Home – New Forums Tell me straight… Starting a zero profit business solely for credit card points

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  • #996314
    johnnycashflow
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    I’ve just had an idea pop into my head. It’s a bit weird and unlikely. But I just wanted to get people’s feedback.

    I am able to get on average 5% discount from certain mainstream retailers.

    I was just brainstorming this idea of what about starting a website that passes this %directly onto the consumer. While I purchase it and get it sent directly to the consumer.

    So I make no profit except for credit card points.

    On the assumption that I have a steady flow of customers and the rep of the site is good. Why wouldn’t people want to save a few % on their purchases. Obviously assuming if trust isn’t an issue.

    By accumulating thousands even millions of credit card poibts. I could fly around the world and stay in the best hotels for free.

    The drawback is that I’d have to receive the funds as bank transfer into company accounts. This would probably scare most people off.

    What about if I setup PayPal which means 2% in fees ie discount goes down

    Or I could get my own merchant facility which means either I pay the fee or I charge a surcharge which means worse off for either buyer or seller.

    I can’t think of any way around it
    I could set up a shop front but that’s a big investment.
    I could take a 1% cut as profit but this makes the original deal poorer

    . Sorry everyone. Just brainstorming

    #1206737
    bb1
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    Would I go through a third party to make purchases just to get a 5% discount – NO.

    1. Trust (I know you mention if it wasn’t, but it will be)
    2. Ok my product doesn’t arrive, will you fix the issue for me.
    3. Trust
    4. My product is faulty, will you fix the issue for me.
    5. Trust
    6. with all of the loyalty schemes around, a lot of people can already get discounts.
    7. Trust
    8. I can get the points myself, so now I miss out on my flight (yeah I know they are a joke for the average consumer)
    9. It starts with T

    #1206738
    johnnycashflow
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    yeah thansk for your reply,

    removing the trust bit, the products come directly from the retailer, so the warranty and invoice etc is no differnet and I have no involvement

    however the trust bit is probably too signficant,

    I think this is only limited to my family and friends type of situation……..

    #1206739
    bb1
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    johnnycashflow, post: 245921, member: 79207 wrote:
    the products come directly from the retailer, so the warranty and invoice etc is no differnet and I have no involvement
    ……..

    Are you sure about this, my knowledge of consumer law is a little flakey, but my understanding from what you are planning, as I am purchasing from you (stated in your initial comment). My contract is with you, and not with the retailer, as such if something goes wrong my first port of call is you.

    #1206740
    ILS_GUy
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    I’m with Bert, 5% is very little incentive for the added risks he has pointed out.
    what you are proposing is like a cross between drop shipping and affiliate / referral sales.
    I think you would be better to come to an arrangement with the suppliers that you get a cut on every sale you refer to them. Not sure that would work for getting credit card points

    #1206741
    johnnycashflow
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    Yes totally agree guys. It’s like a affiliate and drop ship both in one.

    The idea was. The more I think about it the harder it seems to be honest.

    Taking you as an example. The item is worth 100 in the shops. Let’s say Myer for example. You pay me 95

    I pay with my credit card and I only pay 95. But I put the delivery address and invoice details under you and your email.

    Myer send you the goods and every body is happy.

    The Idea will work however the trust factor is probably the hardest.

    And yes I totally agree. It’s unlikely it will work :(

    #1206742
    johnnycashflow
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    bb1, post: 245924, member: 53375 wrote:
    Are you sure about this, my knowledge of consumer law is a little flakey, but my understanding from what you are planning, as I am purchasing from you (stated in your initial comment). My contract is with you, and not with the retailer, as such if something goes wrong my first port of call is you.
    To Be Honest I don’t know ins and outs of consumer law. But even if I made the process crystal clear to the consumer. It Wouldnt surprise me if the contract was between and me and you since you paid me…..
    #1206743
    JohnTranter
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    It’s actually quite a fun idea, although Bert has raised several issues.

    I’d also check the “Fair Use” policy on your credit card. You might find they cancel it pretty quickly if your business idea takes off.

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