We always hear the famous saying…Scared Money Don’t Make No Money! That is very true in the game of sneaker re-selling. You can’t expect to make money by being conservative. Sometimes you have to make bets contrary to what the market thinks today…a BRICK today doesn’t mean it’ll be a BRICK tomorrow. If you follow the market based on what everyone is doing then you’re not going to make money. Sometimes you just have separate from the crowd and make bold bets to make a decent enough spread in reselling. Understand that the business of re-selling, the profits are razor thin and they will continue to be that way with expanding competition for the foreseeable future. For the past 2 years, I’ve been continuing to say…it’s almost near impossible to make big money by just doing the short time frame flip. Resellers have to expand their horizon to see substantial/material profit margins. The one shoe that I could think of that could have made you dough on the same day flip were the OFF White Chicago Jordan 1s. You could have tripled your money the next day, but had you held on for a few more months, you would have 10 fold your money.
Of course, with longer period holds…re-sellers have to manage the cash flow aspect. We can’t always have the luxury of sitting on pairs as our cash is limited and we need the cash for the next drop. However, that’s what I’ve been explaining as well…with a longer holding period, you’ll need the whole re-selling business model to change as well. You need to look for financing that offers cheap borrowing where the rate of the price increase of the shoes would far outweigh the carry cost (interest).
For the past 2 years, Netmag’s business model has changed considerably as we adapted to the fast changing market. We positioned ourself to buy as much as we can at current market rates and buy big for pairs we believe will do well in terms of re-sell prices 1-2 years down the road and not next month. Yes, our minimum holding period now is probably atleast 1 year. Some may argue, why are we trying to FUCK up the market by forcing prices up? Let me get one thing straight! The sneaker market is VERY BIG. We only represent a very small portion of the market and us alone don’t have the power to move the market. Moreover, a lot of times the market price is a true reflection of current demand and supply, so everyone has access to buy at current prices… All we are doing is simply buying what we think will go up in price and holding it. You have the equal opportunity to do so like us, but you may just decide to spend the money elsewhere and look back and regret why you didn’t invest instead of dropping money popping bottles at the club or a nice lavish vacation.
I’m not telling you to bet BIG on stuff like the 2018 Jordan XI Concords that just released because you have to evaluate the shoe in question as well. Sure the Jordan XI will increase in price over time, but there are simply too many pairs on the market and the retail price on them originally is too high and for prices to move will take a LONG time. How I look at it is if i’m investing that much on a pair, the potential spread better be material. There’s no point of me dropping $300 on a pair and make only $50 one to two years later. If I’m dropping $300 on a pair today, I better make atleast $100-$200 1 year from today.
This was the case with the Travis Scott AF1 Sails in which I highly believed they would do numbers couple months later after release date. Contrary to my initial prediction, they didn’t do so well right off the bat. Re-sell prices were trash when they first released literally only selling for maybe $50-$100 over retail. But, I stuck to my original decision and figured it was a good time to buy low while the whole market believed they were bricks and I picked up pairs for the low (at the time)…around $250 or so a pair. I picked up a total of approximately 30 pairs at the time. A lot of you would have said i’m stupid at the time dropping close to $8 racks on these “BRICKS” at the time, but would have called me a genius today because in today’s time that original $8,000 I dropped is now worth about $15,000. Of course, not every pair would have the same outcome but business is about winning AND losing. We don’t always win, but as long as you win about 60% of your choices, you’ll stay in business.