Proven Amazon Course (PAC) Selling on Amazon Mentorship Series (SAMS)

Transcription

1 Proven Amazon Course (PAC) Selling on Amazon Mentorship Series (SAMS) Advanced Gift Card Engineering Transcript Welcome everybody! Welcome to the Selling on Amazon, the SAMS Mentorship Series from Jim Cockrum and the Proven Amazon Course. Tonight's webinar is Advanced Gift Card Engineering with Brett Bartlett. We are going to let Brett get started right away, because we don't want to waste any time. I want to let you know, real quick, that we are recording the webinar and for those of you that have purchased the SAMS course, the recording will be available within forty-eight hours - we try for twenty-four - up on the SAMS resource page. Thanks for your patience. We are working to get the Question & Answer logs up there too. That's taking a little longer than we thought. We'll get there. Hey Brett! How are you doing this Monday night? I am doing great. Excited to talk about Gift Card Engineering. All right! I want to hear what this Gift Card Engineering thing is all about. I've got my notes and paper. I'm ready! All right. So we'll do kind of like we've done on the last couple. Go ahead and hold the questions. It's broken down into steps, so go ahead and hold the questions until I get done with the steps. Gift Card Engineering is something that we do on a daily basis. Thank goodness it's not nearly as complicated as Coupon Engineering. It is something that basically does not make sense for you not to do it. After you see this, you're going to be saying, Why am I not doing this right now? I kind of had that moment, too. So I'm excited to share this. How do you become a successful Gift Card Engineer? Go ahead and type your answer into the chat, if you think you know what it takes to become a successful Gift Card Engineer. We're watching. They're thinking. They know that you have all these trick questions. They're like, Let's see. How can I answer that? Let's see. Just do it! Work. Very brutal. (Laughs) Okay. Work it. Do it. Put your effort into it. Hard work. Consistency. I like that. I like that one. I like that one too! Okay, we're going to let you give us the right answer now. You've got to be willing to spend money on this one. This is one where you have to be okay spending money. If you're anything like me, you want to keep that money in your pocket and feel great about it. The bummer about keeping money in your pocket is it's not going towards inventory. When I was first starting selling on Amazon, one of the toughest things for me was realizing that a lot of the money that I make has to go back into inventory. Otherwise, my business stops. So Gift Card Engineering is based on the fact that you're willing to spend money. That doesn't mean that you're going to spend tens of thousands of dollars every month. But it's one of those things where right off the bat, you're going to be spending money. Whereas Coupon Engineering, you start off trying to not spend any money. Gift Card Engineering is much simpler, but yes, you do have to spend money. You have to spend money to make money. So what type of person makes a great Gift Card Engineer? A person who knows their typical monthly budget at stores. That is a very key factor when you're talking about gift cards. Let me explain why. This is what you don't want to do. You don't want to buy eight hundred dollars worth of gift cards at let me think of a store off the top of my head Sports Authority or maybe JC Penney or a store that you don't have a track record on. Because even

2 though you're saving money by getting gift cards, you're not spending the money. You never want your money to be tied up in something that you're not putting towards inventory. So you've got to know your typical monthly budget at stores. A person who knows every dollar counts. You'll understand the concept of Gift Card Engineering in a second, but you have to be one of those people that wants to always be shaving off a couple points. Meaning that you want to make every dollar count. You want to make every dollar you can. That's a Gift Card Engineer. A Gift Card Engineer is someone who takes advantage of great deals. This is where I make a good amount of money before I even buy anything, by Gift Card Engineering. I can actually predict my monthly income based off my Gift Card Engineering. So, five steps to becoming a Gift Card Engineer. Step One: Configure your monthly budget for each store that you're going to. Gift Card Engineering is very heavy when it comes to retail arbitrage. Which is when you walk into your local department store or a store around you and you buy something there, off the shelf and you turn around and send it in to Amazon and you sell it for more than you bought it for. This is based off of going to retail stores around you. So that's Step One. Step Two is: Purchase gift cards from ebay or this Facebook group. I just put it up, because we had a lot of people ask me about a Facebook group. It's called Gift Card Goodies. What I'll do there is I'll just post some of the best gift card deals that I see for the day. One of the coolest things about gift cards, is that you actually can purchase them and advertise about them, but it doesn't kill the market. It doesn't bring a whole bunch of competitors in, because people buy a whole bunch of different things with gift cards. Three is Focus on fast turning items. Four is Track sales and increase budget. Then Five is Outsource. So let me give an overall concept of what we're talking about with Gift Card Engineering. Real fast. I'm sure everyone is like, I still don't understand. The concept of Gift Card Engineering is that you are buying a discounted gift card and using those discounted gift cards at retail stores. So let's picture this: Let's say that you get a Target gift card, and you get it at ten percent off. That means if you bought a hundred dollar gift card, you've already made ten dollars on your entire business. Because you have that ten percent. Or if you want to look at it a different way, you have an extra ten percent to work with over all your competitors. That's why I say it's one of those things where it's why would you not do this? If you're already going to the store and you're already shopping there, you need to have discounted gift cards in your pocket ready to use every time you go there. That gives you a competitive advantage over your competitors. So let's go ahead and go to Step One and then I'll take some questions. I'm sure there's some questions right now. Step One: Configure your monthly budget at each store. This system does not work unless you know how much you typically spend at each store. Because if you guess on how much money you have to buy with gift cards, there's a big problem. Because that is money that is not going directly to inventory. That is a big no-no when you're buying and selling on Amazon. So know your numbers. How much you spend at each store for every month. What your typical return on investment is. You should know these numbers anyway, but it is crucial with Gift Card Engineering. Is there huge seasonal sales? If there's huge seasonal sales, you should stock up on gift cards at that time because not only are things going to be marked down seventy-five percent, but if you can get a gift card at eighteen percent off, that's a substantial you're talking about ninety-six percent, at that time, off of the product that you're buying. That's why I say these things become very lucrative, very quickly, if you know what you're doing. You need to know, how much can I realistically afford to spend on gift cards? When we started this, we were only spending two hundred dollars a month. Now we buy them, anywhere from ten to twenty thousand dollars a month on gift cards. You need to know how much you can afford to spend on gift cards. The best thing about Gift Card Engineering is that it is very, very, very scalable. You can increase it while you are increasing your Amazon business. The numbers do the talking for you and make those decisions for you. All you have to do is purchase the discounted gift card according to how much you're shopping at each store. That is Step One. Kat, I'm open for questions.

3 Well, I don't see a lot of questions. I think people are starting to put the pieces together in their heads and go, Oh, okay. So basically with gift cards, I'm spending money ahead of time. So I'm thinking, okay last month I spent a hundred and fifty dollars at Target. So I'm going to put my budget for Target at two hundred dollars. Then I'm going to go take that two hundred dollars and go buy gift cards as cheaply as I can and use that money for my Target purchases. Right? Exactly. So now you have an extra...target is a tough one to get very discounted gift cards. But if you are already shopping at Target, you need to have those discounted gift cards. Basically, if you're already shopping at Target for yourself too, why not do it with a discounted gift card? You just have to know what stores you do this at. Stores that have a lot of groceries, so people can go there all the time and shop, it's very hard to find high discount. But stores like TJ Maxx, Dick's Sporting Goods, JC Penney, Macy's. Kohl's. Kohl's, yeah. Those stores have Starbucks those stores have very high not very high, but getting into two digits and above. You can get ten percent and above discounts on those cards. Sometimes I can get on Starbucks and TJ Maxx I have gotten forty percent off discount cards and that's just oh my gosh! It's so easy to go shopping then. That's like the Kohl's that comes out every month with the forty percent off coupon. That's just too hard to ignore. So basically Gift Card Engineering is one more step in stacking your discounts. Because you could use that discounted card with the coupons that you taught us about last week, along with the sales that you're watching for and along with the clearance. So you're stacking all these discounts on top of each other, right? Right. I call it Drilling down the price. What you're doing is, you are doing everything in your power to...because, Kat, you know. What is one of the biggest complaints that you ever see when selling on Amazon? People say, The competition is driving down the price. I'm not going to make that much money. I honestly don't really worry about that that much. Most of my margins are so drilled down that unless someone is doing exactly what I'm doing, they don't have the same margins that I do. So I can take a hit. They can decide how much they're willing to drill down their margins. But I'm not that worried any more. This is one of those things where you're just building so much advantage into your business, it just does not make sense not to be doing it right now. Absolutely. Carol was asking for some real life examples. So for instance, if you found something on sale at Target that you can sell for thirty, of course, you're going to buy that. But then that's what happens. The race to the bottom begins. Somebody decides to sell it for twenty-five. The next person goes to twenty. Suddenly your margins are gone if you like everybody else paid ten dollars for that item. But if you had a Target gift card for twenty percent off, you only paid eight dollars. Then maybe you had a coupon, so you actually paid seven dollars. So that's what she was asking about, some real life examples. Right. Yeah. I'll give you a great real life example. You already brought it up. Kohl's. Kohl's will have sales where everybody knows about Kohl's sale. It's not a secret. If you're like, I found out about the Kohl's sale... You know, Kohl's makes it very known that they have sales. So the secret isn't the sale. The secret is in what else are you using to bring down the price at Kohl's? Kohl's will do an online sale, or whatever the sale is. But if I buy them in bulk, I can get Kohl's gift cards at fifteen to eighteen percent off. Sometimes twenty. So let's use fifteen percent. Okay, if I buy an item that typically costs a hundred dollars, but Kohl's is having their thirty percent sale, now it's on sale for seventy. I plan on selling it on Amazon for two hundred. Then I add in my fifteen percent that I got on my gift card. Now I'm probably out of everyone else's reach for that. That gives me the cushion for my price to drop. So I'm not really worried any more. I do that all the time at Kohl's because Kohl's is very competitive. But I don't really worry about it, because I have that extra cushion for the price to drop. That's why I do that all the time. They're saying, Thank you for that example. Jerry chimes in, Target gives gift cards for a lot of purchases. I've seen these too. Purchase your paper towels here this week and we'll give you a five dollar Target gift card. That's a nice bonus, but that's not even what we're talking about. We're talking about when you go out and buy a Target gift card for fifty dollars. Do you incorporate those five dollar gift cards they give away also?

4 That would fall under the category of Coupon Engineering. But, very good point here if you're doing dual Gift Card Engineering and Coupon Engineering, guess what happens when one of those sales goes on? Where they're just kind of throwing those gift cards out for purchases? In Step Two we'll talk about it. All those gift cards go to ebay. Because people sell them on ebay. So there you are. You've probably already made your five dollars on Coupon Engineering, now you're buying discounted Target cards on ebay. So you're almost doubling your return. It's knowing how to work the system. You're always looking for an advantage over everybody else. This is a great way to do it. Okay, someone is asking about the Dollar Tree store. Have you ever found discounted gift cards for dollar stores? Those would be hard to find, I would think. I looked for them. I haven't found any. I guess they're really hard to find. I search a lot for gift cards. I do it all the time. It's actually one of the things that I still oversee. Because we do it in such high volume. But I haven t found them. It's a tough one. It would be a great one to score, because if you could get even five percent at a dollar store, that's substantial. They're asking about how to buy the discounted gift cards. I promise you, we're getting to that. That's one of the five steps. We'll get that question answered How do I buy these? Ryan has a great point. He says, I'm looking at an ebay auction right now. It's a one hundred dollar Target gift card and the current bid is a hundred and two, fifty. That makes no sense. Have you seen those auctions too, Brett? Yes, I have and here's why that's happening. That person has an ebay gift card. So it's actually cheaper for them. Maybe they're like, I've got to buy groceries at Target right now. But I can use my ebay gift card that I didn't pay for to get this Target gift card. So they're basically hedging with an ebay gift card to get a Target gift card. Wow, so they're going down in value instead of up, because they over-extended their budget this week. Or somebody gave them an ebay gift card and they can't use it on ebay, they need food. Or somebody has a snipe program set up really, really wrongly. Yeah. They didn't get a good deal on that one. Okay. Thanks, Brett. I think we're ready for the next one. All right, Step Two. Purchase gift cards from ebay or the Facebook group that I just mentioned. I mean, it's just a Facebook group. There's nothing special about it. I have purchased a lot of gift cards there. So I'd be more than happy to share the great companies that are out there that distribute gift cards. Because there's a lot. And there's some that are good and some that are really bad. So, two places to purchase gift cards: ebay and then there's tons of actual gift card companies on this Facebook group. I'll help you narrow down your search. Put daily posts on there so it's easy for everyone. I'm doing it every day, so I'll share the love on that one. So ebay is a great place to snag a discount on a gift card. Yes, Target has those weird scenarios where they're paying more for the card. Like I said, at Target anyways, you're going to get a substantial discount. Unless you're doing maybe a Craigslist post. Or maybe from a friend you're buying, something like that. But most of the time, ninety-nine percent of the time, any of your grocery stores - any time people can buy food those gift cards have a high value. Meaning the discount is not that high. Because the companies know that people can always sell them. So, like I said before, where you find the best discounts are things like TJ Maxx, Kohl's. The places where it's just commodity items. Those are the places where you'll see it creep up to ten percent or more. What I like to do on ebay is I can't wait for auctions to end all the time, because we've got to keep this business going, but I like to do a mix. I'll do an auction to try to snag a great price at like, thirty percent off from someone who just wanted to get rid of it. Then I'll also do the Buy it Nows on ebay, just to keep it consistent. Like I said before, what I do, a lot of these ebay sellers, they do this all the time. They get these gift cards all the time. And they would love to have a consistent buyer. They would love it. So if you have someone who is constantly selling

5 these gift cards, don't be scared to just contact them and say, Hey look, I'm looking for an awesome gift card supplier. Here's how much I will pay for X, X and X. That's something that you have to have lined up. They don't care if some day you will buy it from them. They want to know, how much are you going to buy from me tomorrow? So know your numbers. Know what you can offer them. Then just line that up and boom! You're set. You're ready to have a constant stream of gift cards coming in. But it's all based off of Step One. You have to know your numbers. You can get killed with Gift Card Engineering if you don't know your numbers. So make sure you actually know how much you spend at each store. Another great way to get more of a discount on gift cards is to buy in bulk. Contact some of these sellers and tell them that instead of just buying one fifty dollar gift card that you'll buy three hundred dollars worth or five hundred dollars worth. They like to sell it. Here's why: Every individual gift card that you ship, you have to get insurance on it, you have to pay for everything on it. It has the same cost as sending, you know, ten gift cards. So they love to sell them in bulk. That way they can increase your discount because you're taking away from their fees. Most importantly, remember you have to spend money to make money. And start small. One of the biggest mistakes I made was I went out and purchased a whole bunch of gift cards and it turned out a lot of the gift cards, you could only spend them in stores. We do a lot of online stuff. That really killed us. We had to actually go and find the stores around us and then go in and do it. So start small. Don't get into a situation like I did. Like I said, another place you want to check out is Gift Card Goodies. We'll be posting some good deals that I get from dealers with great return policies and if something goes wrong, you can get your money back right away. That's one of the things that I like about dealing with gift cards in high volume. Excellent. Okay, ready for some questions? Ready. Okay. First one is, Did you open up your couponing Facebook group to SAMS members? I know you were talking to Jim about that. Where can they find out about that? It's just open. It's a private group, but I don't have access to the PAC course or anything like that. So we'll talk to Jim about that and we'll get that information up on the SAMS page. Okay guys? Is that good? Someone is asking about sourcing at Costco. Yes, I've heard very good things about people sourcing at Costco. Haven't you? Yes, Costco is cool, because they usually give random bar codes on their items. So you have to do some research. A lot of people are too lazy to do their research on the item. So you can actually bring a lot of products to market and sell them on Amazon Great idea. Good question from Adriana, Do you get your gift cards in the mail or do you just get a number off of the ebay auction? Good question. You can do both. I love it when they just me the gift cards. Because I can just find a good deal during the day and before one of my team members goes out on a buy, I can say, Hey, let me see if I can get a gift card. Boom. Get a fifteen percent gift card. Hand it to them. Just made fifteen bucks, thirty bucks maybe a hundred bucks, depending on how much we're buying. I love to start my days like that. Sometimes you can't get the e-code for them. I know TJ Maxx doesn't allow you to do that. You have to have the actual card. So there are stores that have limitations on it. That's what I was wondering. I'm not familiar with that. I'm familiar with going to the local store with the gift card. But you're saying there are some that you can actually print out, like you print out a coupon and you can take that to the store and use that as a gift card? Yup. Excellent. Okay, I know that there is an issue with fraud on buying gift cards. What do you suggest or what are your best practices to avoid being taken by an unscrupulous seller when they're selling gift

6 cards? Well, that's why I love buying on ebay, because you're protected by Paypal. Like I said before, that's why it's important to get references from gift card companies. You want the ones that have a proven track record and back all their gift cards actually back them. I've had a couple people kind of it's not shady, but they're just kind of slow moving, you have to prove out some stuff and I'm going, This isn't going to work out for me. I'm done. Ninety-eight percent of the gift cards that I've ever gotten are totally fine. Off ebay, I usually make sure that they have a great seller rating. Again, these are people that do this for their living. So they don't want to mess around that much. Okay. Great. And they wouldn't last that long. Ebay is getting very good about watching that out. Now, you say that the Facebook group, Gift Card Goodies is the best place. Because there are a thousand different sites, like you said. The one I remember hearing about is Gift Card Granny dot com. That's a database. Okay. Gift Card Granny is a database where it sorts your stuff. Gift Card Granny doesn't deal directly...they don't purchase cards. They just set up deals with people. Interesting. So I'd be doing the ones that I've actually paid thousands of dollars to. Okay. So there is a cushion of legitimacy. They're reputable. I also know a friend of mine was selling a very high dollar gift card I think it was a five hundred dollar gift card and she actually did a recording during the auction, of her calling in and verifying the code. Oh, that's awesome! Yeah, somehow she removed the code from the recording, so somebody couldn't just steal it off the listing. She actually recorded herself and the telephone voice saying, Yup. Your gift card is valid for five hundred dollars. So people would know it was legit. That's very cool. I thought that was pretty cool. So a lot of I do a lot of Craigslist deals with people. That's a little more complicated and it's actually not something that I'm going to promote because I've met some very interesting people doing that and I've probably met some people who are not getting their gift cards in the best way. Craigslist is something that will open up a little bit of a floodgate and you're not sure how these people are getting their product. I definitely recommend, just for consistency, ebay or like you said Gift Card Granny, or any seller that I post on Gift Card Goodies. Okay, great. Last question is, What stores do you buy the most gift cards for? We kind of talked about that earlier about commodity stores. What have you found to be your bread and butter stores for this part of your business, your income? Honestly, I'd say Kohl's. Kohl's is one where if we buy ten thousand dollars worth of gift cards at Kohl's - which is something that we would do for a given sale or a given period of time if we can get that card up to fifteen, eighteen percent off, that is a good amount of money for us. That's a great discount. Yeah.

7 Yeah. So we like that. That's kind of our place. Kohl's has those super fast turning items that we can target and get our money back really quickly. If anything, we make our money in our gift cards more than in our product. I like Kohl's. That's probably where we make our most money. Three. I like Kohl's, but I have to stay away from there. They're like a temptation for me. Okay, Step All right. Step Three. We just kind of touched on this. Coupon Engineering is very different form Gift Card Engineering. Gift Card Engineering, you're going to focus on fast turning items. Fast sales are better. Margins really don't mean a thing if the item is not going to sell fast. So let's say you go out and you spend five hundred dollars on Kohl's. On gift cards. You walk in there and you scan a stuffed animal that's on sale for twelve for eight dollars and it scans at sixty-five dollars. You've never sold that stuffed animal. That seems like an outrageous price. There's really nothing about that animal that seems to make it that valuable. There's only one person selling it at that price. They randomly made up the price. You're like, Oh my gosh. There's thirty of these. I'm going to get all of them and make so much money. Well, if those don't turn, you've now tied up your cash and you've eliminated the point of having those gift cards. Because the whole point of the gift cards is to make money on fast turning items. So it's a little different mentality. Because remember, your margins are built into the cards. You have extra margins so you want those items to turn, so you can continually go back and buy more gift cards, and then buy fast turning product, and then buy more gift cards, and then buy fast turning product. What happens then is you actually build up a cashflow. That's what you want. You want that cashflow to be turning so you can move on to another store and repeat the process. So you don't want to tie up your cash. A lot of people will interpret this as, Okay, so you're saying if the item is selling at forty-five dollars, come in and price it at twenty-five. No. I'm saying not to tank the price. I'm saying focus on items that you think will sell very quickly. You don't want to get the items that may have a ten times markup, but if you don't know that they sell, don't buy them with your gift card. What you want to do is match the Buy Box, but be willing to drop your margin. One of the worst things you can do is say, Well, I want to make that extra three dollars! That is horrible with gift cards to tie up so much cash. You want that item to sell. Be willing to drop. Don't crush the price, but be willing to drop if the market dictates a drop. Most of all, buy proven items that you know will turn. How do we do that? How do we know if it's going to sell? I personally don't think that you should be spending that much money at retail stores unless you have done your due diligence buying things from thrift stores, yard sales, garage sales, rummage sales, friends and family's houses. That's where you learn what sells. Then when you go into a retail store, you can spend more money on those items, because you know they're going to sell and you don't have to guess. Guessing is a terrible thing to do in this business. So buy proven items that you know will turn and the key point in Step Three: Cash is king. You don't want to do all this and have no more cash. You want to have that cashflow coming back very quickly. So, open for questions on Step Three. Great point: Don't over-extend yourself. Having fifteen hundred dollars in gift cards and no cash is a bad idea. Do you have a secret for keeping good accounting for the stuff you get couponing with gift cards? Good question. There's a couple things that I'm trying out right now. I use Outright dot com. Kat, I think you recommended that to me. Then I use Mint dot com. And I'm trying something that's called Inventory Lab right now. Oh that looks promising. I can't wait to hear what you think of that. It's super cool. As far as bookkeeping, amazing. I really like it. This is something that I haven't found a great solution for yet. And I am a total nerd when it comes to numbers. I love the way their numbers are set up and the way they track everything. So that is something that I am looking forward to using to keep track of what I'm spending on gift cards. Great. Well, I put those links in the questions. Outright dot com is a free accounting service that

8 hooks up to your Amazon account and pulls in your income from there. And also your bank account, your business bank account, if you have one of those. Mint dot com is an online accounting. I'm not sure...i don't think Mint is free, is it? Is it more for personal...? Yeah, it's free. It's free? Excellent. Then this Inventory Lab dot com is a new service that we're all investigating. It is an Amazon listing service combined with a bookkeeping service. Interesting. Like I said, I haven't used the listing side at all. I don't really plan on using it. But I love their bookkeeping side. Yeah. Their bookkeeping looks interesting. That was the whole idea behind Inventory Lab, was to do away with spreadsheets. So for those of you using spreadsheets, if they're getting away form you, getting a little bit clunky for you, you might want to check that out. Okay, Step Four. We're moving right along tonight! All right. Let's do it. Step Four is: Track your sales and increase your budget. What you're doing is you're trying to nail down the ceiling for a store. Let me do my best to explain that. Let's use Kohl's for example. I know that around me with my team with the inventory that Kohl's has, we can't really spend more than ten thousand dollars a month there. That's our ceiling for it. We increased our budget from fifty dollars at Kohl's all the way up to ten thousand dollars. That's what I'm talking about when you're growing it. You have to be tracking your sales to know that. And you have to want to increase your budget. Remember what we said at the beginning, what makes a good Gift Card Engineer? You have to want to increase your budget. I know everyone's life is different. I know everyone has different bills to pay and different life circumstances. I am not saying that you should not pay your bills or anything like that. You have to be willing to put your money back into the system, because it's going to make more money. So here's some questions that you want to ask yourself: How much did the item sell for? How long did it take to sell? How much did you pay? How many can you sell in a month? I gave an example in another webinar about a purple toaster that I found. That purple toaster... That your mother found, young man. I have to correct you. Oh yeah. Sorry. That my mother-in-law found. She kind of asks me all the time, How many should I buy this time? I always ask her the same question, How many have we sold in a month? Then she has to go back, look it up, see how many we sold. So you have to be putting all these little pieces together. Otherwise, you're going to be running around with your head cut off chasing the next thing. You'll never have a proven system. You're always going to be doing what everyone is telling you to do. You ought to know what is working for you, why it's working and most importantly, how much money you're going to dedicate to that. That will give you a predictable sales forecast and a predictable annual budget. These are very huge things when you're talking about building an inventory system. Then, that will tell you how much money you're going to spend in gift cards at each store each month. Because your sales will dictate how much you're going to spend. You're not going to say, Well, I guess I could spend a thousand dollars at TJ Maxx... Because if you're not getting items that sell, if those items are not selling, then why are you buying gift cards for that store? That doesn't make any sense. The sales dictate how much you're going to spend on gift cards. Then - please, please, please focus on creating a proven system. That doesn't mean hands-free, you never do anything your whole life, kind of thing. I'm talking an actual system where you can say, I bought here because... I spent this much money here because... That's what you want to be creating. You don't want to always be running around looking for the next best thing. Absolutely. We're going back to the beginning. We've got some good questions coming in. I want to encourage folks...i'm trying to find out if you do this like I do. When I first started with FBA, I tracked every single inventory item I bought. If I bought five puzzles at a yard sale, those five puzzles went on separate

9 lines of a spreadsheet. I don't do that any more. I know pretty much about puzzles. So now if I decide to try with a new wholesaler, if I decide to try a new product, I will track every single product from that new line for a few months. Until I get a sense of yes, this is working. Yes, I'm making profit. This is a good thing. Then I'll stop tracking it. They're a little bit concerned. Because you re talking about ten thousand dollars in inventory at Kohl's. How do you track every single item you buy? I'm thinking maybe what you re saying is that you do that in the beginning, but that you don't necessarily track every single inventory item now. Right? Right. We don't do it in the furthest detail that we used to, like what you're talking about. But what I am always tracking is sales. Let me explain that a little bit. Imagine starting with one item. Nailing down that one item and then moving on to the next item. And nailing down that next item. We have a system in place here where every two weeks, we go back and make sure that those items that we're currently buying and have a dedicated budget toward are still selling at the pace that we predicted. It's not complex. We're not doing daily reports on our inventory, or anything like that. What we are doing the purple toasters, for example. It's very easy to go into your Manage Orders and check on your purple toasters. And see how much they're selling for, what price point they maintain and how many you sold over a two week period. Those are the items that we're concerned about, because those are the items that we're basing our gift card buys off of. That very consistent inventory that we can go in every day and buy. Kat, you asked me before, Brett, don't you go buy at the sales all the time? You know, the big sales that go on all the time and everyone rushes towards and then floods the market. Not typically. If I can find a way to maneuver some great deals, I'll do it. But a lot of my inventory with Gift Card Engineering is based on those foundational items that we tripped and fell and kind of stumbled upon, by scanning everything in the world that's at the store. Mainly my mother-in-law, because she's awesome. I would glaze over and fall to the ground. She was so good at it that it helped us to build those items into our inventory. We are always making sure that they're still selling. Because if I go into our inventory and notice that we now have sixty-four of them and we've only sold one this month, we're not going to dedicate the money to it any more. That's how we track a lot of our numbers. Okay, now are you using Outright, Mint dot com, Inventory Lab for that? It sounds like if you're looking at how many are in stock and how many you sold in the last month, that sounds like something you would find in an Amazon report. Yeah. That's from an Amazon report. What Mint helps me do, Mint helps me know my overall budget and what I'm spending at each gift card place. Awesome. You can make dedicated categories on Mint that let you know how much you're spending at each place. I like that. I just archive it and then Mint is a smart system so it learns my typical buys. My wife actually is in charge of it. She knows my numbers and how to categorize it into the right place. So I'm able to say, This month we spent seven hundred dollars on Target gift cards. What was our return on these items? Then whoever is buying them for us has to tell me what they bought and we have their receipts. So we kind of check up to make sure that it's still working. Okay. Excellent. That's what they were asking for. How do you find all those numbers? Excellent. Thank you. And we're ready...i can't believe we're ready this fast. You guys need to ask more questions. We're here, I promise! Step Five. Step Five. Step Five everyone's favorite! They want to do it first, but unfortunately, it's the last step. Outsourcing. When you're talking about Gift Card Engineering, what actually becomes your biggest constraint is your time. When you're increasing your gift card buying, you can't be at every retail store all the time. This is one of the few times that I will say, have someone do the shopping. Bring someone on to do the shopping for you. But, you don't just buy someone a TJ Maxx card and say, Good luck, grandma! I hope you find some great stuff. Here's the app. Let me know how it goes. What you're doing is you're saying, Okay, you're going to buy four purple toasters. You're going to buy three of these, four of those. And here's your route. Here's the stores, here's where they're located. If they don't have this, buy this. Very, very executable steps. That's how you have

10 someone do the shopping. Now eventually, that person will become very good at the shopping. Like my mother-in-law. She's phenomenal. A hundred million times better than me. But that's because we had executable steps when we first started. Then she learned it and became better than me. And I love that she's better than me. But when you have someone do your shopping, you need to know your typical return on investment for that store. If you don't know that, you have no way of knowing if they're doing their job. You don't know. You don't know if they're going in there for two minutes and then getting a couple things and saying, Well, that's all they had. Where's my money? You need to know what you typically get from those stores. I had someone doing my gift card buying for a while. But now that we do it in such large volume, I actually have a couple of my own account reps at these gift card places. So they deal directly with me. It doesn't take a lot of my time, so I don't mind doing it. Plus, we're talking substantial parts of our budget, so right now, I'm not comfortable with outsourcing my gift card buying, but it's very easy to have the person you had over the store to, eventually to do the gift card buying as well. Then if you have your processing outsourced, too, there's not a lot that you are doing besides checking the sales. I'll offer you a step by step on that. You train someone to do the shopping. That person gets it down. They have it down pat. They know what they're typically spending. You say, Okay, here's who we typically buy our gift cards from. Just make sure that you're buying from them on a monthly basis. Here's... Either cash that we use, or if it's a family member that you trust, giving them a debit card. However you want to do it. Cash would be a little tough, because we use Craigslist too. So you probably would have to use a credit card or something like that if you feel comfortable with the person. Only do it if you feel comfortable with the person. I definitely wouldn't recommend it unless you're very, very close to them and you would trust your kids with them. I like that once you hand over the gift card buying to them, you're not really overseeing a lot at that point any more. That s what you're always trying to do is remove yourself from the situation. So if they're doing the gift card buying, and the shopping and then they drop off to whoever does your processing, guess what? You just automated that process. There's no such thing as a hands-free business, but that's about as close as you re going to get with Amazon. The cool thing is and we talked about this a little bit before - you can actually negotiate a better margin on gift cards if you set a monthly buying agreement with someone. So for example, if you want to try to get Kohl's at a fifteen percent discount, you'll buy a thousand dollars worth a month. But never, ever go into an agreement like that unless you know that you're actually going to spend the money. I only do those types of agreements if I know that my number is way below what I typically spend at the stores. So like Kohl's, we know we spend a lot. But I would never agree to do like ten thousand dollars. What I typically say is I never sign anything, I just do a verbal agreement - We are always buying from you. We'd love to do an exclusive deal with just you. They love to hear that and know that you're not going to be jumping around to their competitor. I'd love to just buy from you. What is the maximum discount you can give me, where you're still making money and you're happy with it? They'll be honest. Most of the time, they'll be honest and they'll say, Here's my number. You'll say, Wow, that's awesome! That s a win/win situation. Wow. You can keep going, but I've got questions for you too. I'm ready. I'm good. Okay, first question was, What is the typical purchase price of the items that you buy at these places? I'm not sure there's a...do you aim for a certain price that you re buying at or selling at when you're talking about buying at these retail outlets with gift cards? Let me see if I'm understanding it right. Is this person talking about buying products at the stores? Yes. Yes. Buying the products. We typically don't buy anything that...if you looked at my Seller Central report, our average selling price of an item is thirty dollars. So if that can give you an indication of what we typically look for Over the thousands of items that we've sold, our average selling price is thirty dollars. So that means that we're probably

11 getting those items anywhere from five to ten dollars. Great price point. I'm always encouraging my folks to go around that level or higher if they can. Okay, second question was, How do you use gift cards at Kohl's if you need to use your Kohl's card to get an extra discount? I was thinking the same thing at Target. If you use your Red card, you get five percent off. And I don't see any way of stacking that five percent plus the gift card. So you just have to go with the larger discount, right? Right. Exactly. The key to this is to always be assessing the situation. There's not a one thing fits all, This is the only way to do it, the only way to make money. You have to be able to assess, what's the better deal? The cool thing is, you could take advantage of that five percent with your Target Red card or your Kohl's credit card and buy something else when that sale is not going on. That's the beauty of the gift card. It's constant. It's not up to the store. When it's constant, you notice less competition. You have less competition on those products. Because people notice the sales when they're going on and they want to take advantage of those things. It's a limited time offer. So you're going to have a flood of supply hitting the market. But when you have the gift cards constant, nobody really knows what you re buying with those gift cards, so your competition is much lower. Absolutely. That's fantastic. They're liking this. They want to know where your website is for couponing. I believe your Coupon Engineering course is part of the PAC course now. But if they want to connect with you outside the PAC, where would they connect with you best, Brett? Bret: Maybe I'll do something with Jim where we can connect. I know he has the coaching thing going on right now. That would probably be the best way to do it. Wait. That's awesome. So if you're interested in talking to Brett, one on one, Coaching at Jim Cockrum Coaching dot com. Or call that 800 number For now, that's probably the easiest way to get there. This is a whole new thing for me. The only thing I've ever heard of before is Gift Card Granny. I thought I should do that. But the idea of using it for all of your retail arbitrage is just brilliant. I really like that. And like you said, using it on top of the clearance, on top of the sales, on top of the coupons, all that kind of stuff, excellent! Question by Robert Jameson. Interesting. Do you know of a place where you can check the info on a gift card to see if it's real and valid? Can you call the store to check if a gift card is real? Good question, Robert. Yeah. Those are great questions. Let's say you're buying a card off of Craigslist. It's a store by store policy for how you check their gift cards. TJ Maxx, you have to actually very annoying you have to go into the store. The cash register has to tell you how much it's worth and then you can confirm it that way. So if you're buying from someone, you have to go into the store to confirm it. There's no other way. If you re doing Starbucks, you can just go online. Get the card number and then verify it. Most people won't give you the card number unless you've already bought it. Because then they have no way of protecting their value. Good point. Unless they're smart like my friend, Janelle. Or Robert, as Brett said, buy it with a credit card. Buy it with Paypal. Especially if you're on ebay. Then all you have to do is contact them and say, This didn't work. I want my money back. Another way to hedge against anybody trying to pull a fast one on you. What I do if I'm buying a larger gift card, anywhere from four hundred to probably seven hundred dollars, I will go to the store and just ask them for a new gift card. So I have a new number, a new code on it and there's no way for anyone to go online and use my number that they had and they knew. I do that right away with the bigger cards. Okay, let me understand that. So, if you bought a card on ebay from somebody that you hadn't bought from before, and it was a five hundred dollar gift card and you were a little unsure you would take that card that you got from that buyer, go into the nearest TJ Maxx or Target or Kohl's or whatever and say, I would like a new gift card with this balance attached. Correct. Okay. That makes sense. That way, in case it doesn't get spent for a week or two, you're not

12 waiting for a week wondering, Hmm, is this going to work or not? Fantastic. Yeah. You go to check out and the person says, There's nothing on this card. Yeah, that would be embarrassing. Great. Wonderful ideas. Lots of good comments in the chat room. We're getting close to the end, so if you guys have more questions put them out there. Brett, how did you get started in all this? How did you find this idea? Like I said, I've seen it a couple of times and said, Yeah, that looks interesting. And just kept walking on by, but you've dug in and turned it into a wonderful way of doing all this. Where did you find all this? Honestly, I don't remember. I was trying to think of all that when I was writing this webinar out. I don't remember where I got this. I remember I got Coupon Engineering from watching Extreme Couponers. Gift Card Engineering - I think I was reading a finance book about how to cut down on your expenses and they said, Oh, you can buy discounted gift cards for your groceries, for this and that. And it just kind of dawned on me, Oh my gosh. I should be using that every time we're spending thousands of dollars at those stores. I got so excited about it because if you just think about it this way: Let's say you re able to spend ten thousand dollars a month. Your typical discount is fifteen percent. Our average is closer to twenty percent, but let's say this person doesn't have that budget yet and theirs is fifteen percent. On ten thousand dollars, that's fifteen hundred dollars. You've already made fifteen hundred dollars, just from the purchase of the gift card. Amazing. If you do twenty thousand or thirty thousand, you're talking about almost a full time income, just based on the margin of the gift card. So that's the kind of difference it can make. But it's all based on, can you spend it on the right products and get your products turned and using money to make more money? I love it. In the chat room, they're going, Brett is such a great out of the box thinker. I think that's the difference between somebody who really digs in, because like I said, I had been exposed to this idea, too. I kind of looked at the idea, patted it on the head and said, Yeah, that's an nice idea. I'll deal with you later. And moved on. You passed that idea by and said, Oh, look at the possibilities. And turned it into a whole new revenue stream. I'm really impressed. Very, very cool. Finding something and just going with it. Brett's thoughts on gift cards for restaurants? Yeah, I'm thinking you can't really sell those on Amazon FBA, so why not? Yeah. Look, there's another whole business side of this. If you're a person...i've tried to get access to cards. It's hard for me to understand where these gift card companies get their cards in such large volume. If you're a person that has access to people who have tons of gift cards, sell them on ebay. These things sell all the time. People are always shopping for these. It's another little business. There's so many different businesses out there to do. Just make sure it's worth your time and that you are getting a good return on investment. If we're talking about restaurant gift cards, the opportunity I see there is, buy it, research what it's typically closing at on ebay, offer to sell it for that person or buy it straight from them and you have your margin. Right there you made money. You didn't have to go buy the product. That's amazing. I want to remind everybody that Gift Card Engineering is a little different. As Brett said in the beginning, you have to spend money on this one. Versus coupons where you're saving it. But I want to take you back to where he said he started. When he bought his first fifty dollar gift card for Kohl's. Now of course, he's talking ten thousand dollars a month and you re all going, Aaahh! But remember, he started at fifty dollars a month. So if you know you're going to spend fifty dollars this month at Kohl's, you know that, go buy your first gift card and get a fifty dollar card for thirty-five or forty or something like that. Get started and track your progress. One more thing, What is the minimum discount that I should buy this card at? Great question, Jean. Is it worth the hassle for anything less than ten percent, Brett? Yeah. It's not a hassle, it's pretty easy. If you're consistently buying from a place, three percent over time, that's three dollars in your pocket. Why not? Why not do it? It's right there.