Can You Start a Business Flipping Phones?
Have you ever wondered if you could turn a profit flipping phones? For the uninitiated, “flipping” is when you purchase a phone at one price, then sell it for a greater price (buy low, sell high). Here, we introduce you to the cell phone flipping business and presents tips for profitable flips.
|Did You Know? Flipsy Local helps you flip more phones at high margins. See how it works|
- Where to find phones to flip
- Which phones are the most profitable?
- Before you agree to purchase any phone
- How to identify a good deal
- Where to sell phones
- How much can you make flipping phones?
Where to find phones to flip
- Flipsy Local: This service sends local sellers directly to you. Once you sign up, your custom offers are delivered to people in your area who are actively seeking a buyer. Many will accept relatively low offers in return for same-day cash, which leaves ample room for significant profit margins. Sellers are pre-qualified and have already accepted your offer before they contact you.
- Craigslist: Monitor local Craigslist listings, and don’t be phased by high asking prices – private sellers will often come down on price if you have cash in-hand. However, keep in mind it’s possible to get scammed on Craigslist and other classifieds sites.
|Don’t get scammed! See how to avoid the most common phone buying scams Learn more|
- Facebook: Routinely ask those in your network if they have phones for sale. You can even set up a dedicated Facebook page for buying used phones. Join “rummage sale” groups to keep an eye out for phones.
- Other online marketplaces: Craigslist and Facebook aren’t the only places you can get phones; search around for marketplaces in which private sellers sell phones. Note: Ebay is typically not a good place to buy phones, as Ebay sellers usually know what phones are worth and leave little margin for profit.
- Pawn shops, thrift stores, flea markets, and used electronics stores: Pawn shops and the like often buy phones and sell for a profit, and could be considered your competition. However, you might be able to work out a win-win deal in which you do the work and you both profit. Remove their selling overhead and you might be able to form a lucrative partnership.
- Recycle phones: You’ve seen the free phone recycling boxes – why not make your own? Contact grocery stores, department stores, and other retailers to see if you can place a free phone recycling box at their location. You might even donate a portion of proceeds to a charity to motivate donations. You’ll get a lot of phones you can’t resell, but Apple, Verizon, and others will recycle them for you free-of-charge. Keep the profitable models to sell.
- Launch your own phone buyback site: You can create your own phone buyback site to automate the buying process. Visitors to your site can select their model, capacity and condition to receive an instant offer, and your site can automatically generate a printable shipping label. This is a powerful way to save time and maximize efficiency, though you’ll need to market your site to attract sellers. Software development companies like Near Tech Partners can help you plan and build your buyback site.
|Don’t get ripped off. Use our phone buying checklist|
Which phones are the most profitable?The last thing you want to do is buy used phones you can’t quickly resell for a profit. That’s why most phone flippers deal with iPhones: they’re always in demand, there’s always a steady supply, they’re easy to find, and they offer ample room for profit margins. Buy and sell iPhones to minimize risk while you learn the ins and outs of the industry.
|Phone profit margins: How much can you make? Get expert insights from pro resellers|
Once you’ve mastered iPhones, consider padding your profits by adding other phone models. Samsung’s Galaxy series phones are hot on the resale market, for example. Some professional flippers won’t buy a phone unless they can profit a minimum of $50 to $100 on the resale. That’s a good rule of thumb to go by.
Never underestimate the importance of profit margins. Just because you can buy a phone for less than you can sell it doesn’t mean it’s a good deal. For example, if you can buy a phone for $25 and sell it for $50, you’ll only make $25 for your time. If you spend three hours negotiating your purchase, acquiring your phone, listing it for sale, and delivering it to the buyer, that only amounts to $8.33/hour – less than minimum wage.
Study Flipsy.com to see which phone models offer good profit margins. Over time, you’ll gain a good sense for which models are the most profitable. If you think you’ve identified a good deal, check Flipsy to instantly know whether you can sell it for your desired profit margin. Check out our phone profit margins guide for a deep dive into how much professional resellers make. Consider condition and features
Another important consideration to make is the condition of the phones you buy – the better the condition, the more you can resell it for. You can sell broken phones, too, but you won’t get as much money (though you won’t pay as much for them, either). Always check Flipsy.com to see real-time market values for phones by condition, and read this guide to phone conditions to help you make real-world judgments.
Phone features can affect values as well; for example, higher-capacity models (typically expressed in GB) can command more money – but not always. In addition, color and carrier (Verizon, AT&T, Unlocked, etc.) also affect value.
Only purchase phones you’re certain you can resell
Phones that have been reported lost or stolen are likely locked – or worse, being tracked by law enforcement. Not only can purchasing such phones land you in legal hot water, you can’t sell them.
That doesn’t mean every locked phone is off the table, however. Phones can be locked for legitimate reasons, and locked phones can be legally sold. For example, some companies will buy the following types of locked phones:
- Finance locked: Phones people still owe money on
- Activation locked: Software like iCloud Activation Lock prevents phones from being activated on a new network
- Blacklisted locked: These phones have typically been reported lost or stolen, but they can still be legitimate. One scenario is when a phone is reported lost, blacklisted by the carrier, then later found by its legal owner
|Learn more about how to sell locked phones online|
Before you agree to purchase any phone:
- Check to make sure it has a clean IMEI and/or ESN or, simply contact a carrier and ask them to perform a check
- Make sure the phone is not currently under contract or financing (IMEI/ESN checkers should reveal this information, in addition to lost/stolen status)
- Make sure the seller has unlocked and turned off security features such as Find My iPhone, which can make it difficult or impossible to access the phone, reset it, or even sell it
- Make sure the seller has reset the phone to factory settings
- Do not purchase “jailbroken” phones – those that have been hacked by programmers
Will you repair phones?
One way to maximize profits is to buy broken phones cheap, repair them, and then sell them in “good” or “like new” condition. However, some resellers avoid broken phones because the practice carries risk: you could lose money if parts are expensive, if it takes a long time to complete a repair or if you cause additional damage. You can sell refurbished phones for good prices, but you need to be able to quickly and accurately make repairs – and still turn a profit – for this strategy to work. Proceed with caution.
|Want to repair phones? Learn how to enter the smartphone repair business|
If you’re going to repair phones to flip, at minimum you’ll need a good phone repair kit and a reliable, affordable parts supplier. Here are some options:
- iFixit Essential Electronics Toolkit
- Pro Tech Toolkit
- iWork Smartphone Repair Toolkit
- Olympia Smartphone Repair Kit
- Phone Parts USA
- Repairs Universe
- eTrade Supply
- Mobile Defenders
- Global Direct Parts
- Injured Gadgets
|Fixing phones? Want to know how much parts cost? Check out our phone repair guides|
If you do want to become a master repair technician, which could also present another money-making opportunity, most schools only last a few days. Read this article to find a list of schools you can compare.
Did you know? Many phones are worth $100+. Find the value of your phone.
|Become a master phone repair technician. Find out how much it costs and compare phone repair schools|
How to identify a good dealBuying low and selling high is the name of the game, so the best way to identify a good deal is to compare the selling price of a given phone to its current value on Flipsy, the “Blue Book of Phones.” Look up any phone on Flipsy and see its value by model, condition, capacity and carrier. With Flipsy, you can instantly see top offers from online buyback stores, how much the phone is worth on the private market and pricing history trends.
If the selling price is lower than the phone’s value and leaves enough room for you to profit $50 to $100 or more, it’s probably a good deal.
|Make sure you’re getting a good deal with our phone buying checklist|
Where to sell phones?Phone selling options include private buyers, local stores and kiosks, online marketplaces and online buyback stores. Each has its own pros and cons:
Generally high prices
No guarantee of sale
Local stores & kiosks
Same day cash
Less money than other options
Generally high prices
No guarantee of sale
Online buyback stores
Generally pays less than the private market
Of course, you want to get the most money for your phones; however, even though the private market pays the most per phone it’s not necessarily the best option.
|Did you know? You can sell broken phones for cash. Find out how|
Let’s say you’re able to purchase an iPhone 8 with the following specs:
- Condition: Good
- Capacity: 64GB
- Color: Space Gray
- Carrier: Verizon
You negotiate with the seller and get the price down to $150. You check Flipsy.com and learn the phone is worth $287 on the private market. So, you make the purchase and list the phone on Craigslist.
Hopefully you luck out and find a buyer within a couple of days – if not, you’ll probably have to list it again to keep it prominent in the “For Sale” listings. You might sell it right away, or you might wait weeks to find a buyer – if you find one at all. Even then, you might need to haggle on price, deliver the phone, invite someone you don’t know to your home, or take the time to meet at a neutral location (and hope they show).
This isn’t to say you can’t sell phones profitably on Craigslist, but it does mean each individual sale could be more hassle than it’s worth. At minimum, it’s fair to say you can probably expect to spend at least an hour selling each individual phone. The same is true for eBay, which will also incur a 10% selling fee plus PayPal’s 2.9% + $0.30 fees.
Alternatively, you can sell your iPhone 8 to a buyback vendor. You won’t get quite as much money per phone; however, you can complete your sale in about five minutes. Many vendors will send free shipping kits, so all you have to do is pack your phone and ship it.
Here’s how that breaks down:
$287 – $150 = $137
$281 – 150 = $137
$137 – $28.70 (eBay fees) – $8.62 (PayPal fees)
One hour per phone
One hour per phone
15 minutes per phone
Earnings per hour
As you can see, the fact that you can complete sales quickly via buyback vendors means you’re ultimately paid more for your time than selling to the private market, even though the private market will pay more for each individual device. This underscores the importance of inventory turnover and positive cash flow, which is covered in greater detail below. Suffice to say: with any business, time is money.
How much can you make flipping phones?The income you can earn depends on how many phones you can flip and your average profit margin. Be sure to track each device sale in a spreadsheet, including entries for:
- Device model and specs
- Time on the market
- How much time you spent selling it
- Where you sold it
- What you bought it for
- What you sold it for
- Your earnings per hour
If you can find a reliable supply of profitable phones – and you’re willing to make it a full-time job – there is no limit to the income you can make flipping phones. If you’re looking to earn supplemental income, you’re limited only by the number of phones you can buy and sell.
|See what real-world professional phone resellers earn in our guide to phone flipping profit margins|
A good goal to start with might be ten phones per week (two per business day) with an average profit margin of $50. At that rate you could make $500 per week flipping phones, which amounts to $2,000 per month and $24,000 per year. Double that to four phones per day, and you can make $48,000 per year. It will probably take you awhile to reach that volume – you have to build your supply chain – but once you do, you can expand your business exponentially.
Keep in mind you’ll need upfront cash to enter the phone flipping business. That means you might have to start small (ten iPhones could easily cost $2,000, after all) and grow your business slowly by reinvesting a percentage of the profit from each phone you sell.
The importance of inventory turnover and cash flowPhone flipping success depends on your ability to find a steady source of inventory and maintain positive cash flow. That means you need to consistently buy new phones and sell them fast. Inventory sitting on a shelf is a sunk cost: phone values depreciate over time, so it’s not worth holding onto them to try to get as much money as possible. Develop a system that enables quick turnover, even it if means earning less profit per phone, so you can maintain positive cash flow.
|Want more help? Get real-world insights from professional phone resellers. Learn more|
Think and act like a business, crunch the numbers, and be willing to put the work in to build your supply chain, and you can start a successful phone flipping business. Remember that great businesses operate efficiently, so use Flipsy’s free service to find private market phone values based on real-world sales data plus the highest-paying current buyback vendor offers from dozens of guaranteed buyers.
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