This transcript was generated from the episode audio and may contain minor errors.
[Music]
If there's one thing the world needs more of, it's more cell phones, right? I guess probably not. I think the world actually has a lot of cell phones. If you're like me, you probably had a number of cell phones in your life. And when you upgrade a smartphone in particular, when you upgrade your iPhone or your Android smartphone, what do you do with the old one?
Many of us trade them in, knowing that we aren't getting a great deal, but just not wanting to hassle with an alternative. Well, today's listener is hoping to profit from this problem, identify a gap in the marketplace, perhaps. They're wondering how they can, well, as I said, profit from the problem. How can they buy and resell phones, potentially giving customers more money for that phone, but then of course, also being able to make more money themselves. So is this feasible?
How should they proceed? That's what we will analyze in this episode, right after this message from our sponsor. [Music]
Hi, Chris, this is Charlie from St. Louis and I'm a long time listener, first time caller. Speaking of phones, I recently upgraded my iPhone and wanted to trade in my old one to Apple, but the price they offered seemed really low.
So I decided to shop around and heard of a site called Gazelle, where you can buy and sell used phones. I thought that would be great, but their buying price was also pretty low. I ended up selling my phone on Facebook marketplace and got at least $50 more than I would have from selling to either Apple or Gazelle. It got me thinking, since they don't pay market value, couldn't there be some way to arbitrage this? I can't compete with big companies, but if I can specialize in selling locally or otherwise, providing some kind of benefit, I'm thinking there's a way to make it work.
What do you think? Am I missing something? Thanks, Charlie. [Music]
All right, this is an interesting opportunity here. Thank you so much for the great question and thank you as well for pointing out this opportunity.
So first of all, when you are upgrading your phone, generally speaking, let's consider the hierarchy of options for dealing with your old one. And most of us have probably gone through this in one form or another. Like we have got the new iPhone after having the previous model or whatever the comparison is on the Android side. So option one, leave it in the drawer forever. Okay, and don't do that, by the way.
I've done that probably multiple times, not with my past couple of smartphone purchases, but I remember the early days of the iPod. Remember the iPod? Any other old people out there like me? I had multiple iPods that I was really excited about that got a new one and then left the old one in the drawer. Never really figured out a good way to do something with it.
So don't do that. Number two, resell it to Apple if it's an iPhone, of course. So they have a program where when you're upgrading your phone, they will purchase your old one. Now they're not gonna give you a great rate, of course, but they'll give you something and they'll either recycle it or resell it depending on how old it is and its condition and so on. Number three, you can resell it to a service like Gazelle and that's what our caller mentioned.
So if you haven't seen Gazelle, it's gazelle.com, G-A-Z-E-L-L-E or G-A-Z-E-L-L-E.com. So they're in the business of buying and reselling old phones and probably some other stuff too. So they will also buy your phone and they will probably give you a better price than Apple would, but it's also not going to be a great price. And number four, the fourth option is to resell it yourself, and you're reselling it directly to somebody who will use it through some form of online platform usually, whether it's Facebook Marketplace, like you heard in the message or OfferUp or Craigslist, eBay, Gumtree, whatever it is, you're reselling it yourself through some kind of online platform. And that's where you're gonna make the most money and just notice a key point here, the more effort you undergo, the more you make when you resell your phone.
Okay, so there's a price being paid for convenience. It's easy to just give it back to Apple. It takes a little bit more work to sell it to a service like Giselle, but it's still pretty simple. They will even send you a box, I think, if I'm not mistaken or whatever it is, they'll make it really easy. And then of course, if you're gonna resell it yourself, then you have to go through the process of listing it and communicating with the buyer, then shipping it out and all that kind of stuff.
So you make more money doing it, but there's a price for convenience. So all that is from the consumer perspective. I just wanted to start with that. Now let's look at it from the side hustle perspective. There probably is a way to make money here.
It's a renewable market. People are always changing and upgrading their phones. Even when there's a poor economy, people are going to invest in their smartphone. And companies like Apple and even other large resellers like Giselle will never be able to capture all the market 'cause it's such a huge market. So the challenge and the opportunity is though, here's the thing, how can you buy people's phones for a price that they accept and that's low hassle, right?
Because the reason people are selling them to services like Giselle is because they make it easy. So you have to make it as easy as possible. And you also have to buy those phones at a price in which you feel you can comfortably resell them for a good enough profit margin. Okay, so there's a lot more we could say about that part. But just to kind of tie up the question, it might be as simple as putting up flyers in a busy neighborhood or posting on a service like Nextdoor.
There could be a lot of ways you do it. But one way or another, that's the problem you need to solve. So reselling the phones is the easier part. Like if you have a source of incoming phones that can be consistently listed for sale on one of the platforms, then you're all set. So if I were doing this, I would focus my efforts on the supply side.
Like how can I acquire more phones to resell at a good enough rate that I'm going to profit? I hope that is helpful. Good luck reselling phones, anybody out there. Listeners, if you've got a question or a scenario, something you're struggling with, something you're trying to figure out, if you're trying to figure out your idea, whatever it is, let me know, come to sidehustleschool.com/questions. Continue to roll these out every single week for the rest of the year.
Who knows? Perhaps on into next year as well, but we shall see. So again, sidehustleschool.com/questions. Thank you so much for listening. You can subscribe wherever you get your podcasts.
My name is Chris Guillebeau, this is Side Hustle School. [Music]
From the Onward Project.
