Let’s Address the Elephant in the Room – WHATNOT

Not sure where to begin with this one because this was probably one of our BEST business decisions in our 10+ year history in the business. Of course our previous best business decision was starting our Instagram page relatively early and being one of the early adopters on IG when it wasn’t mainstream for selling sneakers and that gave us a huge head start against future competitors.  At the time, who knew a platform where sneakerheads shared their on foot pics/collection would become one of the biggest platforms for sneakerheads to source and find sneakers – trust me, this sounded super foreign and out of this world at the time. But it all made sense just a few years in and the whole community hopped on and if you were a sneaker reseller and you didn’t have a IG, you are missing out greatly. As I mentioned many times, IG was 100% of our source of income 3-5 years ago and now fast forward to 2023, we basically don’t even use IG at all. From a revenue generating process it probably represents less than 1% of our annual sales. So where they we shift to? One answer – Whatnot -the online livestreaming platform that no one believes in…YET!

So what is Whatnot and how did we get started? It all started with a simple DM from a previous customer who ended up being a youtuber who eventually landed a gig at the company. I still remember the conversation as his first question to me was…”have you heard of Whatnot and what are your thoughts on livestreaming?” As you can tell from our initial conversation just like many of you out there…I was skeptical, but after a little bit of convincing, I took the leap of faith.

Here’s the kicker that most people didn’t know. Before I said I was going to give livestreaming a shot, I was later told that there was a perk into selling on the platform and signing on as a partnership. What’s the kicker? Cash money baby! Now that the first contract I initially signed is over and we’re already on the new contract, I am able to disclose some of the details. So as part of the incentive of being a seller on the platform, they gave me a bonus of $4,000 USD per month for hitting a sales target (at the time approx $120k/month in sales) with an additional $1,000 USD/month as giveaway promotion to our viewers. After saying yes to take on the new role and knowing afterwards that there was an incentive tied into the deal, it was an absolute no brainer for me. I saw this opportunity as a way to give livestreaming a shot and be one of the pioneers in North America and a good way to shed some old inventory we have on the books. Even if I lost money on the inventory, I had a pretty decent buffer of $5,000 to cover it. As to the camera shy and not wanting to do live selling in front of the camera…well that goes out the door because sometimes you just have to do what’s best for the business – by any means necessary.

I’ve been selling on StockX and eBay for many years and there wasn’t any deal like this ever offered to me. The best I ever gotten was maybe a $200 credit or seeded a free pair of shoes. Other than that there were no perks close to this amount and at the end of the first contract I have some pocket change to stuff my pocket with and that pocket change amounted to be about $40,000 USD. Now the next hurdle and the numerous amount of hurdles I needed to figure out:

1. How do I navigate and sell on this platform – got to learn everything from scratch
2. How do I hit the sales target of $120k/month
3. How do I keep viewer’s interest and how do I differentiate from other sellers already on the platform
4. What products sells best and what doesn’t – Who are my buyers?
5. How do I generate enough interest for them to return, yet still remain profitable

Trust me, there were a ton more questions and hurdles I had to endure, but just like anything in life. If it was easy, EVERYONE can be doing it. In business sometimes the more difficult a situation is, the higher the chance you can succeed because your competitors will the see issues/hurdles like mount Everest and they would give up before even consider starting. I was at an advantage because I had mentorship and all the resources needed to jump start into the platform as a new seller. At the time we started, it was pretty much a fair playground in terms of competition. There weren’t many big players and everyone was trying to figure each other out. Compared to today, if you were to start on the platform now, it’s probably 10x harder to be successful compared to 1-2 years ago (ie. same analogy on the Instagram platform we had to endure 5 years ago). 

I’ll skip all the obstacles we had to endure and jump to today. How is Whatnot for us as a business after being on there for 1 year. In terms of sales we were able to get back to our Covid level sales in 2020 from a business standpoint, which is huge because during Covid our Sales basically exploded and we doubled and almost tripled. 2020 was a year where every reseller was eating…if you weren’t, you were basically doing something wrong. Yes, our sales is now back back to our highest point, but the most important key is that our core customer group has changed drastically. We shifted from unique and hard to find sneaker reseller to EVERYDAY sneakers reseller. What does this mean? Yes, the Off White Chicago’s, LV AF1, and Zoo York Dunk SBs are cool and prestigious, but they don’t reflect EVERYDAY sales. White on White AF1, Retail sneakers going on discount are what a bigger chunk of the market can absorb and that meant everyday business and sales.  We were able to find a good hybrid model that would allow us to capture this segment of the market while keeping some of our old customers that loves the hard to find sneakers. Less time spent sourcing sneakers meant more time actually selling sneakers and expanding our reach. More turnover and higher CF’s meant we have more buying and bargaining power with sellers. As a result of the high sales target we were required to hit to unlock the bonus allowed me to be more disciplined with my inventory. If it doesn’t sell, we get rid of it and move on and focus on what does sell. We get real time feedback as to what the market wants. The high CF and turnover also allowed me to pay off all the company’s debt and now we have about $1 Million CDN dollar in liquid cash to do buyouts and to hop on any business investments we deem appropriate.

Last but not least…we were able to get back to our historical high in terms of sales as a business in a sneaker recession today means that once the sneaker market booms again, we should be able to bring our business to the next level. We definitely had our highs and lows on the platform, but I think we found just our niche as to where we want to be as a company. Whatnot may not necessarily translate well for sellers that aren’t able to adjust dynamically on the fly with the consumers, but if you’re able to…having an extra platform to sell your product on top of where you are already selling is already a win win situation in my opinion. Until next time…