How I made $400 flipping Xbox One, PlayStation 4 game consoles
The time is upon us. Every 5 to 8 years we get the joy of a new video game console generation. This fall we’ve seen the release of the PlayStation 4 and Xbox One, and according to our 2013 Game Console Survey it seems gamers will line up en masse once again to bring these technological marvels home — iffy economy be damned.
This holiday we wanted to find out if we could resell Xbox One and PlayStation 4 and make a quick buck. Turns out, we could.
Our colleague Keith snagged preorders for PlayStation 4 and Xbox One, and we were able to sell both for a combined $415 gross profit. Score.
We started by tracking the median "buy it now" selling price of both systems on eBay. It’s not an exact science — we used a combination of eBay’s sorting options and figures from eBay aggregator thepricegeek.com — but here are the results.
Let’s break it down by console.
eBay selling price: $610
Gross Profit: $210
Launch Date: Nov. 15, 2013
Sell date: Nov. 9, 2013
The PS4 was launching first, therefore it had the shortest window to sell. We debated back and forth on the best method for maximizing price. Keith and I initially thought it’d be most fun (and rewarding) to wait ’til after the system launched to sell. Our thought was that the marketing/PR buzz surrounding the launch of the highly-anticipated PS4 would influence prices and cause a spike on the secondary market. Having experienced my fair share of console launches I quickly labeled this a risky proposition.
First, we’d completely miss out on the presale market, which is full of the most die-hard gamers out there. These are the guys who missed out on a preorder but are savvy/knowledgeable enough to know that snatching one on eBay at a premium is still a better value that standing in line for 3 days at Best Buy hoping to grab a unit, and a billion times better than dealing with the post-release bedlam on eBay and Craigslist. Essentially, they’re prepared to spend a premium price and don’t mind doing so. This is the type of buyer we want.
Listing on eBay
Listing items on eBay is almost a crash course in search engine optimization (SEO). For the best results, you need to look at your competitors, analyze trends, and dig into some data. I looked at a bunch of recently posted listings as well as a selection of sold listings for Playstation 4. I made sure to keep track of popular words I kept seeing in different listings (keywords) that were selling for decent prices.
The first set of popular keywords I noticed were what I’d expect: "Sony", "PlayStation" and "4." From there it got a bit more interesting. Although ever major online & retail outlet offered preorders, there was a huge volume of listing mentioning Amazon. Luckily for us, our preorder was through Amazon. Score.
Another trend involved delivery. While some sellers were simply listing the preorder for sale, some were selling the actual unit, which I thought was weird so far from launch. It seems some sellers wanted to receive the unit, then ship it to a buyer, while those selling preorders were essentially selling the rights to the preorder and changing the Amazon shipping info to the buyer. If I were a buyer, I’d rather buyout the preorder than wait for the seller to get the console and have them ship it to me. I’d want to play it on day one, and this seemed to be the trend on eBay as well. After "Amazon", "Launch Day Delivery" was the second most-common non-PS4-related term on the listings.
I have my preorder. I have my terms. Now it’s time to craft the title of the listing: Sony PlayStation 4 Amazon Launch Day Delivery.
I elected to keep "preorder" out of the title as I didn’t see much benefit from our listings I reviewed. Plus the headline was getting pretty long.
The price is right
Here’s the crucial part. Price is tricky when it comes to items like this — the market is totally unpredictable. Having done some research, I saw some trends.
On Nov. 4 the PlayStation 4 was fetching a fairly impressive $623.18. That’s over $200 above MSRP. We planned to post the listing the following day (Nov. 5) and felt like we could test the market a bit, so we put the priced extremely high — $650.00. Though the median was far less, we were seeing listings going for $800, $1,000. Not many, mind you, but enough for us to think we could come across an easy mark.
We elected on a 3-day "buy it now" listing. EBay, of course, recommends bids, but we didn’t want to deal with the uncertainty of an auction, plus many PS4 auctions were netting substantially lower sale prices — I saw one go for $550. $550 — a paltry $150 markup! We wanted the absolute most we could get and our profit potential would only improve (or so we thought), as more buyers jumped on eBay to fight over the relatively low volume of available preorders. It sounded like a good financial plan at the time.
For our description, I’m not ashamed to say I cribbed the best parts of various listings and threw them together. I wanted to make sure the buyer was aware they were bidding on a preorder, and to ensure day-one delivery, they’d have to respond with payment and their address in a certain time frame. As I said, much of this was already covered in other listings, so I jacked it.
We figured an upward spike was imminent. Boy, were we wrong. By the next day prices had crashed to $605. Ouch.
Our $650 price tag was looking more and more ridiculous. Over the next few days we monitored selling, median and new listing prices to make sure we were more in line with the market. We kept flirting with the median price, staying $10-15 above, until Amazon hit us with a curve ball.
To meet shipping dates, Amazon has to lock in shipping addresses a few days prior. In our case, this meant that if we sold a preorder past a specific date, Amazon wouldn’t allow us to change the shipping address to the buyer, and the buyer wouldn’t receive his paid-for console on release day. I could just see the scathing negative review that would go up on my profile. This couldn’t happen. This wouldn’t happen.
Amazon threw us a curveball.
Amazon’s cutoff date to change shipping addresses was Nov. 11. Cool for us, since our listing was only 3 days and would conclude with us diving in a Scrooge McDuck-like pool of riches on Nov. 8.
The day eBay stood still
On the 6th, median prices fell and fell, and so did interest in our listing. It was a weird time. Prices were dropping and the volume of listings was getting thinner and thinner. We stubbornly kept our price at $624.99 while they continued to tumble. I think everyone was scared of the impending Amazon cutoff date and simply wanted to dump the consoles for whatever they could get. But we weren’t about that life. Then, something amazing happened.
Huzzah! Defying all logic, we got a buyer at $624.99 — a good $24 above the median selling price that day. This was a victory — until the bastard didn’t pay us.
I sent the buyer multiple emails, gave him a solid 24 hours to respond. Mind you, we still were hitting up against Amazon’s shipping address window, so all this waiting was costing us precious time.
After his 24-hour window, which was thoroughly defined in the listing description, we axed him. After all our meticulous planning and research, we got stuck with a flakey buyer. What went wrong? How can eBay not address such a glaring flaw in their system? As it turns, out, we forgot to elect for eBay’s immediate purchase feature. This option requires a user to pay in full before the listing is taken down and considered sold. Fail on our part.
We sold our unit. But the buyer didn’t pay. Now what? We couldn’t report the buyer yet — eBay makes sellers wait until the listing window expires before one can submit a complaint — so we were stuck. Plus, we didn’t have time to wait; we wanted to sell this thing before we lost the ability to change shipping address through Amazon. We also ran into another snag.
For the original listing we used a relatively new eBay acct, which means we had a limit on how many postings we could make in a given time frame. As you can imagine, our limit for the month was one. Great.
In a pinch, I contacted a friend of mine who’s a longtime eBay aficionado and he was kind enough to let us re-list the PS4 on his account. We copied and pasted most of our original listing since it was already well-optimized and ready to go. We did re-evaluate price. In the day we spent waiting to hear back from our original "buyer", prices had jumped to almost $636. But we were in a time crunch and made the decision to sell under the median and get the thing out the door. We settled on $610.
We posted the new listing on November 9th at 3:12pm.
2 minutes and 19 seconds later I get the following text…
In 2 minutes and 19 seconds we made $610 — $210 of that being gross profit.
On that day, we won the Internet.
Come back soon to find out how our Xbox One flip turned out!