The shoe/sneaker resale market is very lucrative, and with exclusive sneakers releasing frequently, insiders estimate that this secondary market is currently valued at around $6bn. While only 4% of shoes and sneakers are purchased upon release for resale, the market benefits from hustlers and entrepreneurs looking to pounce on the huge margins to be made.
Limited edition shoes
Certain limited-issue shoes are released for sale by a major shoe company, usually Nike or Adidas. They can be associated with an athlete, hip-hop star pr even a movie. Three examples of the Hip-Hop/sneaker collaboration are the Nike Air Yeezy 2 “Red October”, Adidas Yeezy Boost 350 “Turtledove” and Air Jordan 1 x Off-White “Chicago”.
Most shoes would actually fetch less than retail at resell. However, the above shoes were all released in limited editions retailing at $190-$240, with the resale value averaged between $1,695–$6,118, per Stock X.
Essentially hype and rarity are what makes these shoes ‘limited edition’.
If a shoe is hyped but not rare, anyone can get their hands on a pair for retail and you won’t make any money. If a shoe is rare but not hyped, nobody can get their hands on a pair, but nobody cares — and you won’t make any money. So if you get your hands on shoes that are both full of hype and rare – you’re in the sweet spot.
You can buy certain sneakers at retail price and sell them on a secondary market for at least 2-3 times the retail price.
Why are they worth so much?
19-year old Brandon Webb has made a living by taking advantage of the high-ticket sneaker reseller market. He is the founder of Hypluxe, a members-only community that teaches sales secrets of the massive secondary market for limited-edition sneakers.
He explains to Entrepreneur.com – “It all comes down to supply and demand. Companies like Nike and Adidas release exclusive sneakers in collaboration with celebrities and artists like Virgil Abloh and Kanye West, as well as updated versions of classic models. Resellers know these sneakers will sell out, and so does everyone who wants to wear them. The combination of limited availability and hype drives prices through the roof on the secondary market.”
“Sneaker blogs now make lists of the ‘most popular upcoming sneakers’ and update them weekly. They even tell you exactly what websites they’ll be releasing on. In short, if there is hype and exclusivity, there’s money to be made.”
To find out which shoes are hot, trending or upcoming, check out Hyperbeast and High Snobiety. Both are fashion sites that extensively cover information and news about the culture for sneaker-lovers of all levels.
Those in-demand shoes cannot simply be bought from your local retailer. To get hold of them, you can try raffles that are set up by retailers or try camping outside for a first-come first-serve option.
The average shoe reseller will use computer programs called bots to try to get their hands on sneakers. Bots virtually automate everything, attempting to rapidly check out multiple pairs from websites before they sell out, much faster than any human could. As you’d expect, bots available to the public are inferior to those used privately.
However, the people making the most money from shoe reselling have connections with investors, elite hackers, and industry insiders, as well as access to private software that essentially gives them a monopoly over the supply.
Expert resellers like Brandon Webb have built up insider connections that provide him with exact stock numbers. This helps him understand just how limited the shoe stock is. As a result he knows what’s going to be profitable far before they’re released.
To truly benefit from reselling shoes, you need to purchase products that are sold on the cheap but have lasting value in the long run. One way of doing so is by buying the sneaker on release day at retail prices, which is where they are at their most affordable
However, new pairs of shoes come far and few in between. To make money in reselling shoes, you need to find pairs sold under reseller price so you can profit off them.
How much and where to sell?
StockX is a site that shows how much the shoes cost over a 12-month period. Just like a stock market index graph, you will see the movement of price over time, thus giving you information on which shoes to acquire for reselling. It also serves as a consignment store where people can bid or ask for shoes for resale. If you have a pair of sneakers you want to sell, you could do so through the site.
StockX bridges the gap between buyers and sellers by allowing buyers to bid on available limited edition shoes. They have an authentication process which takes the guesswork out of trying to ensure shoes are not counterfeit, which is a glaring issue in the sneaker industry.
This is by far the safest and often the cheapest way to buy sneakers, and the company has only been growing in recent years. Stock X makes money off of both the buyer and seller with the commission fees, and both parties are entitled to lower fees if they buy/sell more. Once you have the information you need, it’s time to search for those shoes online.
The marketplace for reselling sneakers was once fragmented, but today there are dedicated marketplaces for sneakers, such as StockX, Hypremium, and GOAT, where all trading can be conducted through an app. These platforms provide a digital-native audience with a more formalized process and a plethora of choice.
Being such a cool and trendy niche, sneaker selling has allowed the tech-savvy youth to channel their creative juices and use their resources into doing something productive. This is a market that anyone can tap into. Of course, as with anything it has to be the right product on the right platform in order to create a lucrative business.
If you’d like to learn more about online marketing, or if sneaker reselling isn’t your thing but you’d like to know how to create, brand and sell other products online – then click here. I’ll send you a series of free video workshops run by my mentor who presents how you can create an online business and live the lifestyle you seek.