- Hi Guys, Neil Waterhouse.
If you have a drop ship business,
and your not paying for your stock or your inventory,
using your rewards card,
you're leaving money on the table.
Most drop ship suppliers these days
do accept some kind of credit card,
whether it's Visa or American Express Card.
And, there's so many credit cards which
offer reward points.
And, these reward points can be used
to not just get free flights,
but, you can also convert them
to a multitude of other things,
like cruises, gift cards from places like JB Hi-Fi,
Myer's, David Jones, et cetera.
And, from there, you can swap points
for iPads, computers, televisions,
and you have tons of other stuff.
And, then from there,
you can sell those items for cash.
Now, because the credit card market
is continually changing,
with new offers, continuously being offered,
by the card companies every year,
and almost every month,
and, almost sometimes every day,
I get one of my team to crunch the numbers once a year,
and try to figure out
from the multitude of cards out there,
which credit card will give us the most points
in the next 12 months.
I'll share that with you in a second.
Now, if you're not familiar
with calculating which cards
give the best frequent flyer points,
it's not as simple as you first might think.
Here's a few things worth noting.
First of all, we only use Qantas frequent flyer points.
And, of course, there's many others out there.
There's Virgin, and you know, a ton of other ones.
For us, Qantas works for us and that's what we use.
To give you an idea of how much you can earn,
let's say you have a drop ship business
doing say, 50K per month.
Every 12 months that's 600K.
Which can give you say, 600,000 frequent flyer points.
A hundred dollar gift voucher
from JB Hi-Fi costs 17,600 Qantas frequent flyer points.
So, if you convert 600,000 points
into hundred dollar JB Hi-Fi gift vouchers
that's around three and a half thousand dollars
worth of gift vouchers per year.
Now, don't forget, the total cost of this
is just the yearly membership of the card
and, some credit card companies
will wave the first year.
(mumbles) eighty bucks (mumbles) from there.
So, anyway, those maths I just used,
those maths were based on a one to one ratio,
of spending one dollar on your credit card,
and getting one Qantas frequent flyer point,
but, you can actually get much better
than one point per dollar.
Currently, American Express Platinum Card is an example.
It gives you three frequent flyer points per dollar.
Most frequent flyer cards also offer incentives for joining.
For instance, the ANZ Black Visa Card,
gives you 120,000 points just for joining,
as long as you meet their criteria.
And, you know, also when you pay
your suppliers by credit card,
you get up to 55 days to pay.
Now, with credit cards, a general rule,
you normally always get more points with American Express,
compared to a Visa card, however,
not every supplier, of course,
will accept American Express.
You need to, obviously check, you know,
with each of your suppliers.
If you're researching credit cards yourself,
here are a few things to take into account.
The first is, if you spend one dollar on your card,
how many reward points do you get?
Do you get one point per dollar,
or one reward point per dollar?
Or, do you get only half a point
for every dollar that you spend?
Or, do you get three points?
And, the next trick the credit companies like to play
is, you know, what is the conversion ratio
of their reward points to a Qantas frequent flyer point.
So, what I mean by this is,
if your credit card company gives you
say, one reward point for every dollar you spend,
can these reward points
be converted one to one to Qantas?
Many times, you know, this is not the case.
You know, some credit card companies,
they require two points
for every one Qantas frequent flyer point.
Where as, you know, other credit card companies,
you know, they got a one to one ratio.
Now, the next point is,
do they have a cap on the amount of points
they'll give you per statement period?
Some cards, you know, might just say one point per dollar.
You know, for every dollar you spend,
up to, say, seven and a half thousand points,
per statement period.
Where other cards have no cap.
And, then, of course, there's the yearly cost.
However, the yearly cost of the card
should be (mumbles) paid for
by cashing in the reward points.
So, yes, it is quite confusing
trying to figure out exactly
which credit card gives you the most points.
You know, and there's no one fits all card.
As it (mumbles) comes down to,
how much you spend each month
and, how many of your suppliers
will accept American Express.
Many drop ships suppliers
will accept Visa these days
but, don't write off American Express.
It's always worth asking.
And also, make sure you also research
what other business expenses do you have
like maybe a phone, software, et cetera,
that might also accept American Express.
The bottom line is,
the credit card we've chosen this year
is American Express Platinum Card
and, the ANZ Black Visa card.
But, gang, this won't be
the perfect solution for everybody.
Also, if you're researching,
check out the Qantas Visa Card.
It's definitely worth checking that one out.
And lastly, always check with your accountant about
what you can personally use
frequent flyer points for.
That's all for this week.
No matter where you're watching this
please scroll down,
leave me a comment down below.
Until next week, list more, sell more.
This is Neil Waterhouse.