Last year in June 2019 I wanted to experiment to see IF I just sold GRs and nothing else, would it be enough to quit my full time job. This does not include shoes I sell on the Netmag platform. This was purely sales on third party platforms such as StockX and eBay because this would be a better representation for others that don’t have the online presence on IG. Since then I have been keeping track of sales made only on eBay and StockX for GRs. My definition of GR is easily accessible sneakers on sale and generally available many days after release date and consists of sneakers such as Nike in lines, Nike Basketball, Runners and even Converse. This doesn’t not include hype sneakers sold on the platform because not many people would have access to these pairs and the profit and numbers from the sale of these would be skewed. Why I decided to do a one year test because this will effectively eliminate seasonality in which some months will be better than others and having 1 year would be a much better representation than just doing it for 3 months and projecting it out for the full year.
So how much did I make and was it enough? Keep in mind, everyone’s opportunity cost is different, so I am simply speaking from my perspective only. The profit might be more than enough for some, but for some it is not. So let’s get down to the numbers!
So over the span of 1 year I sold 1,005 pairs of sneakers as part of the experiment. The total sales amounted to be $254,000 CAD (~$191,000 USD). After accounting for all the platform fees (eBay 11%, StockX 8%), shipping cost and paypal fees, the total gross profit margin ended up to be $46,384 CAD. Putting numbers in terms of average, the average profit margin is approx $46/pair and the average profit margin percentage is 28.6%. I would say the opportunity is fair, but not enough to be well off. I kid you not…the below Jordan Proto-Max 720 I sold over 80+ pairs of this model alone. For some reason this pair sold extremely well on eBay – something I can’t explain why.
Last year my total take home gross salary was $114,000 CAD before tax. Now comparing to the scenario of had I quit my job and just sold GRs, it clearly isn’t enough to justify quitting my job. HOWEVER, this isn’t the full picture because we also need to factor in what type of lifestyle you want to live. Personally I can’t survive with just $46k in annual income in Toronto. This is below the average annual salary of $53k. But one thing we definitely need to consider is the opportunity cost of NOT having to go to work everyday for a 9-5 job – ie. the time you save from commuting and the freedom of flexible hours. This alone of living a flexible hour life may be worth more money to some and some might even take less money for the freedom of not having to work for anyone. So this circles back to my initial question…what lifestyle do you want to live?
For the record, the $46k is probably the minimum floor you can make because for me I was only listing and selling on my free time mostly outside of my working hours and Netmag operations. IF I had devoted more time to selling I may very well push this number considerably more… atleast $15,000 in my opinion. The only reason I’m unable to scale this experiment is because it’s very time consuming. You really have to constantly scout the market for profit potential on shoes and also managing bid/asks on StockX for different sneaker models becomes a very tedious job, which will require more effort and time and certainly will then become a full time job. So conservatively speaking, if I was putting in more hours in pushing GRs, I can maybe push my annual profit to $60,000+, which then actually becomes a very plausible case to quit your job. Don’t forget corporate business tax is only 15% and personal tax is much higher at an effective average of 29.5% (based on $114k salary). That’s almost double the tax you’re paying! So if you’re making $60k a year flipping GRs…and if we are comparing numbers on an after tax basis, you might have a fair case between the 2 options.
In conclusion, it was a fun year to experiment this and keeping track of sales just from GR flipping and to be honest I had nothing to lose because from my perspective I just opened up another revenue stream for Netmag. I did underestimate the amount of work needed to go into this because of the amount of time managing listings and bid/asks was very tedious and would require more man power if I wanted to expand and scale from here. With respect to my full time 9-5 job it doesn’t make sense for me to quit because the opportunity cost is too big for me. I’m lucky to have a full time job that gives me extremely flexible working hours and a relatively low stress environment, which is extremely compatible with my the time I have to spend on Netmag. The thing with having a full time job is you are guaranteed to get paid as long as you perform as requested and the health benefits that come with it is fairly hard to turn down. Vice versa, if I was working at a job where I’m getting paid $50,000 a year with crazy long hours…no doubt it would be a super easy decision to quit and flip sneakers full time. As of right now…keeping my full time job, flipping GRs and doing Netmag works perfectly fine for me. Though things may change in the future, but for now…I’ll take what I get. Hope this serves as an insight for you if this is what you had in mind in doing. My advice is NEVER quit your job until you experiment to see if reselling is the life for you. It may look easy at times, but it can get ultra competitive and time consuming which may not be apparent until you actually dive deep into the job.