Comment by pocket_cheese
2 years ago
I am a gift card reseller. Pretty much, there are marketplaces where you can sell gift cards and cd keys for games and when a customer places an order, I make an API call to procure that item and deliver it.
Currently at 70k Euros a month. It took me about 3 years to get here. And it took a few months to get to 2k monthly revenue.. However, the first two months I was at break even and it took me about a year before I could figure out how to get this system running profitably. Currently profit margins are about 7%
Have you had any issues with the authorities or law enforcement? Are you planning on shutting it down once you reach a certain figure? (I ask, since this seems very risky!)
I only go to authorized distributors, where the brand themselves has approved the vendor to resell the cards. For game keys, I haven't done anything in bulk, but the best route is going directly to the publisher and getting permission, but this requires large order commitments and game prices fluctuate too much and can be super risky.
My real biggest risk though is when I open up my own store is chargebacks. Digital goods have a very very high chargeback risk, and I need to be clever on how I mitigate that!
How does this work exactly? Are you doing arbitrage?
Often left unsaid in the "gift card" (or, "game key reseller" market) is that the items are acquired illegally and resold for a profit. This is money laundering territory, and is very easy to run afoul of the law.
Fraudulently obtained inventory is actually something I actively want to avoid. I don't want to go to jail, or risk getting banned from marketplaces - among ethical considerations.... I only go to authorized distributors where there is legal permission to resell these types of items. Incomm being the largest. Blackhawknetwork being another large player.
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Correct! customer buys a playstation $10 card for $9.80, I buy it for $9.20, and pocket the spread.
What is the wholesale source for the gift cards and CD keys?
There's a bunch of shady ones that I avoid, and the really big legal ones are blackhawk networks and incomm. Becoming an official distributor requires a lot of vetting from their side though, so it isn't like any joe blow can apply and get approval.