Phone Selling Business: Real-World Insights from Pro Resellers
Thinking about flipping phones? Learn how to find phones to sell, how to appraise phone values and where to resell phones for a profit with expert insights and money-making tips from professional phone resellers.
1. Find a steady supply of used phones
You need phones to sell, and one of the most popular ways to find them is by advertising on sites and apps like Craigslist, Facebook Marketplace and OfferUp. It’s easy to post a wanted-to-buy ad; however, heavy competition can make it difficult to acquire phones, according to professional phone reseller Will Packard.
“You’re competing with other people who are interested in buying, and that makes it especially difficult because we flippers need to buy at a lower price than most people in order to make a profit,” he says.
Flipsy Local helps resellers meet those challenges. The unique service connects local buyers with local sellers who have already accepted their offers – typically at significant profit margins, since local sellers will accept lower payouts in return for same-day cash.
Another strategy is to post ads in local classifieds sites and publications, including newspapers, which can be less competitive. The challenge ad acceptance, as such publications reject poor ads. They key is to keep testing until something works.
|Don’t get scammed! Learn how to spot common phone buying scams|
“This isn’t a hard job, but it’s like everything else: you get out of it what you put in,” says Tiffany Hurt, who owns Hurt’s Resale. “It requires posting ads regularly to keep an influx of calls.”
In addition to classifieds ads, some resellers put up websites and engage in local search marketing. Others buy phones through their existing storefronts; for example, wireless retailers, pawn shops and phone repair businesses that already have targeted foot traffic. Again, you need to figure out what works in your market, because buying phones that can be resold for a profit is critical to success.
“I get two extremes,” says Hurt. “Either people who have phones that are only selling for $25 so there isn’t much room for profit, or expensive new models that I don’t always have the funds to acquire.”
2. Accurately appraise phone values
The ability to accurately valuate phones is crucial to resellers. You need to know how much you can get for a given phone before you buy it so there’s ample room for profit.
Some resellers check eBay’s sold listings to see how much phones are worth. Some check price lists from private buyers they’ve established relationships with. Many use Flipsy to compare phone values from multiple buyers at once.
To arrive at an accurate valuation, you need to know a phone’s model, storage capacity, carrier and condition. Professional resellers often use phone-buying checklists to ensure they don’t make costly mistakes. In addition to model, capacity and carrier, your checklist might include:
- Blacklist check (use a tool like CheckESNFree or Sickw)
- Activation lock check (make sure all activation locks and phone finders are disabled)
- Phone operation check (does it turn on, charge and function?)
- Cosmetic condition check
|Learn more about how to check a phone & download our phone buying checklist|
Some resellers buy blacklisted and locked phones, but many do not because they might be reported stolen and difficult or impossible to resell.
“The biggest pain is people trying to sell iCloud locked phones, which I avoid,” says Hurt. “Even if they’re not stolen, it still dramatically drops the value of a phone.”
It’s possible to sell broken phones if you know where to find buyers. Some resellers repair broken phones before selling to increase the value; however, the investment in parts and labor isn’t always worth it.
|Want to repair phones, too? Here’s where & how to learn phone repair|
Once you assess a given phone’s condition you can make an offer based on how much you can sell it for, less any fees and your profit margin. Negotiating is often part of the deal.
“A lot of people will think their device is still worth near retail price, despite multiple subsequent models being released, and will get quite abusive,” says Hurt. “This job takes a lot of negotiation skills and the discipline to keep your emotions and initial reactions under control. It requires time and patience to answer people and walk them through the appraisal process. Many will just ask how much you will give them for an iPhone 6, not realizing that it’s dependent on GB size and carrier as well.”
Did you know? Many phones are worth $100+. Find the value of your phone.
3. Find a reliable stream of steady buyers
Once you’ve mastered phone acquisition and appraisal, you need to find a reliable outlet for selling your inventory. Options include online marketplaces, online buyback stores and local sales.
Phone profit margins: How much can you make reselling phones? See what the experts say https://goflipsy.com/article/5635/phone-profit-margins
Listing your phones on eBay and Swappa has the benefit of massive reach but the burden of heavy competition. Your prices must be competitive to facilitate quick inventory turnover – an important characteristic of successful reselling businesses.
Though buyers on these platforms tend to pay full market value, shipping fees, selling fees and payment processing fees can reduce your overall profits. In addition, there’s no guarantee of sale and you might wait a long time for inventory to sell – if it sells at all – and values can drop while you wait. You also need to consider the investment it takes to create and monitor detailed listings or pay employees to perform these tasks.
Online buyback stores (private buyers)
Online buyback stores facilitate two critical components of successful reselling businesses: quick inventory turnover and cash flow. They offer a little less than marketplaces because they’re resellers that need to profit, too; however, their business models are based on high-volume sales so they leave ample room for you to profit.
Sales are instant and convenient: there’s no need to create or monitor listings, so time investment is minimal (in fact, online buyback stores allow you to sell a phone within minutes of buying it). In addition, there are no selling fees and shipping is free. You can even opt for check payments to avoid payment processing fees, which allows you to maximize profits.
It can be tedious to check multiple online buyback stores to find the best offer for every phone, which is why many resellers turn to Flipsy. Our free service instantly compares prices from more than a dozen Trust Verified Stores so you can see who is paying the most for any phone.
You can sell inventory through local channels like Craigslist, Facebook Marketplace and other local classifieds. Some people resell phones from existing storefronts.
Local phone sales tend to net the highest payouts per phone; however, there is no guarantee of sale and you might wait a long time to sell. You’ll also need to create and monitor ads, schedule times to meet buyers in person (who might not even buy) and pay for any advertising. You’ll incur additional overhead if you operate a brick-and-mortar location or have employees.
“When I first started in the industry, I sold on eBay,” says Packard. “Then, I got sick of all the scams and eBay fees so I decided to sell locally. The problem with this is that things often sell slowly, which can be horrible because having cash in your pocket is very important so you can buy more phones to flip. I eventually settled on selling to private buyers. They’re extremely useful because there are no scams when selling to them, their prices are often quite good and you can sell everything as soon as you buy it.”
4. Manage your business
Acquiring phones, appraising them and finding buyers make up the foundation of a successful phone selling business, but it’s just as important to adhere to business management best practices. Create a business plan that accounts for every challenge and expense, then work to solve problems before they arise so you can project profitability. Remember that quick inventory turnover and cash flow are paramount.
At a minimum you should account for the initial investment required to buy phones, advertising expenses, time investment and fees associated with shipping and selling.
Don’t overlook the amount of time you might put in to buying and reselling phones. Operating in rural Arkansas, distance is one of Hurt’s biggest challenges because it takes time to meet sellers.
“This business works pretty much anywhere, including rural areas,” she says. “There is a guy who does great sales in the middle of nowhere, Wisconsin. But I find being in Arkansas has been a challenge in that a lot of people who contact me are 40 to 100 miles away, and it isn’t always viable for them or me to do business.”
Be sure to account for overhead expenses like business operations and employees, business licenses, insurance fees and taxes you’ll need to pay. You should also invest in education.
“You need to know a lot about phones in order to be good in this business,” says Packard. “When I first started, I didn’t know much about phones, but simple YouTube research can teach you a lot.”
Ultimately, remember that selling phones is a business. Whether you intend to resell phones part-time, augment your existing business or become a full-time phone flipper. Treat it like a business predicated on your ability to profit and plan accordingly to position yourself for success.
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