5th day of blogging in a row! Let’s go!!! I briefly touched on this topic 2 days ago about the vast amount of GRs available on the market that actually makes more sense than selling hype sneakers. Its only right to follow up with an actual real life example in case you think I was just all talk. Just as a disclaimer! Not all GRs will do well, but if you know the market well and have a good sense of what sells and what doesn’t, you can certainly can make a living from this.
If I asked 100 of you, which pair would you choose to resell left or right, i’m almost certain 100 of you would choose the Yeezy. Most of you probably won’t even know what shoe on the left pair is without me having to tell you. The market is structured in a way that unless you are able to luckily win a sneaker raffle (which btw is quite difficult at scale) and cop for retail it would be hard to make decent margins on the resell market. Putting numbers into perspective, for these black 350s, I paid $370 USD buying them from a customer in a buyout 2 months ago. This was already 10% below the market price at the time to factor in my margin and any lower the seller wouldn’t need me because selling on StockX directly would make more sense financially. This is the same dilemma most resellers would face today. In order to buy inventory, your margin will fall within 10-15% at most at any given moment because the market is now much more efficient than it was 2 years ago. Everyone is now able to reference to StockX with the market price so earning 20-30% instant flips don’t happen anymore in 2020.
Now going straight to the point. These Nike React Prestos (AV2605-002) that I picked up originally for DS random boxes to be given out in our subscription I paid $96 Canadian, which is about $69 USD. Yesterday they sold on StockX for $150. From the below breakdown, my payout is $125.51 USD, which nets me a total of $57 USD and with the corporate tax rebate my net profit comes to $65 USD. After deducting my shipping box and tape cost…lol. That’s a profit margin of 96%.
On the flip side, if I were to sell the Yeezys right now, my net payout would be $386 USD, which is a net profit of about $20 USD. I can extend my margin a little more by about $20 had I found a buyer myself saving me the 8% fee, which means at this moment $40 USD is pretty much my max margin that yields about 10.5%.
So…$65 vs. $20 might not be a drastic game changer but here are a few things to consider – just like risk when buying stocks – they go hand in hand. You can’t just look at the profit potential without factoring the risks. Buying yeezys are great for status/image for your IG/resell business but let’s not forget about all the fake pairs on the market. If you are buying from reputable sellers which lowers your chances of fakes, it would almost be impossible to make a quick flip profit because the sellers would obviously cut out most of your margin, which means buying from not so reputable sellers is your best bet for margin and this is the problem…if you’re a seller that doesn’t know what to look for in terms of legit checking, you’re risking a whole lot of money for just 10% profit. On the flip side, it doesn’t take an experienced sneaker guy to legit check these GR prestos because YOU all know there won’t be fakes on the market…why? Because they are sitting on discount in numbers on retail websites waiting to be red carpeted out.
As I mentioned before… it takes a bit of time and effort to constantly monitor different models to see what’s selling well and what’s not. However, the key is the low risk associated with potential profit. I must admit your margin won’t be this great all the time – I would have been happy with just half the margin because I know if I can move more pairs at this price, it’ll be just as good. This is what we call scalability. Yeezys are limited on the market and tough to find at a profitable rate, but GRs are easily attainable in mass quantities (atleast for now). Just remember…the sneaker market isn’t just about hype sneakers…the average joe market is still VERY BIG! These are your average human beings that don’t understand why sneakers sell for $1,000+, but wouldn’t mind a nice looking pair of sneaker at a $100-$200 price range. At the end of the day, sneaker reselling is an art. I’m not saying you should forgo one for another entirely, but being able to operate well in both markets will open up more opportunities and potential doors in the future if you strive to work for it.