Year 2020 = More Jordan’s Less Grails

Over the last few months we have been slowly ramping up purchases in not so hype sneakers and have slowed down on our purchases of ultra hype grail sneakers considerably. To be honest this really wasn’t an intended/thought out plan from last year but we are simply going with our gut feeling of where the market is heading and taking what the market is giving us right now.  Last week we bought a bunch of DS Jordan 3 SEs that were deemed by the market as “bricks“. For the record when I say the market it really means the market price set out by sellers and buyers.  If shoes of this caliber are selling for less than retail, then in my book it’s a brick…at least for now.

This past weekend, we also picked up a few pairs of these pine green 1s. The market price in my opinion was more than fair on the after market barely selling over retail and we were able to get a fair amount quantity in with relative ease.  The reason why I love working with sneakers like these is because as a seller I don’t have to go hunting for these shoes.  These shoes somehow find their way to us.  Vice versa, sneakers such as off white and Travis Scott’s are honestly 10x more difficult as we actually have to work for them and the market is just way to competitive. To be honest, I’m getting too old to waste time chasing down sellers, so from our perspective the game is a lot easier when you buy sneakers that people don’t want  because they bring them to me and not the other way around.

Of course you might say, how am I going to make money on this? Well I won’t be making money today, but it doesn’t mean I won’t be in a few months or even a year’s time.  Right now I feel like we are EXACTLY in the 2001-2002 era again. I’ve seen it, lived it and experienced it first hand. During this time frame it was when the SB hype was just starting out and Jordan’s were literally on clearance racks.  Jordan 1 royals and Breds discounted and even THEN, they had trouble moving them.  If you really think about it, we are living that exact same time in terms of SB and Jordan’s in 2020.  Right now most Jordan’s coming out are still sitting and SBs…well you know….you don’t need me to state the obvious.

This isn’t the only reason why I decided to change our strategy. It’s mainly because the landscape to buy and sell sneakers have changed drastically over the past years. The emergence of StockX has really changed our buying and selling behavior. While the debate continues to be whether or not StockX is a cancer to the market or not – if you ask me as a business, they are nothing short of amazing.  They not only serve as a market price for DS sneakers, but more importantly they provide liquidity to the market.  I know some of you have absolutely no idea what I mean when I say liquidity, but in finance it simply means how fast you can translate your product into cash.  As a business this is extremely important.  Why? Because when you need cash in a very short period time, having high liquidity for your product is very important.  This was a big problem for me when StockX wasn’t around.  Sometimes you need to come up with money FAST to fulfill a buyout you didn’t plan for and knowing you have to take action right away or else the opportunity will fade – the only way to go about this when cash flow is not available is you got to sell some of your inventory.  For those that know what I’m talking about…selling takes TIME!  If I were to offload sneakers, I can’t just find a buyer RIGHT AWAY through my own platform unless I massively slash my prices to unfavourable means – even then it still will take time.  My platform just simply isn’t as big as StockX.  StockX provides liquidity to the market that no one can else can do on the market.

Circling to my point of today’s topic.  If I concentrate on buying lower valued Jordan’s that are bricks now, I massively reduce my liquidity risk in the future of my inventory.  For shoes like the Pine Greens, they will trade on StockX with very tight spreads, which in my opinion is extremely favourable.  That means IF I really needed to off load ALL my pairs at any given moment I can do so – same day if I really needed to.  On the flip side, if I was trying to offload high end grails like Fragment 1s, the spreads are WAY too big often in the $500-$1000 range.  For someone to bid close to my ask price might take weeks or months.  Hence, for me …the more logical inventory to buy are highly liquid recent releases that I hope will increase 20-30% over the year in which I can offload any time if need be.  This allows me to take exposure on the mid-long term price increase but also reduce my liquidity risk.  At the end of the day, sure having grails is a great for your IG page, but it may not necessarily be the best for your overall business.