Episode #29 - Taylor Thomas

#15MinuteFounder

In this episode of 15 Minute Founder, Taylor Thomas, founder of Arbitrage Card, breaks down how retail and online arbitrage sellers (the people buying from Nike, Target, and Sephora to resell on Amazon) are using discounted gift cards to instantly boost their profit margins.

Taylor walks us through how arbitrage actually works, the “crowdsourcing” network behind gift card sourcing, why brands discount their own gift cards in the first place, and the real pain points that stop most sellers from doing it.

Highlights from the chat

Q: Explain retail and online arbitrage like I’m five.

People buy products from retail stores (Nike, Macy’s, Target) or their websites, then resell them on Amazon for a profit. Retail arbitrage means physically walking into a store; online arbitrage means buying from the brand’s website.

Either way, sellers use tools like SellerAmp to check whether a product’s Amazon resale price, fees, and sales rank actually make it profitable, since margins usually land around 15-20% ROI.

Q: What does Arbitrage Card actually do?

We sell gift cards at a discount, say, a $100 Nike gift card for $95, through two sourcing channels: direct distribution (relationships with gift card distributors who source cards at a discount from brands) and crowdsourcing (buying cards from individuals, often credit card points enthusiasts, who picked them up during retailer promotions with per-person purchase limits).

Q: Why would a retailer even sell a discounted gift card in the first place?

It’s likely a mix of brand-awareness “loss leader” marketing and breakage. Retailers profit when part of a gift card’s value never gets used, whether it’s gifted and partially spent, or the recipient ends up spending more than the card’s value just to avoid “wasting” the difference.

Q: How does using discounted gift cards actually add to an arbitrage seller’s profit?

Buying a $100 gift card for $95 instantly lowers your cost of goods by 5% instead of just earning 2% cash back from a typical rewards card. On $50,000 of monthly inventory, that 5% difference compounds to roughly $30,000 in extra profit per year, straight to the bottom line, not just revenue.

Q: What’s the actual downside or catch to using gift cards this way?

Since most cards cap around $500, sellers making large purchases end up juggling dozens of gift cards per month with awkward remaining balances that require careful tracking, plus occasional cards that turn out invalid or short on funds, which has pushed some past users away from the strategy entirely.

Q: How do you build an optimized credit card “stack,” and where should someone start?

Many people start with Chase cards first because of the unwritten “5/24 rule”. Chase generally won’t approve you if you’ve opened five or more cards (from any issuer) in the past 24 months. Chase points are also valuable since they can be cashed out at 1 cent per point or transferred to airline/hotel partners for outsized value, and one flight redemption worth roughly 8.3 cents per point.

Q: If someone just wants one simple card, what should they consider?

It depends entirely on the goal: highest signup bonus, best travel perks, or most straightforward cash back. I’d say Amex Business Platinum is a strong all-around option (a signup bonus around 250,000 points at the time, offset by airport lounge access, travel credits, and incidental fee credits), while people who don’t travel much may simply prefer a flat cash-back card.

Q: What’s the deal with closing credit cards, is it risky?

Closing a card isn’t inherently bad for your credit, but you should wait a full year before doing so (ideally right before the annual fee renews) so it doesn’t look like you’re gaming the signup bonus system. If a fee was just charged, most issuers will refund or prorate it if you call within 30 days of closing.

Q: What’s your favorite productivity hack?

Batching message-checking to Monday/Wednesday/Friday only, using a timer tool (pomofocus.io) to cap it at roughly 90 minutes to two hours across every platform: Slack, email, WhatsApp, Telegram, Facebook.

On the off days, I allow myself to skip checking messages almost entirely, giving intentional breathing room instead of being reactive all day.

Q: If you had a $1M check on the table, how would you pitch Arbitrage Card to an investor?

Arbitrage Card is the only discounted gift card platform built specifically for arbitrage sellers rather than general consumers. We’ve built features solving the real pain points of the model directly: a Chrome extension that generates custom-dollar-amount gift cards to match exact order totals, a dashboard to track active vs. used cards, and an automated balance checker for major brands like Nike, Macy’s, and Kohl’s, plus stacking credit card bonus categories on top of the gift card discount for combined savings.

Q: How does Arbitrage Card make money, and how big is the business?

The platform itself is free to use. We make money on the spread between what we pay for gift card inventory and what we sell it for. Topline sales currently sit in the mid-eight-figures, and we’re still less than halfway to our long-term goals.

Q: Final billboard message for an aspiring entrepreneur?

“If it was easy, everyone would do it.” The deciding factor in reaching long-term goals is whether you’re willing to keep going indefinitely, ruling out the option of ever voluntarily quitting. Most meaningful goals take longer to reach than you initially expect.

TIMESTAMPS:

00:00 – Meet Taylor Thomas: The Arbitrage Card Story

00:25 – What Is Retail & Online Arbitrage?

04:27 – What Does Arbitrage Card Actually Do?

10:22 – Why Do Brands Sell Discounted Gift Cards?

11:52 – Where Sellers Find Gift Cards (Crowdsourcing)

14:17 – The Math: How Discounted Gift Cards Add Profit

16:24 – The Catch: Real Pain Points of Gift Card Arbitrage

19:50 – One Card vs. The Full Credit Card Stack

20:09 – Chase’s 5/24 Rule & Building a Stack

23:15 – Why a Credit Card Point Isn’t Worth a Cent

27:14 – Choosing a Card Based On Your Goal

30:18 – When (and How) to Close a Credit Card

31:33 – Rapid Fire: Caffeine, Sleep & Productivity Hacks

36:14 – The Investor Pitch: Why Back Arbitrage Card

42:34 – How Arbitrage Card Makes Money

43:32 – Final Advice: “If It Was Easy, Everyone Would Do It”