Sell Your Cell Phone Upgrade For a Profit

iPhone 4 Bumper + Universal Dock w/ DIY AdapterPlease enjoy this guest post from Stephen at CellSolo.com.  Stephen blogs about selling cellphone for profit and the latest trends in the smartphone industry.

Smartphones are advancing quickly, and your mobile device can accomplish just about anything that your home computer can. Every month there are new cell phones on the market that are thinner with technology that has been advancing at a rapid pace. Most cellular subscribers are eligible to upgrade to a new cell phone at a subsidized price once every two years. Apple releases a new cool and trendy iPhone every year… who wouldn’t want to upgrade as soon as possible? But, do you really need the newest cell phone and all those fancy features?

Yes it would be nice.  However, you don’t need the newest and best phone. Although it seems to be the norm to keep up with today’s current trends in phone technology, the average consumer probably won’t use the most up-to-date features. Last month the new iPhone debuted with a better camera, faster processor, and fingerprint scanning security. Previous iPhones already take pretty damn good pictures, they are fast enough for to run any app, and already have pin number security functionality.

You can easily get away with upgrading your cell phone once every four years instead of once every two years and will still have a phone that will keep you entertained on your daily commute to work on the subway. Some of you may have already figured this out… Did you know that not only will you save money from holding off, but you can also make some extra cash from not upgrading your personal phone?

Simply put, you may not have a need for your phone upgrade, but someone else does. If you are happy with your current cell phone, consider buying a new phone from your wireless store with your upgrade, and then reselling it on eBay or Craigslist.

Sell Your Cell Phone Upgrade for a Profit

The first step is to determine which cell phone is currently most in demand and most popular amongst consumers. This will allow you to create the largest profit margin from your phone upgrade. It’s a safe bet that the newest iPhone is going to be worth the most money. Check on eBay and Craigslist to see which phones are selling the fastest.

Once you have figured out which cell phone is currently worth the most money, head over to your local wireless store. If you’re a Verizon customer go to a Verizon store, if AT&T then go to an AT&T store, etc… Tell one of the representatives in the store that you want to use your upgrade to buy a new phone. Specify which phone you want, based on your market research.

Gaming the System

This next step is very important. Tell the employee you want to purchase the phone with your upgrade, but that you don’t want to activate it immediately and you would prefer to buy the phone in its original wrapped box. Cellular employees are trained to setup your new phone for you to make your life easier. They will normally open the phone for you, link your phone number to it, and transfer all of your personal data. You want to avoid this so that you can sell the upgraded cell phone as a brand new and unopened item.

You will have to purchase the phone at the subsidized price. This means that the phone really costs a specific amount of money, but your wireless carrier will sell it to you at a heavily discounted price as long as you renew your contract for an additional two years. After another two years you will be able to upgrade to a new phone and renew your contract again.

Now that you have bought your brand new cell phone, don’t get too comfortable with it. It’s time to sell it on the open market. You will get the most money from selling on eBay or Craigslist. I personally recommend Craigslist because you won’t have to pay transaction fees. However if you’re nervous about meeting someone in person to make the exchange, you can sell it on eBay.

Pricing Your Phone

When you resell your brand new phone, make sure to sell it for the full price which should be several hundred dollars more than the subsidized price that you bought it for. This will create a nice profit for you. Your profit margin should equal the full price you resell it for minus the subsidized upgrade price you paid at the cellular store.

That’s all it takes, not difficult and not too much work. As a real world example here is how I approached this situation. Last week one of the lines on my family plan was eligible for an upgrade. The phone in use was an iPhone 4s, which was sufficient enough and still is a great phone so I didn’t think there was a need to upgrade. Instead, I used the upgrade and bought a 16 GB iPhone 5S for $199. I then resold it on Craigslist for $675.

Keep in mind, if you use your upgrade, you will not be able to upgrade at the discounted price for another two years. You will be allowed to buy a phone from your wireless carrier at full price, but not at the subsidized price. If you’re worried about breaking or losing your current phone, make sure you have insurance on it.

Have you ever thought about using the strategy to turn a profit?  Have you ever sold a cell phone on craigslist or ebay?

 

 

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Comments

  1. I always wondered how that was done, thanks they are always telling my wife she is eligible for an upgrade.
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  2. I’ve actually done this 3 times in the last few months. I had a couple of coworkers “sell” me their upgrades and I made a few hundred bucks off of each one. I did the same with my own phone, turning over an HTC One and hanging on to my iPhone 4s for the time being. It’s well worth the effort!
    FI Pilgrim recently posted..November In Review – Income/Expense And Net WorthMy Profile

    • This is a great idea. If you know anyone that has an upgrade that they don’t plan on using you could make some quick cash. I’m guessing you paid your coworkers to use their upgrade. For example, if someone you know has an upgrade, you can offer them $100 to use it. They upgrade to a new iPhone for $199 and give the new phone sealed in the box to you for $300 ($199 upgrade plus $100 you offered.). Then you take the new iPhone and sell it on eBay for $600+ for a profit of at least $300.
      Stephen@CellSolo recently posted..How To Erase All Content And Factory Reset Android DevicesMy Profile

  3. This is interesting, and definitely a different way to make some extra money. May have to look into this for our next upgrade!
    Laura @ RichmondSavers.com recently posted..Amazing Deal: Spend $75 at Amazon and Get a $25 Amex CreditMy Profile

  4. Great idea! I’m going to have to try this the next time I’m eligible for upgrade!
    Dee @ Color Me Frugal recently posted..5 Financial Tips I’ve Learned from BloggersMy Profile

  5. My tech obsessed brother could never wait long enough to do this but for the average jane or joe, this a great idea! Plus, keep in mind that cell phone insurance may not be ideal for one to pay for… you can generally get a second-hand iPhone 4s for instance, for about the same price as an insurance replacement, considering that an insurance replacement costs $199 now in addition to the $15/month to have it.
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  6. Fascinating…
    Mike recently posted..Peer-to-Peer Investing Default AnalysisMy Profile

  7. This is actually brilliant! If you consider that people do this all the time when they sell their rights to buy stocks (called options), then it makes a ton of sense. I’ve heard of something similar where employees in the auto industry will sell their employee discounts for buying a new car. Once again – making money from something intangible that you own! :)
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