Hi, this is Neil Waterhouse.
Today I want to talk about different ways
you can quickly generate frequent flyer points with eBay business
however, you can also use some of the same strategies
for many other types of businesses as well.
As well, I want to share with you
some of the fun things you can do with frequent flyer points.
These days’ frequent flyer points can be used
not just for purchasing plane tickets or upgrading flights,
but you can also use “convert” them to go on things
like cruises with your family
as well as convert them to gift vouchers for places like
JB hi-fi, David Jones and many other stores.
There are many strategies for accumulating points as I will show you
including how you can purchase inventory
from almost anywhere on the planet,
even if they don’t take credit card
you can still rack up frequent flyer points
and still get up to 55 days to pay.
I will show you how in a second.
First of all, there are many different credit cards out there
which offer many different types of frequent flyer points.
And there are also many different frequent flyer programs.
Personally I use Qantas.
I am not going to say what I do
is the absolute best combination
as the market is always changing.
It's almost a full time job trying to keep up
with the latest and greatest offerings.
My preference for frequent flyer programs is Qantas
however, I am definitely not saying this is the best program,
however it is a program which I’ve been using now
for probably over 20 years.
For credit cards, today my favourite
is the Black ANZ Frequent Flyer card
as with this card you get a Visa
and also a bonus American Express card.
Before this card, I used to have an Amex platinum card
and that cost me around a grand dollars a year
however, the ANZ card has almost the same features
including travel and hire car insurance.
This rocks if you travel to places like the US
where the insurances to hire a car
cost more than the hire car itself
and takes forever to fill out all the insurance papers
when you walk up at the stand to take your car.
The ANZ American Express card gives you
1.5 points for every dollar you spend
and the Visa card gives you .7 of a point
for every dollar you spend.
This may not sound like a huge amount
however overtime it really can grow.
If purchase your inventory with the card,
pay overseas staff, all your sundry expenses
like petrol, accountants, phone bills,
Internet, office expenses, car expenses,
insurances, etc, they really do add up.
If you are drop-shipper, almost all the suppliers
will accept credit card.
If you purchase inventory from any other supplier
who does not accept credit card,
you can use companies like Octet finance,
who will pay your suppliers for you,
and then you can pay Octet finance via your credit card.
This allows you to pay almost anybody on the planet by credit card.
Companies like Octet finance will charge you
a merchant fee of around 2%
however this is not much in the scheme of things as I will show you.
If you are an importer, you can also use the companies
like Octet finance to pay your overseas suppliers.
The bonuses of using companies like this
is you get up to 55 days to pay your credit card
and of course you get the frequent flyer points too.
So . . . Why is 2% cheap?
For a start, the 2% is paid by your business out of PRE-TAX dollars.
As opposed to whenever a business owner takes out any money for
personal use, they have to pay income tax.
For round numbers and keep the maths easy,
Let’s say you want to take out say $1,000
from your business account to purchase a new television.
On top of the $1,000, you will have to pay income tax
based on your tax rate, on your personal tax rate.
If your personal tax rate is,
say $.40 on the dollar,
you will need to pay an additional $400 tax
meaning you will really be taking out $1,400
If you have been racking up the frequent flyer points
by purchasing inventory like just mentioned,
and you have accumulated say $1,000 worth of frequent flyer points,
you can simply convert the points to a JB hi-fi
or Harvey Norman voucher
and go get the TV without spending a cent.
Or you don't have to go to the shop,
you can do it all online these days.
Most frequent flyer points
will not allow you to convert points to cash
however, you can convert them to a gift vouchers
to places like JB hi-fi, Harvey Norman etc
David Johnson, whatever
and then you can purchase items
like Apple iPads etc and then resell them
for cash.
If you are a drop-shipper,
you can just list items from those places
and when they sell, you can go online
and purchase the items using your gift vouchers
and have them deliver straight direct to your customer.
Again without you spending a cent.
If your goal is to just to increase your eBay margins,
this strategy works very well
as you can calculate exactly
how many frequent flyer points you get
when you purchase any inventory
and then you can add that amount onto your margin.
This is a great way of adding more margin to every sale
and most of your competitors will not know what you are doing.
The first step of choosing
which frequent flyer program has the best rewards
and which credit card gives the most points.
Just be careful though, more points does not always mean better rewards.
Bottom line question for every credit card you are looking at is,
how much do you have to spend on your credit card
to get say a $100 gift voucher from somewhere like David Jones
and what is the yearly fee?
It’s very very important to crunch the numbers.
That’s all this week
If you are watching this video anywhere else besides my blog,
please, come on over to NeilWaterhouse.com
for more eBay hints, tips and goodies.
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and let me know if your collecting frequent flyer points now
and what you do with them.
Love to hear back from you.
Until next week, list more, sell more, this is Neil Waterhouse.