Outsourcing NETMAG

If you asked me years ago whether or not I will do whatever it takes to make it on my own rather than relying on others…100% I would say I will try to make it on my own! However, that was also the 26 year old me that was hungry and driven to make a better life compared to the current 35 year old me today that’s more about the balance of life and work. No doubt I have spent my late 20’s grinding my ass off selling sneakers and doing it all by my own from front to end. Was it worth it? 100% it was because I get to now enjoy the fruits of my labor of all the hard work I put in over the years. One other thing I forgot to mention that the sneaker environment back then has also changed significantly.

I never enjoyed managing people let alone manage my own employees. Even for those that have helped over the years, I always treated them more like a partner rather than a boss-to-employee relationship. But as you grow as a company, you sometimes are left with no choice but to maintain the boss to employee relationship to steer the ship in the right direction and get the job done and to be honest – I fucking hate it. Sometimes I did wish I didn’t own 100% of Netmag and I went in starting as a partnership because then I wouldn’t always have to be the one bearing all the risk and decision making responsibility. I’ve worked corporate for 10+ years now and being the employee is so much easier. With that said, as Netmag continued to grow the past few years, the more I realized I needed help and the thought of being able to do everything on my own became unrealistic. Just 1.5 years ago, I hit this massive roadblock as there was just simply too much product and the operations and man power needed to grow. Then came the StockX and eBay angels lol.

The emergence of StockX and then eBay in that specific order really made me make a very important decision for the company within the last year or so. Even though we were constantly in GO mode all the time, I took a break and started to look at if the numbers made sense. At first StockX really wasn’t an option to my business because before they had bulk shipping, I still needed the man power to ship and print each box individually which at that point defeated the whole purpose of efficiency and it made sense for me to earn the 8-10% fee I was paying on my own. eBay at the time was out of the picture, but when they started roaring back with 0% final listing fees for sneakers over $100 – that was another game changer for me. Without getting into the details, basically having the competition of StockX and eBay was fucking amazing because that meant they had to keep fighting for the best deals for sellers and that ultimately benefited me. Then came StockX bulk shipping and I just so happen to be lucky enough to live in a major city like Toronto where StockX offered bulk shipping to their center just 30 mins away. In addition to that, StockX started offering perks such as better seller rates for those that can hit target ranges and as of today I’m paying 6% fee with FREE SHIPPING. The free shipping alone is more than enough incentive for me to just focus on StockX than selling through my own customers. Why? Because shipping cost is stupid expensive in 2022. The cost for me to ship a pair of shoes to the west coast easily costs me $30 CAD and that’s before insurance. If I’m selling a $200 sneaker and asking for $15 shipping only (because customers feel like you’re ripping them off if you charge any higher), I’m actually losing $15 just to ship direct to my customers versus I’m only paying $12 fee for peace of mind. THAT changed my whole perspective of how I wanted to do business going forward.

My shift towards being the middle man instead of selling direct to customer made a lot of sense. If you think about the human labor cost, it runs a typical company on average of 20-35% of gross sales. The fee I’m paying StockX now indirectly means I outsourced my entire operations to them for just a mere 6%. I don’t need to ever worry about customer service nor lost packages in the mail (which by the way is a major fucking headache). They essentially take care of my shipping cost, customer service and fulfillment. With all this taken care of, my problem of having to manage anyone is GONE because I don’t need a team to do fulfillment and print labels and pack. All I have to do now is simply focus on buying and managing inventory and keep tab of sales and listing all through my phone while being flexible and mobile. Every morning I just have throw all my sales overnight in bulk shipping boxes and call the UPS guy to pick them up directly from my front door. I don’t have to spend time answering emails and manage anyone anymore and so it seems my problems were yesterday.

At the end of the day, this is a major shift in my business that may very well turn out to be bad news for some of my customers because this means I’m not selling as much directly through my platform and eventually the Netmagnetism followers will slowly dwindle. Though this transition is unfortunate, but at the end of the day I do have to plan for the future as I need to be able to do what makes me happy. I’m not getting any younger and soon I’ll have to start my own family and the drive to hustle for the extra $ just isn’t in me anymore. Wait…I should rephrase…I need to be smarter with the way I make money and choose a way that creates the least stress for me. If the tools are there for me to produce the same bottom line with less headache, I’m sure anyone in my position would easily choose the same path I’m choosing 🙂

One thought

  1. Been subscribed to this blog for a while now, and whenever I have the chance to read it’s always a great first hand business angle from a person who’s doing the thing. It gives an insight on how running a shoe business can either be successful or crash. Love these articles, keep it up! I’m reading them!


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