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How To Invest In Sneakers

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 8 minute read

Knowing how to purchase and sell shoes might make your investments a lot more enjoyable.
How To Invest In Sneakers? Sneakers are no longer simply for the streets. The resale of sneakers has grown to be a multibillion-dollar market. Selling shoes might be a method to make money, regardless of whether you’re a sneakerhead or not. When it comes to investing in shoes, there are certain key things to know about the resale market.

The shoe resale industry and how to get started investing in shoes are covered in further detail in the following sections.

What it means to buy shoes

The resale market for sneakers is growing at an astronomical rate, despite the fact that many people consider shoes to be a peculiar investment opportunity. The worldwide resale market for sneakers is expected to reach $30 billion by 2030, according to research company Cowen. The resale of sneakers is expected to surpass $2 billion in North America by the end of the year 2020.

Sneakers have been around for a long time, both in terms of fashion and popular consciousness. In the 1980s, however, when Michael Jordan and Nike teamed to market his Air Jordan brand shoes, consumers began to view sneakers as a collectible and desirable commodity. An event for the purchase, sale, and exchange of sneakers, Sneaker Con, was established by sneaker aficionados in 2009. Since its inception, Sneaker Con has held conventions in over 40 different places all over the globe.

By making it easier to sell outside of your local area, platforms like eBay fuelled the expansion of the sneaker resale sector. Several secondary sneaker reselling firms have also emerged in the last decade. Since its inception in 2015, the GOAT Group online marketplace has been backed by the retail giant Foot Locker. The high-end consignment business Flight Club has also joined forces with it in order to give customers both online and in-store choices.

Sneaker reselling is being revolutionized by companies like StockX. Sneaker’s reselling site boasted of becoming the first stock exchange for goods, processing over $7.5 million in deals in 2020 alone.

Since his final season in the NBA in 2003, Michael Jordan’s sneaker company has continued to expand despite his absence from the game. A classic Air Jordan model is always in high demand, both as a collector’s item and an investment. Every year, Nike releases fresh hues and new versions of legendary Jordan sneakers. The resale market for shoes isn’t just dominated by Jordans. The following are some of the most popular footwear:

  • Adidas Yeezy Boost
  • Hoka One One
  • Nike Air Force 1

Shoes that were originally sold for hundreds or even thousands of dollars have now become collectibles. MyVoucherCodes, a website headquartered in the United Kingdom, analyzed the worth of 50 pairs of shoes to determine how much they had risen in value since their release date. Air Yeezy 2 Red October, which was inspired by Kanye West, originally cost $250. This pair of Yeezys is now worth $5,655, a return on investment of 2162 percent (as of Feb. 23, 2021 ). When it first went on sale in 2011, the Jordan 5 Retro Tokyo T23 cost $206. 

The value of this pair of Jordans has increased by 1703 percent (as of Feb. 23, 2021).
However, you can’t always get your hands on the shoes you wish to buy and resale because of limited supply and high demand. When shoes are on sale online, you’re typically up against folks from all around the world for the same pair. This is one of several variables that affect whether or not a pair of shoes will appreciate in value:

  • Supply and demand affect the value of a shoe. In the event that more people want a shoe model than the shoe maker releases, the resale value of that shoe model will increase.
  • Releases of a limited number. There are a few popular shoe releases that have a limited supply. Others are only accessible in a few markets. Player exclusives from companies like Nike, Adidas, and Under Armour are made available to the general public in limited quantities by companies like these. It’s a specific version of the sneaker that athletes are given permission to wear. The resale value skyrockets as soon as they hit the retail market.
  • New releases are expected to be in pristine shape when they are first made available to the public. The condition of the shoes is an important factor in determining how much you can obtain for them when you decide to put them up for sale.

Reselling shoes may be a lucrative business if you know what you’re doing and are willing to put in the time and effort. The Maine-based pair behind the shoe resale company RNZY, sold practically every brand of shoe they could find, including Nike, Adidas, Reebok, Saucony, Puma, Asics, and more, and developed a six-figure business selling them. On YouTube and in a podcast, Ryan and Lindsey educate others on how to resale their shoes, which have sold more than 17,000 pairs.

Pros and Cons

Pros 

  • Allows you to make extra money on the side if you’d like.
  • To become a full-time reseller, some people have earned enough money.
  • Flip-flops are rather easy to get by in the regular shoe department.
  • Meet fellow sneakerheads and share your passion for the sport.
  • The history of sneakers as we know it

Cons

  • The market is quite competitive.
  • Cleaning and shipping materials are also included in the upfront fees.
  • Reselling platform charges
  • Certain popular releases have extremely limited and difficult-to-find stock.

The best way to invest in sneakers

How to find the best shoes

You must first discover shoes to sell before you can invest in sneakers. Shoes aren’t hard to come by, but profit-making shoes are more difficult to locate.

New shoes can be purchased via retail establishments or from the internet. To keep track of the arrival of new shoes, several businesses have even developed applications for smartphones. The SNKRS app, developed by Nike, allows you to stay up to date on forthcoming releases and receive alerts when a deal on your favorite sneakers occurs. You may then buy shoes directly from the app. A comparable experience may be had by Adidas fans using the CONFIRMED app.

There’s a lot of chance involved in purchasing sneakers via smartphone apps. Intense bidding wars often result in consumers walking away empty-handed. Raffles and social media contests are frequently used by shoe stores as a way of determining who gets to purchase exclusive sneaker releases. In order to get your hands on a pair of limited-edition sneakers, you’ll need a little bit of luck. Buying sneakers from secondary sneaker resale websites is an option, but the cost is higher and so reduces your profits.

If you’re looking to resell sneakers, these aren’t the only options available. Quality shoes may be found at low costs at TJ Maxx, Marshalls, or retail outlet stores such as JCPenney. Also, keep an eye out for bargains in department shops, shoe stores, and other retail establishments. If you’re trying to make some extra money by selling your old goods, a thrift store can be a good place to look.

How to resell your shoes

Selling sneakers online is a cinch because of the abundance of options. Some of the most popular secondary shoe reselling websites are:

  • StockX
  • GOAT Group
  • Stadium Goods
  • Flight Club
  • Grailed, Inc.
  • KLEKT
  • Kixify
  • Sole Supremacy
  • SoleStage
  • Urban Necessities

Be aware that each site has its own set of rules for selling shoes. Each of these sites has a different fee structure. When calculating your optimum selling price, don’t forget to account for seller fees and delivery charges.

Sneaker consignment businesses may also be found on the internet. Even though these sites aren’t especially for sneakers, there are thousands of listings for shoes on them. Among the most well-known websites for consignment sales are:

  • Mercari
  • OfferUp
  • Poshmark
  • thredUP
  • The RealReal

Old-school channels like eBay and Amazon are also viable possibilities, especially if you’ve previously sold on them. Secondary marketplaces like Facebook Marketplace and Craigslist are great options for local shoe resale if you don’t want to send anything. You may also offer your sneakers for sale on Instagram or another social media platform.

Sneaker business knowledge is one of the finest ways to become a better reseller. The market history of well-known shoes may be seen on sites like StockX. Use that data to keep up with the latest trends and evaluate which shoes have the most resale value.

Also, you may utilize that information to price your shoes. Price your shoes in accordance with what other people are selling them for. When it comes to pricing shoes, veteran reseller Jason Butler from My Money Chronicles turns to eBay.

When it comes to determining the average sale price on eBay, Butler explains, “I look at the sold section”. It’s from there that I arrive at comparable pricing. You may increase your chances of selling shoes by creating a high-quality web listing. Following these four suggestions from Butler can help you build the greatest listings possible:

  • Be sure to get some great shots.
  • Shoe shine is a must!
  • Make a note of any blemishes or rips in the fabric in your listing.
  • Don’t price yourself out of the market.

Sneakers may be purchased in a more convenient manner.

There is a method to invest in shoes without having to deal with the hassle of purchasing and selling them online. Collectibles, fine art, and even sneakers may be purchased via Otis, an alternative asset investment firm.

Investing in sneakers may seem out of place, but Otis isn’t dealing with the kind of shoes you’d find at a sports goods shop. The “Shattered Backboard” AJ1 worn by Michael Jordan during an exhibition game in Italy in 1985 is one of its most valuable possessions. On one of his many dunk attempts, Michael Jordan managed to break the backboard in midair. The soles of the shoes still have a fragment of the backboard glass. To date, this is the most expensive pair of sneakers ever bought and sold in a retail store setting.

How to invest on Otis

The Otis crew obtains assets, gets them securitized with the SEC, and breaks them into shares. In the financial markets, securitization is the process of converting an asset into a financial instrument. Every week, new resources are uploaded. Members of Otis have the option of purchasing assets and then reselling those assets to other members.

For the cost of the shares, a daily clearing price is established. The asset’s owner and Otis have agreed to a mutually agreed-upon price for the asset. Members of the Otis community can enter the highest price they’re prepared to pay for each share and the number of shares they want to buy. As long as this bid is over the clearance price, the transaction will be completed.

For asset sales, Otis maintains 10% of the proceeds and distributes everything else to shareholders. As part of your initial share purchase, Otis charges an upfront sourcing fee of between 0% and 10%. As of now, Otis does not collect any fees for its investment services.

You must be at least 18 years old and a US citizen or resident to establish an Otis account. 

To deposit money into your Otis cash account, you’ll need a bank account. Unaccredited investors are welcome to join Otis.

Bottom line

It’s not without danger, but for some, learning how to invest money through sneaker resale might be a worthwhile side business or full-time job. Find the greatest sneakers for flipping by doing your research. If you want to be a successful sneaker reseller, don’t underestimate how much time and effort it takes. For those who lack the time and finances to actively buy and sell shoes, investing via Otis is a viable alternative.

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