- A Cowen & Co. analysis from July estimates that the sneaker resale industry is worth $2 billion in North America and could reach $30 billion globally by 2030.
- As the market for valuable sneakers booms, entrepreneurs are making a killing by figuring out the best ways to buy and resell sneakers.
- Insider regularly interviews sneaker resellers and experts regarding the best practices for breaking into the industry and scaling a business. You can read all about it by subscribing to Insider.
- See more stories on Insider’s business page.
With the sneaker resale market continuing to thrive, Insider is covering all aspects of how to properly scale a business in the booming industry. From which sneakers to purchase to necessary technological investments, made in the form of bots that entrepreneurs entrust to nab pairs online, the following covers everything you need to know about how to break into the market that Cowen & Co. estimates could reach $30 billion globally by 2030.
Getting started
Sneaker reselling is based on a simple concept that guides many other businesses: buy low, sell high. You’ll want to figure out how to track expenses and figure out net profit on each pair sold. One entrepreneur who made over $125,000 in sales since January 2019 showed us his spreadsheet that he uses for tracking profits. You’ll also want to figure out your strategy. While some people might prefer to invest in a few pairs and wait for them to grow in value, others utilize a high-volume sneaker resale strategy to make money by moving product quickly at slimmer margins. Others focus on acquiring rarer pairs that can fetch thousands at auction. Some have even developed mathematical formulas to determine the best way to buy and sell. Lastly, it can be helpful to take a look at some up-and-coming sneaker resale websites to learn about new ways to make money in the industry.
Scaling your business
Once you nail down the basics, here are some tools to guide you on the next steps of growing your business. While many sneaker resellers can start from humble beginnings, it can take just a few months to hit sustainable profit margins. Attending sneaker events like Sneaker Con is a great way to build connections and make fast sales. But as your business grows, it is important to keep track of all of your sales and expenses to ensure that you file your taxes correctly each year.
Read more: Here are 5 steps that independent sneaker resellers live by to pay their taxes every season
Sneaker botting
In the sneaker resale world, a “bot” refers to a software application that expedites the online checkout process and helps resellers nab hyped pairs online – including limited-edition drops. Though a controversial aspect of the sneaker world, bots are often essential for purchasing the latest releases at retail prices. In many cases, these bots are built by former sneakerheads and self-taught developers who make a killing from their useful product. Bots, like sneakers, can resell for hundreds of dollars. There are even some bots that are meant to help users nab sneaker bots at retail. While sneaker-nabbing bots can give resellers a leg-up, they are often the cause of much distress on the side of footwear companies who are looking to mitigate the problem.
Cook groups and online services:
While they normally charge hefty membership fees, cook groups are exclusive forums that supply information for anyone looking to break into the multi-billion dollar market. They usually offer members access to botting services in addition to exclusive details related to drops. We got a look inside a couple of these groups, including Polar Chefs, a thriving cook group with over 400 members that was started by a teenager who employs 23 people to help him run the group. Cook groups are often run on Discord, a messaging platform that has become a hotbed for sneakerhead activity.
Navigating the industry during the pandemic
While slowdowns in shipping and supply chains caused some problems for the sneaker industry early on in the pandemic, the value of certain pairs, like the Air Force 1 and Air Jordan 1, has remained strong. Experts say that some pairs, like the Nike SB Dunk Low Travis Scotts or the Jordan 5 Retro High Off-Whites, will likely skyrocket in value after the pandemic. The CEOs of GOAT, Stadium Goods, and Bump all predicted that the sneaker resale market will continue to grow, and the proof is in the businesses. One teen entrepreneur that we spoke to said his business soared during the pandemic, bringing in close to $500,000 in sales during quarantine.