How to Start an Online Business Using Gift Cards
Thinking about how to start your own business from home but don’t know where to begin? We’re not going to lie—kick-starting and running a small business venture for the first time can be undeniably tricky. However, that doesn’t always have to be the case, especially when you maximize the power of the Internet, the potential of cryptocurrency, and an all-around platform like Paxful.
Here’s a simple guide on how you can start your own dropshipping business from home using gift cards bought on Paxful.
Things you’ll need for your dropshipping business
Like any other business, putting up your small online venture will require a few essential things such as:
🛒 E-commerce platform account
The first thing you’ll need is to prepare an account from your preferred e-commerce platform. You have lots of options here, including the most popular and user-friendly marketplaces in your country. If you want to reach a broader market, you can set up an account on e-commerce platforms like eBay, Amazon, or Shopify. You can also set up your online store and list your products and services on Facebook Marketplace if you’re more comfortable working with social media platforms.
If you’re in the Philippines, you can sign up for a seller account on Shopee or Lazada. You can also try Jumia, Konga, and other popular local marketplaces if you’re from Nigeria. If you want to build your own online marketplace, you can build an e-commerce website and have the freedom to create your own store template.
It’s very important to know the guidelines, customer support, fees and costs, marketplace traffic, and other rules set up and offered by the e-commerce platform you’re eyeing. Doing so will help you easily comply with the platform’s terms and conditions and also help you gauge if a marketplace closely matches your online business operations and needs.
You should also check if the online marketplace you’re eyeing offers paid subscriptions or membership plans. Subscription features often offer various benefits to sellers, such as promoted product listings, lower selling fees, more business tools, dedicated customer support services, customizable store homepage, and many more.
🧾 Payment processor account
The next important step you need to take is to create an account on the payment processor platform that will serve as your means of receiving payments for your products on the online marketplace.
You can try signing up for online banking to make transferring, managing, and tracking payments faster and more convenient. Apart from bank accounts, you can also try some popular and credible online wallets available in your area to offer more payment options for your customers.
It’s also ideal to create two separate payment processor accounts for your business. The first would be the principal or main account directly connected to your online store, where customers’ payments are received. The second account will serve as your wallet or fund storage. This is where you’ll send and keep the funds from your primary account. Transferring your funds from the primary account to the secondary account right away can save you from potential chargebacks.
☑️ Verified Paxful account
Once you have an e-commerce platform and payment processor, the next thing you’ll need is a Paxful account. This is where you’ll buy gift cards of different brands at discounted prices (up to 50%)—we’ll discuss this later on. If you still don’t have one yet, you can easily create an account for free. Signing up also entitles you to a free Paxful Wallet where you can easily store, send, receive, manage, and track your Bitcoin (BTC).
After signing up, be sure to complete all the necessary account verification steps. This includes confirming your email address, phone number, ID, and residential address. Verifying your account is essential, whether you’re using Paxful for personal or business purposes. Apart from allowing you to enjoy exclusive platform features and more suitable offers, it also boosts your credibility and trustworthiness as a crypto trader.
Besides the feedback and reputation scores and trade history, Paxful traders also look at a user’s account verification levels. So if you have a verified account—as well as high positive feedback scores and good trading history—your chances of grabbing competitive offers and having credible trade partners will increase without a doubt.
Here’s a quick video summary on how to create a Paxful account.
🛍️ Products you’d like to sell
Last but not least, you’ll need to strategically choose the items you want to sell. To power your dropshipping business with gift cards, we suggest selling products such as makeup, shoes, clothes, accessories, gadgets and appliances, home and office furniture, videogames, or gaming hardware as you can buy these items using gift cards. Here’s the best part, you can buy said gift cards in Paxful for up to half the price. This is where you’ll get your profit.
How to use crypto and gift cards to power your business
After ticking the boxes in your online business checklist, let’s now talk about how to build your online store from the ground up and make gift cards work for you using Paxful. Here’s how the dropshipping process would look in a nutshell.
➡ Setting up your online store
To make it easier for your customers to navigate your online store, you can include as many important details as possible. This includes photos, product name, description, item variations, condition—whether it’s new or used—and availability of the products you offer.
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The sales competition in online marketplaces is exceptionally high. One of the most effective ways to attract customers to buy your products is to give them competitive or marked down rates—the higher the discount, the better. Offering items with 10 to 20 percent cheaper prices than the suggested retail price (SRP) can grab customers’ attention right away.
Categorizing your products will also help your customers to navigate through your online store easily. Some e-commerce platforms also allow you to indicate whether your products are available for wholesale.
➡ Setting up your preferred payment method
Many e-commerce websites allow you to use third-party payment gateways, while some only accept built-in payment processors. Often, online marketplaces that enable third-party payment processors charge extra fees—another thing to watch out for. When it comes to setting up a payment method for your online store, it’s important to consider the most accessible options for you and your customers.
This includes banks, online wallets, and other secure third-party financial service providers. Keep in mind that you might need payment processors that are globally accepted, especially if you cater to customers outside of your country.
➡ Accepting orders from the online store
It’s important to confirm the receipt of your customer’s order. Doing this will let them know if the order they placed has pushed through. You can also consider accepting pre-orders to avoid shouldering the expenses should a buyer cancel their order. Another essential thing to include in your product information is the available shipping options and fees.
➡ Using the customer’s payment to buy BTC on Paxful
Once you’ve received your customer’s payment in your primary payment processor account, it’s better to transfer it to your secondary account to avoid the possibility of chargebacks. You’ll use this fund to buy fractions of Bitcoin on Paxful. There are over 350 ways to buy BTC on Paxful, including the most popular payment method in your country.
➡ Buying gift cards on Paxful
Paxful also allows you to sell your Bitcoin and get paid in gift cards from 125 brands worldwide. To use crypto in your online business, you can sell amounts of it for gift cards from specific brands at a much lower price. Let’s say a customer ordered cosmetic products from your store; you can buy a gift card with a value of 100 USD for a discounted rate of only 70 USD worth of BTC on Paxful. Note that it’s better to consume the gift card right away, so you can immediately check the gift card’s value or balance.
➡ Buying products with gift cards
For the next step, go to the online retailer’s website, load the gift card to your account, and buy your customer’s order using the gift card credit. Note that it’s better to ship the product to your address as many online marketplaces have strict rules about changing the shipping address and frequent changes might get your account banned.
➡ Shipping the product to your customer
Once the item is delivered to you, you then ship it to your customer right away. Don’t forget to update the product’s delivery status, so your customer will know its estimated date of arrival.
Applying the steps in real-life business process
Let’s say Jade (dropshipper) created an online store on a popular e-commerce site where she sells makeup and skincare products of a popular brand. To attract more customers in a highly competitive online beauty market, Jade sells her products at much lower prices and offers a 10 to 20 percent discount. She also signed up for a paid subscription to enjoy the platform’s exclusive perks for sellers and accepts transactions from the most popular and accessible payment options to make store purchases easier and more convenient.
Kate (customer) saw Jade’s online store and placed an order for an eyeshadow palette. Since Jade’s products have marked down prices, Kate got her makeup with a 15% discount. Jade receives Kate’s payment in her online wallet that is directly linked to her online store. To avoid potential chargebacks, Jade transferred the funds to her other bank account right away.
After that, Jade logs in to her Paxful account to buy Bitcoin using bank transfer. Once Jade has enough BTC in her account, she then looks for competitive gift card offers with a 20 to 50 percent discount and sells her BTC in exchange for the gift card of a popular makeup retailer. Jade then uses the gift card to buy Kate’s eyeshadow palette from the makeup retailer’s online store and waits for the item to be delivered to her address.
When the package arrives at Jade’s doorstep, she then ships it to Kate. Jade can earn a 5 to 35% profit from this transaction depending on the discount she got when she bought the gift card.
Are you ready to start your online venture?
It’s important to note that just like any new endeavor or financial opportunity with BTC and other digital currencies, gift card trading can also be tricky. That’s why learning the ins and outs of Bitcoin trading is a must if you plan to start an online business with gift cards. We’re pretty sure you’ll get the hang of it as time goes on.
Does this sound like something you would be interested in? Get your hands on crypto and gift cards through Paxful to kick start and grow your dropshipping business today.