Can you really make money flipping phones?
To find out, I sat down with pro cell phone flipper Jeff Duhon from the Smart Flippers Facebook group. In a typical week, Jeff resells 20-30 used iPhones with a target profit of $100 per flip.
If if you did half that volume, you could be earning $1000 a week.
Flipping phones for profit can be a lucrative side hustle or grow into a full-time income stream, but, like any business, there are some pros and cons.
The used cell phone industry is already huge, and growing bigger all the time. Estimates project the global market for secondhand phones to be worth between $39 and $52 billion by 2025.
Here’s how to carve out your piece of that massive pie.
Tune in to The Side Hustle Show interview to learn:
- How to source profitable inventory
- The easiest places to resell your phones
- How to not get scammed
After all, being able to go out into the world and find profit is a skill to recession-proof your life.
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How to Find Phones to Flip
“Right now, what’s working best is Facebook ads,” Jeff told me.
However, if you want to start on the lower end with a small budget, Jeff said you can find a lot of good deals by just looking on Facebook Marketplace.
You may have to look outside of your city, and the bigger the city the more competition there is going to be.
But Jeff said you’ll be able to find phones on Facebook at a price you can flip them for profit if you look.
In fact, Jeff said he often sees phones listed for sale for much less than they’re worth. In those cases, he’ll message the seller and offer above the asking price to stand out from the crowd.
I asked why sellers would settle for less than fair market value, and Jeff said there at least a couple contributing factors.
First, people expect their phones to depreciate significantly in the first year or two of ownership. If they’re not active on Marketplace or eBay, they may not know the actual market value.
And second, sometimes people just need cash in hand quickly vs. waiting and trying to sell their device for top dollar.
How to Know the Value of Used Cell Phones
With so many different models of phones and carriers, it’s hard to know how much a phone can sell for when you’re starting out.
In Jeff’s case, his direct buyer provides a constantly-updated price sheet that lists all the models of phones and how much they’ll pay for each depending on the condition.
If you’re going to resell locally it’s a little more tricky.
You’ll need to look at the market, see what demand there is, take into account if a new model is about to be released, and scour the Internet to get an idea for what price the phone you have is selling for.
For reference, take a look at eBay completed listings or the current prices on Swappa.
Using Facebook and Instagram Ads to Buy Used Phones
Posting Facebook ads to find used phones is working great for Jeff. If you want to do this, the best part is that you don’t even need a highly polished-looking ad.
“If you were to make an ad for buying phones and it looked too nice, you’ll probably get bad results,” Jeff told me.
Jeff simply posts a picture of himself holding a phone, lists what types of phones he’s looking for, and targets certain demographics. Think the ubiquitous “We Buy Houses” signs posted by real estate investors, except for phones.
Jeff has become so good at running ads for used phones, he and his partner have also taken on clients and run ad campaigns for them, too.
“When you have someone approaching you for a price — as opposed to a whole city — you have a little bit more bargaining power,” Jeff explained.
The call to action for the ads is “Message for a Quote”, and those messages go straight to him. He ends up getting messages for $2-6 each from qualified sellers, and expects to close a deal on around 1 in 10 of those.
This works out at about $25 in ad costs to acquire a phone to flip, but Jeff mentioned that those leads could easily cost double in a bigger city. If your messages are costing over $6 apiece, and your close rate remains at 10%, you’ve having a lot of your potential margin eaten up by ad costs — and you still have to factor in drive time to go meet the seller and get the phone.
Is Instagram Better Than Facebook to Find Sellers?
Jeff explained that in some larger cities, Instagram has a better audience for buying phones.
Why’s that? Jeff’s theory is that many Instagram users don’t use Facebook at all, so they don’t have access to Marketplace to sell their phones.
This means they’re less likely to see other high dollar “comps” listed and you can often negotiate a better price.
Tips for a Call to Action and Closing Deals
For a call to action, Jeff uses “Get a Quote” as his button. When someone clicks that, they automatically get a message and are in his DMs.
Jeff also puts his cell number on the ad so people can just click it and call him. Not everyone is comfortable putting their number out there like that, but it’s worked well for Jeff.
It helps to have some standard questions prepared when running ads. This will save time going back and forth finding out about the phone.
The main questions Jeff asks are:
- Are there any issues with the phone?
- What carrier is it on or is it unlocked?
- How many gigs of storage does it have?
With answers to these questions and knowing the model of the phone, Jeff said he usually has enough information to make them an offer.
He said most sellers are honest, but you should always carefully inspect the phone when you go to pick it up.
Checking the IMEI Number
A good security tip is to check the IMEI number on a phone. This is the International Mobile Equipment Identity number, and it tells you everything you need to know about the specifications of a phone.
It will also notify you if the owner had payment issues on the phone, if it’s been stolen/lost, and anything else that might be a red flag.
Jeff uses a site called Sickw, which costs around $0.30 to run a quick check on IMEI numbers.
If you’re going to be driving a long way to see a phone, Jeff said you should ask the owner to give you the IMEI number so you can run this check before you leave.
Sometimes the seller makes an innocent mistake about how much storage the phone has or the exact model it is. Since these factors can have a big impact on the price, it helps to know everything about the phone before driving and seeing it in person.
Buying Phones That Aren’t Paid Off
When you check the IMEI of a phone, it will tell you if the phone still carries a financed balance.
Jeff said you can buy phones that still have balances outstanding, but you have to be careful.
If the original buyer decides to stop paying the installments, there is a chance the phone will be blacklisted by the carrier.
Different carriers have different rules regarding how quickly they blacklist a phone and how much they need to be paid back not to do so.
This is also one of the advantages of selling to a direct buyer. Jeff said he thinks they ship a lot of the phones overseas and it doesn’t matter if they’ve been blacklisted in the states.
How to Mitigate Risk When Buying Phones to Flip
Jeff told me that one thing you can be certain of is that if you buy a phone and find out later there’s something wrong with it, there is a “zero percent chance you’ll get your money back.”
Doing an IMEI check will cover you on most of the things on the “front end” but there are some problems that can arise on the “back end.” For instance, the seller could report the phone as lost or stolen after they sell it. In those cases, the carrier may end up blacklisting the device, making it inoperable in the US.
All you can do here is try to be the best judge of character you can when dealing with someone.
Another important thing to remember is to make sure the seller logs out of their iCloud or any other apps on the phone before you take it away.
Otherwise, you will not be able to log in to perform a factory reset on the phone without their passwords.
You need to have some street smarts, too. Most of the time you’re going to be paying cash for the phone, so don’t meet in remote places outdoors.
Jeff always likes to meet people indoors and doesn’t say what car he’s driving. He’s never been robbed, but it minimizes the risk.
Can You Source Phones Online?
For a while, Jeff was buying phones from all over the country and having people ship them to him. After all, this is essentially Gazelle’s business model.
But he said that people were trying to pull scams and he was having to make too many request chargebacks through his credit card company.
Because of that, Jeff prefers to meet people in person so he can see the phone for himself. (He’s willing to drive a long way to do so, too, sometimes up to 2 hours for the right deal!)
Where to Sell Used Cell Phones for a Profit
When flipping phones, you have a couple primary options on how to resell them:
- Sell them individually to another end-user
- Sell them in bulk to another reseller, also known as a “direct buyer”
1. Flipping Phones to Individuals
Selling used phones locally and to individual buyers online can usually fetch higher prices, but there’s more work involved. You can sell on:
- eBay
- Facebook Marketplace
- Craigslist
- Swappa — this is where I’ve bought my last several phones. As a seller, you can get great prices, but the site doesn’t have nearly the traffic that eBay or Facebook does.
Jeff said he’ll often list his new inventory locally on Facebook Marketplace for a couple of days. The problem is if you have several phones listed, you may have a few thousand dollars of capital locked up in inventory that you could be using to do more deals. There is also the possibility that the phones are going to go down in price.
If the phones don’t sell quickly, he’ll take those listings down and activate Plan B, direct buyers.
2. Flipping Phones to Direct Buyers
Jeff operates as a “middle-middle man” for the most part. He sells used cell phones in bulk to “direct buyers” for them to list individually and sell on.
Working with direct buyers, on the other hand, is simpler. You can still get good prices for your inventory and ship multiple phones to one location.
A direct buyer Jeff uses and recommended is Atlas Mobile. They also provide the price sheet he works from with up-to-date prices for hundreds of used phones. Make sure to inspect your inventory — they only pay you for the phones after looking at their condition.
(Jeff cautioned doing a random Google search for direct buyers; instead recommending you find a trusted buyer from others in the industry.)
To ship his phones, Jeff recommended PirateShip for great rates and low cost insurance.
What’s the Worst Case Scenario?
The worst case scenario in your phone flipping business is when you buy a phone that turns out to be worthless.
One of the worst deals Jeff had was when he sent a friend to pick up some phones for him. As an Android user, he wasn’t familiar with iPhones. The $750 iPhone 11 Pro Max he came back with turned out to be a pretty obvious fake — and a painful, 100% loss.
A Day in the Life of a Phone Flipper
A typical day for Jeff starts early and he tries to have a deal lined up before the sun rises.
Depending on how many leads he has, most days he’ll have an idea of where he’s going to pick up phones.
Jeff also takes a look at Facebook Marketplace to see if he can find some good deals. He also spends some time responding to messages and checking on his ad campaigns.
Jeff stops at 4.30 pm to spend time with his family. He said this is prime time for finding good deals, so if you’re free and single you might have an advantage there.
What’s Next?
Aside from phone flipping, Jeff has spent a lot of time recently creating a course. He also manages ad campaigns for clients.
You can find more about his services over at FlipMorePhones.com. Jeff has also been building the Smart Flippers Facebook Group that you may want to get involved in.
Jeff said his goal is to reach a point where he’s teaching more people, and he’s having them send phones to him from around the country as he scales up his business.
Jeff’s #1 Tip for Side Hustle Nation
“Be willing to work for it.”
What Else Could You Flip for Profit?
Cell phones certainly aren’t the only items you can flip for a profit. If this business model appeals to you, here are some similar ideas to consider.
Suggested Playlist: Flipping Profits
Buying low and selling high is the fastest way to multiply money. Here's how to get it done.
Flea Market Finds
Rob “The Flea Market Flipper” Stephenson is a professional “money multiplier.” By buying low and selling high, the guy repeatedly turns $100 into $500 … or more!
I love hearing Rob’s awesome stories about the random stuff he finds and flips for big gains. And he’s turned it into a full-time, 6-figure business!
Check out my interview with Rob to learn more, and his free training on how to get started.
Mattresses
The rise of the “bed-in-a-box” industry has resulted in an entirely new side hustle: picking up and flipping mattress returns. When customers aren’t satisfied with their purchase, they can get their money back.
But what happens to the mattress? Companies like Sharetown specialize in “reverse logistics” to pick up those bulky items and either donate them or resell them on secondary marketplaces.
For Sharetown reps, it’s risk-free inventory as long as you have the ability to move and store the mattresses.
Used Books
There’s an entire industry set up around flipping books. One guest of mine reported earning up to $4000 a month re-selling used books.
Clearance Items
Another flipping business to explore is clearance arbitrage. In this model, you’re simply buying discounted items locally, and reselling them for a profit on Amazon.
Here’s a free mini-course on how to get started.
Raw Land
Side Hustle Show guest Roberto Chavez reported earning $10,000 a month in cash flow from his unique land investing side hustle. He described his process to acquire vacant parcels on the cheap, often from distressed, out-of-state owners, and re-sell those on monthly installment plans.
Get your free Land Investing Launch Kit (normally $97).
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Another great site to ship with is parcelpath.com – we use them all the time and they have commercial USPS as well and also they have USPS flats for under 13 ounces