Buying a pair of Air Jordans or Yeezys for $300 and selling them a year later for $1500 does sound like a wonderful investment. But is it that easy or way harder than we think?
In fact paying $300 and getting $1500 in return is a 400% ROI in one year.
Put that same $300 in the stock market for a year and you might earn 20-25% of your investment which is about $60 – $75.
Does a $1200 profit sound better than $75?
It absolutely does, and that’s why you might be thinking of buying and selling sneakers to make extra income.
But slow down there cowboy.
It’s not all black and white. Let me explain why investing in shoes may or may not be a good idea.
Short Answer: It depends. They CAN be an investment. Whether or not they are a good investment depends on your business experience and ability to get a hold of shoes and flip them when the market is hot.
Long Answer: It depends, it’s a risky investment and many variables come into play
It’s a risky business because shoes have an unpredictable market.
What might be “hot” today and in the next 6 months might completely die down in the next year for another 5 years.
A pair of shoes can be sitting at $2000 for the next 2 years but crash suddenly and be worth little-to-nothing.
You just don’t know what the market is going to do, and by the time they make a comeback they might be too old and falling apart.
Plus resale price isn’t always more than retail price.
You could invest in a $500 pair of shoes thinking they’ll go up to $1500 but does the complete opposite and drops to $60. That’s how unpredictable it is.
That’s a -88% loss of ROI, almost all of that $500 gone, down the drain, never to be seen again.
Sure you can up your chances by investing in limited edition sneakers but even those prices fluctuate a lot.
So is it a good idea to invest in a pair of shoes for the sole purpose of flipping them down the line?
Not really. It’s a hit or miss but with more chances of missing, especially for the average sneakerhead.
You have to know what you’re doing to make it worthwhile.
Sneaker prices can crash as quickly as they can go up, and that’s why it’s a risky business model to get into.
Should you do it?
Well that’s up to you.
In my opinion it’s too much hassle and stress to make it worthwhile.
You’re better off investing in the stock market or something similar and earning a nice 200 – 500% ROI over 5 years with medium risk.
I would rather see a steady climb in price rather than something that goes down as quickly as it goes up.
At least with the stock market the prices almost always goes back up once it falls.
But with sneakers there isn’t enough demand, so once it drops it could drop forever.
How to better your chances of increasing ROI
Take advantage of supply and demand
You should only invest in limited edition sneakers as they have more chances of going up as soon as they are sold.
But of course the downside is that you have to be ready and waiting on the website so you can cop yourself a pair.
For example: A pair of Yeezys sell out in literally minutes.
At this point the demand is still high. Don’t buy and hold for a couple of months or years as the demand gets lower and lower.
Buy and sell instantly, it’ll up your chances of getting a good ROI.
Popular brands ONLY
Sure you can spend $500 on a pair of sneakers but if no one knows about the brand, the demand isn’t there and the chances of reselling them are low.
I’ll break it down even more:
There needs to be more people wanting them than the amount of pairs available.
If they make 1000 shoes and 500 people want them, would it be a good investment?
But if they make 1000 shoes and 10,000 want them, THAT would be a better investment.
And the only way to achieve this is with popular brands because everyone wants them.
Hype is everything
Take advantage of hype.
People want whatever is trendy at the time.
That’s why you need to know whats’ “in” and what isn’t.
Hype puts sneaker prices through the roof and no hype crashes in an instant.
So go where your target market is and see what’s trendy.
Go to forums, blogs, Facebook groups. These are where potential buyers hang out.
Reddit is a gold mine.
It’s so popular and potential buyers literally talk about the exact shoes they want and how much they’re willing to pay.
I mean, that’s way better than guessing and hoping someone’s going to buy your 10 year old Air Jordans sometime soon.
Don’t wear the shoe
Wearing the shoe can be one of the worst things you do if you’re trying to sell them.
Putting the word “unworn” in front of a pair of sneakers will put you ahead of everyone else.
The value goes up immensely and betters your chance of making a high sale.
A quiet word
Yeezys were some of the most wanted shoes in the world and I have no doubt some people made thousands of dollars in profit.
However, Kanye West wants everyone to wear his shoes.
He has upped his supply which has caused the demand to go down.
I’m not saying that you can’t make a profit with Yeezys or that they don’t sell out within minutes because they definitely do.
But do know that the demand for Yeezys are declining and that can make it harder to make a sale.
It’s a business model, treat is as such
Treat it as a side hustle and you will make little or no money.
It’s a business model, and behind every successful business you will find a person that’s smart and in the know.
They carefully plan their tactics and know what they are going to do and when.
They hang out where their buyers are, finding out what’s hot and what’s not.
Do this and you have a much better chance of selling shoes at a high price.
Can you make a living flipping sneakers?
Yes you can but it’s easier said than done. There are far more people failing at this business model than those succeeding.
If you really want to invest in shoes and make decent money, be smart about it and apply the tactics I have mentioned in this article.
So are shoes a good investment?
The fact of the matter is, there’s a very small target of people willing to pay top dollar for sneakers.
And they are hard to find.
Sure you can strike a gold mine and may even do that a few times in your life (where you make 1000 – 4000% ROI), but those cases are rare.
I’m not bashing on the business model but I am trying to give you the raw truth before you go spending your entire paycheck on the latest and greatest sneaker that no one knows about.
Yes you can make thousands of dollars.
Yes you can make a good ROI.
But are they a good investment?
Depending on your business skills I will say no.
And the average person is not business savvy, so most people will lose money than make any.
Well I hope I have opened your eyes to the wonderful world of sneaker investing and I haven’t scared you away too much.
Let me know in the comments below if you’ve made any money investing in shoes or if you’re thinking of trying it.
I would love to hear your thoughts!