There are many sneakers out there that will go up or down in price in 1 year’s time and there are certain pairs out there that will give you almost a GUARANTEED return. As a reseller, there’s much more incentive for me to go for pairs that offer guaranteed returns than take a chance at certain pairs with an uncertain price movement. The only chance I would take risk on certain pairs that don’t offer guaranteed returns is when there is a chance of a massive upside “potential”. There aren’t many pairs out there that offer this type of risk reward on the sneaker market where the prices explode up unexpectedly. In addition with limited capital, it’s probably in your best interest to go for guaranteed money.
In my opinion, the Royal Toes and Court Purples are really the best bet for a guaranteed 34% annual return. It’s no secret that Jordan 1s are usually the best “investment” from a resell stand point, but you also have to be selective in terms of what to buy given the price and price expectation and capital in hand. For example, I personally wouldn’t be going out to buy Turbo 1s now because prices are now $430+ and for it to go up another 30% to $550 or so would probably take much longer than 1 year. Moreover, for the same dollar, I much rather have 2 pairs of Royal Toes than 1 pair of Turbo greens from a risk standpoint.
Let’s breakdown the numbers. The last sold size 9 on StockX is trending around $260 and this price can fluctuate a bit and you might be able to get it a bit lower than this price if you get lucky or wait around a bit. But let’s just say you buy at $260 and net the shipping cost which would cost you around $275 give or take. Of course, you can probably even get a pair for slightly cheaper from individual buyers that are willing to accept the same price and offer free shipping. Looking forward 1 year, I would expect this price that will likely trend around $400. After deducting 4% transaction cost and $15 shipping (assuming you would offer free ship to your buyer), you will be left with a net sale price of $369. This gives you approx $94 in profit margin net of all cost, which yields you a profit margin of 34% in 1 year.
You might be saying…well all that work for just $94 of profit? Sure enough it doesn’t sound like a lot of money, but you have to factor the fact that this is almost guaranteed return you are seeing. I certainly don’t see this pair going for less than what you paid for in 1 year’s time, so you basically have no downside risk. In the investment world, there’s no such thing as guaranteed return and if there is anything close to it…you are looking at maybe 2-3% from money markets or bank interest AT MOST! Putting things into a bigger picture…if I deposit $100,000 into my bank account today that pays me 2% interest…in one year my bank account will be at $102,000. On the flip side if I dropped $100,000 into buying 350 pairs of Royal Toes, the amount that would sit in my bank in 1 year’s time would be $134,000 – a difference of $32,000. More importantly, let’s not forget about compound growth because the next year you will now have $132,000 to buy sneakers and if you decide to re-invest all your profit into the business, I promise you will grow much faster as a successful re-seller.
Some like to hate on re-sellers, but this type of trade is present in everyday life. You buy stocks for what? Of course you hope the company will do well so the stock you purchased will be worth more than what you paid yesterday. People like to use the term “invest” when it comes to stocks, but really at the end of the day we are ALL re-sellers. Personally I like to put money where my mouth is and for the sake of this blog, over the last few weeks I have personally have bought more than 100 pairs of Court Purples and Royal Toes. This is also the reason why you don’t see me selling any pairs right now because personally I have to pay resell prices to get these in hand and for me to sell at the last sold prices on stockX I would actually be LOSING MONEY. For the record, I could be wrong with this prediction, but I’m almost 99.9% sure I will be making much more than leaving money sitting in the bank as cash.