Re-selling 101 – The Risk of Hoarding

I’ve been longing to write this one, but for some reason something always jumps to my mind before I ever got to writing this.  As you can tell i’ve been fairly inconsistent with my blog postings lately because life has been hectic with 10 million things going on at the same time! But what keeps me going are the times of getting random emails and DMs about people always reading my blog as references for their own craft and business, which i’m super happy because someone out there actually reads my stuff and that means the world to me.  Keep in mind I absolutely don’t make any money from sharing my process and thought, I simply write because I want to share with all of you my experience so you don’t make the common mistakes I or most people make in business.

Anyways, the risk of hoarding?  For those that don’t know, what is hoarding?  Hoarding is simply the process where you buy as many pairs as you possibly can.  As a re-seller, this is one of the hardest decisions to make because you are simply trading off time vs. money or in economic terms: opportunity cost.   Why this decision is so hard to make is because from a business perspective holding inventory is a VERY BAD thing because you incur what we call carry cost, which involves storage space and interest for those that buy with leverage.  Hence most business prefer to move products as fast as they can to stay lean and get their cash back as soon as possible because CASH IS KING no matter what way you look at it.  From my experience over the years there are 2 types of re-sellers.  One being the quick flippers which look for a very short term hold and would sell for smaller margins to get their cash back as soon as possible.  Second are the re-sellers that look for higher margins and don’t care if they have to hold on to their products for a longer period of time.  But here’s the catch, for those holding on hoards of product, they run a huge risk that prices could go south due to changing market conditions.

I can literally go on for days about this topic, but here’s the juice for today.  At what point do you decide how much to hoard and what pair to hoard to make the most money?  This really is the million dollar question but that’s why i’m here to share with you my experience.  First off, deciding which pair to hoard really requires some research and constant monitoring of the market and anticipation of what Nike/Jordan brand will do in the future.  One of my best successful hoards were the Nike T23s.  When they first released in 2011 they weren’t that desired for some reason, but around 2013 – 2014 I decided maybe it was time to pick up a few pairs because i felt they were undervalued.  Here was my thought process:

1. The lightning 4s were rumoured to release again and prices dropped and shot right back up to more than what they were selling before the rumour.  Then I figured yellow was the thing people wanted in shoes because they weren’t many models out there that featured yellow nubuck.
2. The Tokyo 5s were selling around 1k or so at the time and I knew they were MUCH MORE limited than the lightning 4s, hence they should be valued way higher than what lightning 4s were fetching for on the market.
3. Why Tokyo 5s never really went up in price back then was because there was a rumour that there will be a general state side release, but eventually these rumours came to be false and that the 200 something pairs released in Japan were final.  This was when i believe prices started to move up and by that time i already hoarded about 10-12 pairs.
4. Lastly, my experience with Nike brand is for event related releases, they will never retro or re-create.  Ie. Playstation AF1s, Eminem Encore 4s, Dunk City SBs, Quai 4s, and etc..Hence this pair of T23 made for the Tokyo basketball tournament will most likely follow the same path of no re-creation or retro.  Hence i took the gamble and went big with the hoard before prices went up

In summary, there really isn’t a fixed formula because every shoe is different.  What works for the T23s might be different for a Jordan 1 BRED.  This mostly comes from experience but a bit of it comes with luck.  How I see luck is you really have to put yourself in the position to be lucky in the first place.  So expecting luck to somehow find you without you putting your dick on the line would probably never work.  Business is a game of calculated risk.  Those that truly succeed are those that make the best calculated risk more often than its peers.