Needless to say…these were obviously a flop in the eyes of re-sellers this past weekend because they are selling BELOW retail on StockX the morning of and still is trending like so. Agreed, the frequency of the Jordan releases are way to0 frequent but on the same note…isn’t this what all you sneakerheads wanted when you were complaining how difficult it was to purchase Jordan’s on the market for retail just 2-3 years ago? Well now you have the opportunity to buy them at retail – in fact BELOW retail, but now you don’t want it because they’re not cool or they don’t resell for above retail? Life is funny isn’t it? I’m a true believer that humans just like to be tortured…lol. We just love to over pay for items we don’t really love or line up for restaurants for hours just because everyone else is.
Regardless, I’m writing about these today not because I’m telling you the obvious that these were a flop, but more so what opportunities you can possibly take away from this. Let’s talk about the shoe to start off. In my opinion this is a great shoe. First opinion is it’s exactly like the Black Cement 3 in every aspect except the black is red. It has every characteristic customers have been asking for – quality leather, Nike Air tabs and blah blah blah. None of that matters because like I said earlier…us humans just like to have what we can’t get. Once it’s made too available to you…it’s not special anymore. Personally speaking, I would have expected a better performance in terms of price for these but everything happens for a reason. I guess the timing of the release played a big role, but also confirms my assumption that this market simply has more re-sellers looking to make money than actual sneakerheads – i could still be very wrong, but I’m almost certain I can’t be THAT wrong.
So how can one see an opportunity on a brick like this? Honestly I’ve seen this trend many many times. What people don’t want today doesn’t mean they don’t want couple months down the road. As a reseller I like to take advantage of value on the market or in other words value investing. Right now this sneaker is trending for $180 USD, while the retail price tag is at $200 USD, which means there are probably a ton of these still sitting on shelves in retail stores. In my opinion, these are worth atleast $250 USD, which is the what I believe to be the intrinsic value of the sneaker in a normal market. This means if my prediction is correct, there is atleast a good 20%-40% spread in terms of pricing depending how you can lower your cost from who you buy. Sure this isn’t a sexy shoe to hoard right now unlike Off White 5s, BUT if you’re in the resell game…numbers matter more than the sneaker in most cases. Say it takes 1 year for the sneaker to move to it’s intrinsic value of $250, you can earn about $50 per pair (which is about 25-30% net margin). Trust me, this is better than 3% of a interest you get from money sitting in the bank.
I know you are going to argue that $50 is peanuts…it’s not worth your time. I would like to strongly disagree. You are earning $50/pair, but let’s say you buy up 50 pairs or more, which by the way is much more likely and possible than you trying to find 5 pairs of off white 5s on the market. 50 pairs at $50 profit is $2,500 with an initial cash outlay of $9,000. Sure it might take longer in time for you to realize this profit, but don’t forget that this is almost a risk less play. I personally don’t see this sneaker dropping much lower than $160, but essentially you’re getting almost a free call option on the sneaker price upside. How can you complain about that?