Lesson 1: Gift Card Marketplaces for Beginners

What are gift card marketplaces?

In a nutshell, they are places where you go to offer up your gift cards for sale directly to potential buyers.

Buyers use the marketplaces to shop for the best gift card deals they can find which is usually based on the size of the discount from the card’s face value.

A card’s face value is how much it is worth when used at a merchant’s store. The discount is how much you are prepared to mark your cards down to sell. Usually, the less in demand a card is the larger you have to discount it to sell. The more popular a card the smaller your discount has to be.

Multiply the number of buyers, sellers, and cards by several thousands, and you have a marketplace complete with competition and the laws of supply and demand for different brands of cards.

Just like a real a market, except instead of groceries, the products are gift cards of varying denominations from different merchants.

How does selling on gift card marketplaces compare to selling to bulk buyers?

As with most things, there are pros and cons.

Some of the things I like about selling direct on a marketplace are:

  1. I can optimize my prices to get the highest profit. I am in control of what prices to set and when to sell them. If a card is being sold by too many other sellers, the discounting can sometimes be very high. I can choose to hold back until the supply thins out, and then list my cards with a smaller discount to maximize my profits.
  2. You can often sell a card and get paid for it within a week. This depends on the card and the discount you offer, as well as how quickly the marketplace you pick processes the payment.

What I like less are the fees charged by a marketplace which can be quite high at around 12%-15%.

This fee is charged after any discount you offer your buyer. For example, if you have a $100 gift card and offer a 10% discount, the buyer pays the marketplace $90. If the marketplace’s fee is 15%, then you will be charged 15% of $90, or $13.50. Your final earning will be $90 – $13.50, or $76.50.

This is why you need to buy your cards for as little as you can, and when you turn around to sell them, you need to get as low a fee from the marketplace as you can.

Leave a Reply