As the title says: I just now heard about churning. Or at least the definition of it at least. Here's a little bit about myself and why I am so interested in learning about churning. After countless YouTube videos and other forms of research I feel like I haven't figured anything out.
I have recently began a new chapter in my life. E-Commerce. With a baby on the way I am only more driven to achieve my goal of being a successful entrepreneur. I have had a few ventures, I have been successful and I have failed. As I grow I encounter new ideas and ways to build a business and it seems my journey has brought me to churning! What does it have to do with churning, you might ask? Well, I want to utilize my credit as efficiently and as effectively as possible as my business grows.
To be honest, I don't really even know what questions to ask. I have already done about 8 hours of research on different credit cards but I do not have anyone I can ask to talk to about if I am going about things the right way. If I am picking the right strategy when it comes to utilizing the store's cash flow. I am obsessed with efficiency and effectiveness of anything I am building, rather that be a business, car, or friendship. But I seem to have run into a bump. This bump is "How to utilize what is known as "churning".
I have an e-commerce store that fulfils orders via Amazon. (Customer buys the product->order gets processed ->order gets fulfilled manually and shipped by Amazon.) To be able to fulfill orders on my end, I need a bank account/credit card. I'm sure you can figure out which one I plan on using when I roll out the website. My top 2 cards are the AMEX Plum and the Amazon Store cards. I am leaning to the Amazon Store card because 5% cash back really seems like the best deal. Due to the nature of the process I don't have to really worry about interest at all so I see the Amazon Store card as a win-win. Eventually I would have to hire somebody to help with order fulfilment. The 5% cash back would help very well with paying for that.
I could also go about another strategy and this is where things kind of start getting complicated for me. (Customer buys the product->Bot Fulfills the order->Ships through Amazon.) Cost is $0.40 per order but is added into the cost of the product. I would never really have to worry about hiring somebody to fulfill orders either. The only issue? Having to keep $$ in a managed account that is funded via PayPal in order to fulfill the orders that come through my store. Now here is where the credit card issue comes into play. The PayPal account would be funded by a credit card. I have come to the conclusion that the AMEX Plum card would be most suited for that as I believe I could get the 1.5% cash back just by making sure I paid the balance off every 7 days. (I know its 10 but its easier to just do it once a week.) And 0% interest is a must for this strategy. There is a concern however that, since it is a new business, I could load X amount onto the card and not have the sales to create the funds to pay it off in 10 days, or even worse, 60. Things start getting really complicated with that aspect.
As I am sure most of you well know, E-Commerce needs to run Ads. So I will need a credit card for this too. I am pretty much set on the AMEX Business Gold card. I'm positive that's just going to be the best I can get.
I've heard that getting a Chase Business Ink card is probably a good idea.
So that's where I'm at. I'm almost positive that you must be asking yourself (after reading all that), "What does this have to do with churning?" I just realized about 2 hours ago that I can seriously utilize "bonus cash back" offers AS my business grows. For example, I can start out with a business card that gives you bonus cash back if you spend $3500 in the first 3 month. There's so many different credit cards that I have no idea which one I should start off with and which one I should move to after utilizing these types of offers.
I know that utilizing balance transfers would also help me maximize these offers. All while utilizing the business' cash flow. I have absolutely no clue about how to utilize balance transfers to their maximum potential or what cards are even good for that. It would play in extremely well with my bot strategy (Required funds for a managed account) or even my manual fulfillment strategy (Transfer the balance off the Amazon card to the designated "Balance Transfer" card. I have a few different ideas but none of them are going to be as effective as everyone else here because my knowledge is limited.
I am still researching this diligently, so I have come here to Reddit to get any sort of criticism, praise or creative ideas I can so that I can form a more effective strategy for the store I am building.
If you made it this far, I am extremely grateful. Thank you very much for taking the time out of your day to read this and/or offer your opinion.