Do not enter this Market unless you are a Seasoned Sneakerhead
With the highly anticipated Air Jordan 1 "Lost & Found" set to release on November 19th, now is an excellent time to begin investing in shoes. The habit of reselling limited edition sneakers is divisive, and any sneakerhead can explain how bidding up prices affects shoe culture. One thing is certain: Even if you aren't particularly fond of the shoes themselves, investing in and reselling limited-edition footwear has the potential to be a successful side job. Is it, nevertheless, appropriate for you? Before you get into the sneakerhead game, here's what you should know about the resale value of limited-edition sneakers.
Sneakers are a high-risk decision
First, let's go through the basics of the sneaker resale industry. The desired sneakers are available in limited quantities, yet "limited" might mean different things to different people. For example, it is claimed that 500,000 pairs of the new Jordans will be sold internationally beginning tomorrow. Resellers jump in and buy shoes at retail price from retailers or manufacturers. After stocking up on shoes, these resellers mark them up and offer them to purchasers on marketplaces like StockX.
The term StockX is a bit misleading. Purchasing shoes is not the same as purchasing stocks. To limit your risk as an investor, you should establish a varied and balanced portfolio of equities. To profit from a shoe investment, though, you need considerably more particular understanding of the niche product you're reselling to in order to develop a sound plan.
Even yet, there are several hazards to investing in shoes as a commodity. Even educated sneakerheads can't always forecast a given shoe's potential resale value. It's a fast-paced business, and many limited edition shoes have little long-term value for investors.
Everything is hype (and research).
Your shoe investment, like most other business ventures, is based on the simple supply and demand concept. As sneakerhead YouTuber Keith Adam argues in this video, the evident buzz around these limited-edition kicks, along with the promise of "only" 500,000 pairs being released worldwide, implies these sneakers will be profitable for resellers. They retail for $180, and Adam is one of several who believe the reseller price will exceed $300, making your original investment well worth your time.
However, consider all of the hidden expenses associated with resale. For example, StockX charges sellers a 10% transaction fee plus a 3% payment processing fee. Complex explains what this implies for resellers: "...if you buy a shoe at retail for $100, plus $8 in sales tax and $10 for shipping, you're looking at a starting price of $118." If you sold that shoe for $200 as a first-time seller on StockX, you will be charged a transaction fee of $20 and a payment processing fee of $6. When all is said and done, you've earned $56."
Finally, all vendors agree on one point: you have to know what you're doing. Hype is intimately related to a shoe's value, and hype is untrustworthy.
Suggestions for Buying Sneakers
If you want to get started, take the following advice from Richard Xia, CEO and Co-Founder of sneaker marketplace Novelship, as shared with AsiaOne.
The resale value was determined by hype and genuineness.
Non-authentic shoes have no market value. If you plan to resale your shoes, make sure you purchase them from a reliable source, since most platforms need some type of identification to prevent fraud.
You can't pretend until you make it
Before you go in, you need do a lot of study and master the sneakerhead language. Keeping track of trends and looking for patterns in resale for the brands and series of shoes that interest you. You'll make better investing decisions if you know the commodity and the community inside and out.
Invest in a bot as well
Many resellers rely on bots that are designed to acquire big volumes of shoes at once. These bots are pricey (think $1,000-$8,000), but they are becoming increasingly important for having a footing in the market, according to Complex sneaker reseller specialist Ari Sarafyan.
In conclusion
A Jordan-sized leap of faith is required for any investment in reselling limited-edition sneakers. Taking the risk will be less frightening for seasoned sneakerheads who have researched the patterns and knows how to appropriately judge the hype around the next big release.
So, before you start investing on shoes, start with your time. Explore sneaker culture and refine your ability to identify sneakers that are likely to be a rewarding investment.
#Sneakers #Jordans #StockX #AirJordan #Seakerhead #RubberShoes
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