How to Start Reselling Shoes and Make Some Serious Money

0

The sneaker industry has been through some things over the past couple years. While overall demand in the market has notably decreased with the rise of inflation, there are still ways for dedicated sneakerheads to turn their hobby into a profitable side hustle — or even full-time job.

You can’t ignore changes in the market, though. As demand shifts, you have to adjust your business strategy. Today we’ll delve into the smartest ways to start your reselling side hustle in 2023.

Why Sneaker Reselling Has Changed Since the Early Pandemic

When the pandemic hit, online sneaker resale numbers went through the roof. The combination of so many people spending so much time on social media and the absence of in-person sneaker conventions created some unique opportunities.

In the time since 2020, a lot has changed. Nike quietly shifted from a direct selling model to re-establishing relationships with third-party wholesalers, making it harder for individual resellers to turn a profit on brand-new shoes. Ye went off in new and alarming ways, forcing adidas to reconsider the terms of their Yeezy contracts.

In-person sneaker conventions are back, and social media isn’t garnering the same results it did when everything initially shut down. To top it all off, the economy is weird, so everyone’s clutching their purse strings tighter as they pay double at the grocery store and wait for an official recession to kick in. Commodities like designer sneakers aren’t a ‘need,’ so not as many people are spending money on them.

The changes have been radical, but that doesn’t mean that flipping sneakers is a futile effort. You’ll just need to approach things a little differently as you build your business to accommodate the shifting market.

Flipping Kicks Could Still Earn You $50,000-$100,000 Per Year

Bryson Honjo is a former independent reseller with a massive social media following. His following still exists, but as social media engagement has experienced an overall downward trend, he’s transitioned to becoming a partnership manager at the live selling platform Whatnot.

As a veteran of the industry, Honjo said that it’s still entirely possible to earn between $50,000-$100,000 per year reselling sneakers — especially if you engage in live selling.

What Is Live Selling?

Live selling platforms are essentially online auction houses. You get in front of a camera, set a base bid, and run your auction. The average auction lasts about one minute, so if you engage for an hour a day, you could potentially make upwards of 60 sales.

“There’s an emotional aspect that’s not there with ecommerce,” said Honjo. “You’re not just engaging with a username. This is a live person who is showing you on camera what the shoe looks like from every angle. If you have sales ability and a presence suited for entertainment, you can drive up prices by creating FOMO.”

(FOMO stands for “fear of missing out.”)

To give you an example of earning potential, Honjo was previously making about $100,000 a year with about 250,000 followers on YouTube and 50,000 followers on Instagram. Today, on Whatnot, he sees sellers with a mere 5,000-25,000 followers on the platform pulling in the same profit. Sometimes more.

Many live selling platforms do also give you the option to sell in a traditional ecommerce manner, but you’re likely to do bigger numbers by going the live auction route. The biggest live auction platforms in the US include:

How to Get Started Reselling Shoes

The mechanics of making money in this niche are fairly simple, but that doesn’t necessarily mean it’s easy. You can’t come in with zero knowledge of the industry. To get started, you’ll need to learn about the product, how you’ll make money and how to anticipate overhead costs.

Build Your Inventory

In the past, you needed to sell like-new, unworn sneakers if you wanted to be considered legit. But today, selling new, hype sneakers is not a profitable endeavor. Both Nike and adidas tend to flood the market with new releases, making it harder to turn a profit at the get-go. Plus, over the past couple years manufacturers have made it more difficult to load up on a ton of inventory if you’re an individual reseller.

Worn sneakers are better for building inventory in 2023. That doesn’t mean you’re going to make a ton of money off of kicks that are absolutely trashed, but if they’re lightly worn, that’s where you’ll find the highest profit margins. Because it’s harder to value a lightly-worn sneaker, you can find great deals while building inventory. You can also potentially sell your finds for a much higher price, since there’s no hard-and-fast rules when it comes to market valuation.

You can find inventory in any of the following places:

  • In-person sneaker conventions.
  • Live selling platforms, like Whatnot, NTWRK, WANTD and Ezze.
  • Traditional reseller platforms, like eBay and GOAT.

One traditional reseller platform you’ll want to avoid is StockX. They used to have a great reputation, but their star has fallen as of late as they’ve been stocking a lot of fakes.

Depending on where you live, in-person sneaker conventions are back to their pre-2020 glory in terms of attendance and inventory. Honjo notes that availability is going to vary a lot depending on where you live.

“If you’re in Mississippi, it’s highly unlikely a convention is going to roll through town. But if you live somewhere like LA, you can find several every month.”

Sneaker Reselling: Volume is King

It was true three years ago, and it’s true today: In the sneaker reselling game, volume is king. You don’t necessarily want to stock a bunch of super hype, super expensive sneakers that won’t move quickly. That’s not where you’ll find the highest profit margin. Instead, you want to stock a bunch of shoes that are reliably in demand.

“‘Volume is king’ might even be more true today,” said Honjo, “since you can turn around sales so quickly on live selling platforms.”

Shoes to Buy: Best and Worst Returns

What are the best shoes to stock? If you’re going for volume, Honjo recommends Nike Dunk Lows and Jordan 1 Highs. In the current market, both reliably provide a profit margin somewhere between $30-$50 depending on your timing.

This is a decrease from 2020 highs, partially because of market demand, and partially because you’re selling worn shoes whereas three years ago you would have been selling unworn, new kicks. But because you can move so much more inventory with live selling, the decrease in profit margin can be made up for with an increase in the number of sales.

By and large, you’ll want to stay away from flipping Yeezys. In the past, you could pretty reliably turn a profit if you held onto them for about a year after the initial drop. In 2023, that reliability is gone.

“It might end up still being the case,” said Honjo, “but it’s just so unpredictable. If he continues to implode his own reputation, the demand might not be there in a year.”

Calculate Your Overhead Costs

Remember to calculate overhead costs into your profit margins. You’ll need to account for:

  • Fees paid to the reselling platform (or sneaker convention.)
  • Costs of packaging materials.
  • Shipping fees.
  • Gas money for driving back and forth from the post office (if USPS doesn’t do pickups in your area.)

Now, the end consumer usually ends up paying for shipping. On traditional resale apps, you had to keep your shipping costs competitive with other resellers if you wanted to make the sale. On live selling apps, you might be better able to charge real shipping costs without impeding sales.

Another huge expense you need to account for is taxes. When you start a side hustle, you’re technically self-employed — and no one’s withholding taxes from your earnings for you. Make sure to pay quarterly taxes on your earnings to avoid penalties, and know that at the end of the day, you may end up needing to save somewhere around 30% of your income to pay Uncle Sam.

Find Customers

If you’re selling online, Honjo said there are two paths you can take: The extrovert path and the introvert path.

“If you’re extroverted and comfortable in front of the camera, live selling provides bigger opportunities in the current environment.”

You do have to be honest with yourself, though. If you hate the idea of being an entertainer, you’re going to be better off going the old route of reselling on the apps and amplifying your posts on social media. While social media isn’t as active as it was a few years ago, that doesn’t mean it’s impossible to do big things with it today. It’s just going to be harder to gain traction than live selling.

Is Becoming a Sneaker Reseller Right for Me? 

If you’re a self-driven entrepreneur —especially one with a big personality that comes across well on camera — you can make good money selling sneakers. Possibly even enough money to replace your 9-to-5 income if you hustle hard enough.

If you’re going to build a business, it’s easier to put in the work if it’s something you’re passionate about. If you enjoy sneakers as a fashion statement or consider yourself a sneakerhead, this side hustle could be a particularly good fit.

It can also be ideal for those who might already know they enjoy collectible industries. Even if the product is different, the experience of the work is similar. It’s that same thrill from searching for a great deal, getting your hands on it and then raking in the profit.

Pittsburgh-based writer Brynne Conroy is the founder of the Femme Frugality blog and the author of “The Feminist Financial Handbook.” She is a regular contributor to The Penny Hoarder.





link

Leave a Reply

Your email address will not be published. Required fields are marked *