Yes I know I should be blogging more and Yes, I know I should be back on my YouTube channel vlogging, BUT at the end of the day I can only do so much as an individual. Ever since the end of December, business has been extremely busy and taxing both physically and mentally. Don’t get me wrong…I am not complaining at all. Ask me 7 years ago where I want to be in terms of re-selling and where I want to take my business to, what I have today would have been EVERYTHING I could ever wish for. Of course, there wouldn’t be success if there was no sacrifice, right?
Well, basically I have been working non-stop since then without any breaks and the fact we are still living under a pandemic has certainly helped because this only allowed me to be ultra focused on the business without any distractions. In case you didn’t know, Nike/Jordan has been pumping out fire non stop for the past 2-3 months and there really hasn’t been any signs of slowing down from their part. Some of you might think, more hotter releases means more business. Yes and No. From a retailer standpoint, 2021 is about to be one of their best years in recent memory, but from a re-seller standpoint this can also be a killer year for you if you have the right connections in place. However, the biggest constraints and determinants of success for most resellers this year is – CASH FLOW. Not having enough cash and not being able to keep up with the hottest releases will hurt your business if you can’t keep up. Releases this year has been more frequent and fire releases seem to drop in waves of weeks and not months compared to years ago. I’ve touched on this topic a few times where I talked about as a re-seller we are actually providing liquidity to the market. Our position sometimes isn’t always the quick flip and we usually have to hold out a few months before we can see any material profit.
One of my toughest stretches in recent memory was back when the Off White UNC’s dropped in which several hot releases dropped in a short period of the time, which stretched my cash flow to the max. However, because this stretched only lasted about 1 month or so, I was able to recover cash flow in the months that followed. This year I already felt the stretch on my cash flow very early on and in anticipation to bigger and more hype drops coming down the pipeline this year, I had to made critical business decisions to put myself in the best position possible to be able to meet the drop demands. This obviously required me to ration what inventory I can keep and what I shouldn’t. Trust me, this task is much harder than you think because almost everything I bring in of course I have the expectation that would go up in price, but my filter was if the shoe doesn’t have the potential to earn me atleast 20% within the next year, they have to go. Just last month, I also had several conversations with my bank to increase the business line of credit to half a million dollars because I certainly don’t want to be in a position to force sell in very unfavorable situations. The negotiations have to happen weeks in advance because increasing your line isn’t just as simple as a phone call or email. You need to provide A LOT of financials (ie, balance sheet, income statement, NOA and etc…) and if you need cash flow tomorrow…well, good luck – it’s not going to happen.
Cash flow isn’t the only constraint we have this year. Inventory space is the second biggest constraint to my business. It’s easy to say…let’s just rent a bigger space and that would solve that problem…I mean who wouldn’t? BUT renting a bigger space would entail a bigger overhead and with more space means I’ll be more prone to keeping less efficient inventory just because the space is available. Over the years, I find that I operate best when my back is against the wall in which I’m always forced to innovate and think outside of the box to solve the current situation(s). Being in an uncomfortable situation forces me to continue to come up with solutions that helps push the business forward. On the flip side, if business was laissez faire all the time, it’s no doubt…your bottom line would also be very…laissez faire.
With all the stress and pressure to continue to produce as a business, the bottom line is I still love what I do. How many people can wake up and say they love what they do and is excited to go to work? The fact that I got to turn my passion into a career/business and be profitable at the same time…what else can I ask for? Of course, there are always the negative things that I absolutely hate…(ie. dealing with difficult customers, logistics), the pros of running your own business in the field you love triumphs all the negatives. I do hope I can continue to blog more often, but hopefully I can catch a break or 2 in between the busy schedule and continue to share this crazy journey of mine.
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