first try listing it in "Fixed Price" format, and put a price of just barely above average. Like in our example from above, try $760 at first, but only if you can afford to wait some extra time. If you can't afford to wait, then list of for $740, and it should sell quickly. It's only a $20 difference, but for you, it might mean an extra 3% on your investment, and this is always welcome.
You can experiment with doing Free Shipping, but from my experience, you're better off without it. Just charge a flat fee like $7, and this doesn't seem to have an impact, because the phone prices are usually a couple of hundred dollars.
What about flipping broken phones?
I recommend that you try this only after you've become good at the basics. When you pay someone cash for a broken phone, you never really know what you're getting, and more often than not you'll get a piece of garbage. There are exceptions here, however, and I'll mention them!
First of all, please avoid water damage. It's really rare that such phones can ever be brought back to life, and no one will want the internal parts either. On the other hand, iPhone models 6/7 with broken screens can be great for fixing and reselling. First, if the screen is cracked enough, the phone looks so terrible that you'll have an easier time with negotiation. Also, with a bit of work, you can even replace the screen yourself. The older iPhone models are also much easier to fix as opposed to the new ones were even taking off the screen is a challenge.
But again, please only try this after you're good with normal phones because it's too easy to lose money chasing broken phones.
I hope this was a useful introductory course for you to the business of flipping or reselling phones on eBay. Many people do this business even for a living today, and since demand is only growing, I believe this will be a growing opportunity. One more thing I'll mention is, the easiest flips tend to be with older models, phones that are 2-3 years old become more "subjective" in terms of pricing and negotiation. It will be a rare flip where someone brings you a near-new phone, that's for sure.
A lot of times, people think about flipping phones by buying and selling them on eBay. I have to dispel this right away - from my research, this just can't work at all. The market is just so tight, you'll seldom find a phone cheap enough to cover your eBay fees and leave you with any profit. If you do find one, then most likely there's some catch. Perhaps, the only possibility is when you buy broken phones for parts and put them together, but this is so labor and time consuming that it's not worth it.
If you have any questions or more to add, feel free to use the comments section below.