Yes I know…where have you been Netmag? You haven’t blogged for over 2 months! Let’s just say shit has been busy AF! There have been a ton of stuff going on and for the most part it has been great and we have never been more busy, BUT I’m not complaining because this is what I wished for ever since I started the business. Now that I am where I wanted to be 5-6 years ago, it’s just not right to complain!
With that said, jumping into our newest blog for today…I have touched on this subject many times before but today is yet another reminder that BRICKS is really the part of the sneaker game where REAL BUSINESS is being made. Don’t get me wrong…dealing with highly sought items such as Jordan 1s, hype drops and off whites are great, but at the end of the day your supply is extremely tight and your ability to acquire such pairs is very limited. Yes of course margins on the flip are good IF you can acquire supply at retail price, but in the game of business, the theory of “No Free LUNCH” is very real. You can blame the supply shortage to bots, but even bots have a high fixed cost they must pay upfront to risk getting pairs in volume and the worst part is success isn’t even guaranteed. For the general public, being able to secure even just 1 pair is considered a miracle W – so how do you create/run a business when you can’t even get consistent supply in the first place? Your next question will be…well how do I make money elsewhere in the sneaker game?
There are many ways you CAN make money in the game of sneakers and I’ve built a semi-successful business without ever having to pay retail price for hype sneakers. YES! I pay re-sell prices for all my grails and sought after sneakers. Just because you pay re-sell today, doesn’t mean you can’t make money in the future. However, my blog today isn’t about the hype sneaker drops, but rather the other spectrum of…. BRICKS! What is considered a brick? Bricks in my definition are pairs that sit at retail for a period of time (either people don’t love them or they made too many) that eventually go on sale after their shelf life. After the shelf life, pairs usually go on sale for 20-50% off the retail tag and that’s where the money is to be made.
Taking the above Nike Air Max 95 Pink Foam for example. At one point over a year ago, I bought over 300+ pairs of these for 20% off the retail price tag. Of course, I wouldn’t be able to make money right away at the time because market price was so low and people still had access to this pair, but things started to change when the available supply started to dry up and that is when you jump in. After the 20% discount, I paid about $150 USD all in and the highest latest price I recently sold on the X was $310 USD – which after all fees was $275.90. That means I pocketed $125.90 in profit which is almost 100% margin. Of course, not all sizes will hit this price and honestly my goal is to aim for 30-50% margin before I sell and sometimes less, but you get the point.
I’m not saying ALL shoes you will be able to repeat the same success because knowing WHAT to buy is half the equation of success before going in. I’m sure most of you can do the math on how much I could potentially make on this haul, but let’s just say off this $45,000 investment I make on average 30% margin per pair to be conservative, that would land me at a profit of $13,500. In my opinion, that’s not bad at all being on the conservative side for a sneaker no one wanted at the time. So why drop 45k on this sneaker and not on a Jordan 1 or hype drop? Well that’s a good question because we already invested a lot of money in Jordan 1’s, BUT we don’t invest in ALL Jordan 1s. For example, if a Jordan 1 is already re-selling for $400-$500 right off the bat, we tend to stay away because there really isn’t much room for more profit in the short term. In the long term, certainly there is potential, but in business you need to be able to turnover at a high rate to be successful and take advantage of even better opportunities when they present themselves. For a Jordan 1 that’s re-selling high off the release, it would only make sense for us to dump money in the shoe “IF” the shoe can resell for over $1,000 the next year and the chances of that happening are very slim! This is why our business doesn’t just revolve around hype or sought after sneakers because if our business only revolved around this it would be impossible to grow because we simply can’t scale!
This is also one reason why I love selling on StockX because I see the 8% fee I pay them as if it was a business expense of me outsourcing customer service/operations and convenience. I mean the fact they also throw in free shipping….well it’s game over. Yes, I agree StockX has really killed a lot of business from the “consignment” perspective because with such low fees and free shipping, the consignment model basically doesn’t make sense anymore. I don’t know if any physical shop can still survive if this part of the business is consumed by StockX unless they sell very niche products that StockX doesn’t provide. However, the most important aspect is even though I’m paying a 8% fee, I’m able to leverage their operations and free shipping so I can scale my business and focus on figuring out what to buy than me dealing with the after sale logistics.
At the end of the day I’m not saying don’t sell hype sneakers because like they all say…Hype gets the people’s attention and brings the people to your store/page, but bricks is what keeps the business going. The reason why I never bothered for a sneaker drop on SNKRS or waste any time filling out raffle forms at stores is because it truly isn’t worth my time. The time I spent trying for these drops means I have effectively wasted time on a non-guaranteed outcome where on the flip side I could be spending my time looking for potential deals out in the market. If you need anymore convincing why Bricks is a good thing and not a bad one…just think of it this way. Websites/Stores will do ALL they can to ensure you can only get 1 pair or less on a hype release…BUT the same website/store will do whatever they can to try to entice/lure you take all the bricks off their hands. I mean as buyer…you already know which side I want to be on! Until next time! Love you all.