Many people have heard the term flipping in relation to homes, but they may be less familiar with the concept of phone flipping. This is when a person purchases a phone at a certain price and then sells it at a higher price to earn a profit.
Phone flipping uses the tried and tested concept of buying low and selling high that has driven commerce for ages.
In this article, we’ll explore phone flipping in more detail with useful tips to improve your profit margins.
Which Phones Offer the Best Profit Potential
The first thing you need to realize is that certain popular models sell much better than others. You need a fast resell to make a profit and reinvest it into a new model. So, it makes good financial sense to focus on the phones you know can sell faster.
The phones that are currently in demand are Apple iPhones and Samsung Galaxy Android models. If you focus on these brands, you can minimize your risks until you learn more about flipping phones.
Many professional phone flippers won’t touch a phone, if they can’t make a minimum $50 or $100 in a future sale. Adopting this ethos at an early stage is a good rule of thumb when you’re starting out too. The profit margins are incredibly important and simply buying a phone at a lower price to make a very modest profit is a waste of your time.
For example: let’s say you purchase a phone for $30 and you sell it for $60 and make a profit of $30. At first glance, this seems fine, but you need to factor in the negotiation, listing and delivery times too. If it takes you around 3 hours to complete a sale from start to finish you only made $10 per hour!
Related reading: The Easiest Things to Flip for Profit
How Much Money Can You Make Flipping Phones
The best way to evaluate the earning potential of every specific phone model you sell is to track the sale and record the data in a spreadsheet. You’ll need to track key details, including:
- The purchase price
- The selling price
- Where you sold the phone
- The device model and specifications
- The selling fees
- How much time you spent on the phone sale
- The profit margins
- Your earnings per hour
When you track this data for each phone sold, you’ll start to see areas where you can make efficiency improvements.
To maintain success, you’ll need a stream of phones to buy, and that can take time to source. After all, you’ll have competition for the best phones and these competitors are going to work hard to beat you to the best selling models. You may need to carry out some research and do a little legwork to find reliable sources of phones to sell.
When you have a reliable supply of phones, you can make a part-time side hustle into a full-time income. There’s potentially no limit to the number of phones you could buy and sell to make a healthy profit.
If you can start selling 5-10 phones per week with a $50 profit margin, you’ll have a solid foundation to reinvest in phones to sell. Doubling and tripling that number of phones sold can be a challenge, but there’s a possibility to grow quickly and turn this into a profitable business.
That said, the upfront costs can be considerable and investing in those first ten phones may be cost prohibitive for many people.
So, you may have to start smaller with one phone and grow the business slowly by reinvesting the profits into the next phone. If you’re persistent, this will pay off. But it will deter impatient people that blow all their profits.
Where to Find Phones to Flip
There are many places to find phones to flip, here are seven of the best options to try:
If you diligently monitor the local Craigslist listings and you can meet the higher asking prices for indemand phones, you can find models to sell. Some sellers are willing to negotiate and it’s possible to score a good deal if you have the cash in hand.
But, there the risks of scams are high on Craigslist and similar platforms. So, if you’re meeting face to face, do it in a public area and always take someone with you. Don’t hand over cash unless you’re absolutely sure that you’re getting what you’re paying for.
2. Physical Locations
Check your local area for pawn shops, used electronics stores, flea markets, thrift stores and other places that may have used phones to sell. These locations will price their phones to make a profit and in some ways you could consider them to be your competition.
That said, you can still find bargains and you may even be able to work out a deal where you sell their phones for a commission. This will cut into your profit margin, but if you’re just starting out it’s a good way to get some inventory to sell.
3. Facebook Marketplace
Develop your network of friends, family and work colleagues and periodically ask them if they have used phones to sell or if they know someone that wants to sell a phone.
You can even set up a dedicated Facebook page to buy and sell pre-owned phones. Make sure you join local groups that sell items to find suitable phones to sell.
4. Recycled Phones
You may have seen phone recycling boxes in local stores and there’s nothing to stop you doing the same thing (you’ll need permission from the store owners). Contact local retailers to see if you can place your own custom free phone recycle boxes at their location.
You can donate a portion to their chosen charity to encourage people to recycle their unwanted phones. You’re likely to get a lot of older models that are not suitable for reselling, but these can be recycled. But, you will get some models with decent profit potentially and this is a low risk way to grow your inventory.
5. Online Marketplaces
We’ve already covered the more prominent online marketplaces to source profitable phones. But, you can find even more private sellers in a number of smaller selling apps.
It may be tempting to use eBay too, but the sellers there tend to have a good knowledge of their phones’ worth and this will degrade the potential for good profit margins.
6. Launch a Phone Buyback Site
When you’re well established as a phone reseller, you could even start your own phone buyback site. A visitor can input their phone details to get an offer and a printable shipping label can be automatically generated for them.
This is an efficient way to get good phones to sell and take your business to the next level.
Things to Check Before Buying Used Phones
When you purchase a phone to flip, there are eight important things you need to check. They are:
1. The IMEI Number
This is critical because you want a phone that’s “clean.” This refers to the standing of the phone with cell providers and it proves that the phone is not stolen. The best tool to check the IMEI number is the Swappa IMEI Checker because it’s extremely accurate.
Before you meet with a seller ask them for the IMEI number and then double check the number when you meet to buy the phone. This prevents a bogus seller from making a switch from a clean IMEI number to a blacklisted or stolen phone they want to sell. If the seller cannot give you an IMEI number, walk away because you don’t want to buy a blacklisted or stolen phone.
2. The Price
When you buy a phone, check the current prices on Swappa to see what they sell for in various conditions. Take away around $10 for the listing fee and another $15 for shipping and you’ll have a good idea of the selling price.
Always remember that PayPal will take a 3% cut and this should be factored into your calculations. If you check the recently sold phones on Swappa, you can see the final sale prices which will give you a realistic selling price. Now you can evaluate the potential profit margin of a phone before you choose to buy it.
3. The Screen
At first glance the screen may seem fine, but it should be tested with multiple taps in different areas to ensure there are no dead pixels or dead zones. It’s tempting to buy a phone with a cracked screen to repair it but in most cases it isn’t worth the effort. Cell phones have become so complex that simple screen changes are a thing of the past unless you really know what you’re doing.
If you’re thinking of flipping a phone with a cracked screen on the main Swappa marketplace, forget it. But, they do have a section known as the “Boneyard” where a phone with a cracked screen can be sold for parts.
4. Test Wi-Fi/Bluetooth Connections
Connect the Wi-Fi to a personal hotspot or open Wi-Fi network to test the phone. The Bluetooth can be checked with a connection to your car Bluetooth or a pair of Bluetooth headphones.
In almost every case these tests work, but it’s worth getting into the habit now to spot any non-functioning phones.
5. Microphone and Speakers
If you say “OK Google” or talk to Siri on an iPhone, you’ll quickly learn if the microphone and speaker are working as intended. The quality should be crisp and clear and if the quality is bad, walk away from the deal.
6. Test the Cameras
Test the front and back camera with pictures and video to make sure they work. Don’t forget to try the flashlight too and turn it up to make sure it’s nice and bright. The quality of the pictures and video should be good if the cameras and lenses are working properly.
7. Check the Buttons
Every button on the phone exterior should be tested to ensure that they work. Some buttons may be sticky or even unresponsive if they have not been used in a while. Most newer phones have fewer buttons so this check will get easier every year.
8. The Battery and Charging Port
The seller should have the charging cord, or you can bring one to test it. If a phone won’t charge, there may be a problem with the charging cord. If you adjust the charging cord or swap it out for a new one and the phone still won’t charge, don’t buy it.
When you purchase a used phone, it’s pretty normal to have a buildup of dust and dirt in and around the charging port. This can be cleaned away with a quick blast of compressed air.
Will You Repair Broken Phones?
If you can repair broken phones to resell them, you’ll maximize your profits. A reconditioned phone can be sold in a “like new”, “pre-owned” or “good” condition easily. But, there is some risk. Certain components can be expensive and a “simple” repair could take longer than anticipated.
Remember that your time is valuable and if you can’t repair a phone quickly, it will eat into your profit margins. If you’re not confident making repairs, it’s easy to cause more damage and this will increase the repair costs.
For these good reasons, many phone flippers avoid buying, fixing and selling broken phones entirely. If you’re keen to explore this route, you’ll need some basic repair skills, a reliable part supplier, and a phone repair kit to get started.
Where to Sell Used Phones for a Profit
There are four main options to explore when you’re looking to sell a used phone for a healthy profit: private buyers, online marketplaces, online buyback stores, and local stores/kiosks. These four selling options have specific pros and cons to consider.
1. Private Buyer
- The selling prices tend to be much higher.
- The sale can take time.
- The risk of scams is higher.
- Some sales require an in-person meet and complex negotiations.
- There’s no guarantee that the sale will even take place.
2. Online Marketplaces
- The selling prices are usually higher.
- Access to a larger marketplace.
- It may take a while to secure a sale.
- The seller fees will cut into your profit margin.
- Creating a listing can be time consuming.
- There’s some potential for scams.
- There’s no guarantee of sale.
3. Online Buyback Stores
- The sales are instant and guaranteed.
- Payments are fast.
- This shipping is usually free.
- The selling price will be lower.
4. Local Stores/Kiosks
- The sales are instant.
- You can pick up cash on the same day.
- The selling price is lower.
- There’s no sale guarantee.
- You may be offered store credit in lieu of cash.
- There may be no store nearby.
How to Package a Cell Phone for Safe Shipping
In theory, you could use any postal carrier to ship a sold phone, but many sellers prefer to use UPS or another courier for faster and safer shipping. As a professional seller, you should include the following 4 things when you ship a phone.
1. Priority 2-Day Shipping
When a customer has paid hundreds of dollars for a smartphone, they won’t want to wait up to a week to get it in the mail. If you offer priority 2-day shipping, you’re likely to sell more phones.
2. Signature Confirmation
This is an important feature to protect you and the customer. When someone needs to sign for the package, the courier cannot leave it outside their home where it may be stolen. This feature only costs a few dollars and it’s well worth the extra peace of mind for both parties.
3. Good Packaging
The phone should be in its original box (if possible) with inserts. The box needs to be wrapped in several layers of bubble wrap.
If you don’t have the original box, place the phone and the other accessories in separate sandwich bags and then wrap them in bubble wrap. Then find an appropriate sturdy box with no extra space for the contents to slide around in transit.
If there are any spaces, fill them with some plastic filler, rolled newspaper or more bubble wrap. Use packing tape to seal the box and make sure that the delivery address is clearly visible.
The phone should always be insured for the full selling price for transit to the customer. Always get a tracking number and a receipt from UPS or the courier you choose. You don’t want to lose an expensive phone because you decided to save a few dollars on insurance!
Frequently Asked Questions
Yes, phone flipping is completely legal, you’re purchasing a device and then reselling it to someone else for a price that you’ve both agreed upon.
Yes, flipping phones can be profitable if you carefully choose the phones you want to buy and sell using the advice in this article. In fact, flipping phones has become a lucrative side hustle and full-time business for many people.
Yes, but this is not a get rich scheme and it takes time and effort to make this work as a side hustle. If you want to be your own boss, you can earn extra cash flipping phones and it can even be turned into a full-time business. When you flip phones, you can learn about running a business, how to sell, marketing and other key skills that can be valuable if you want to develop a career in sales.