Sneaker Resale: A Viable Way to Make Money?

Written by Elton Zheng '22

Twenty years ago, the digital marketplace was just beginning to emerge. At the time, the only method of buying shoes online was browsing dubious online forums and message boards. By 2010, sneaker e-commerce had drastically improved, mostly taking place over eBay. However, eBay was notorious for counterfeit sneakers, and it still is today. Finally, five years ago, digital companies such as StockX, Grailed, and Goat became mainstream, and the internet became the main place to trade sneakers, largely replacing traditional storefronts like Stadium Goods. Last July, StockX was valued at over $1 billion. Sneaker resale is currently estimated to be a $2 billion market and is projected to reach $6 billion by 2025. Clearly, there is a lot of money to be made.

Today, sneaker resale can indeed be very profitable, and there are two major ways to begin making money. Buying and selling sneakers, also known as “flipping”, is the more well-known method. The second approach requires more knowledge and connections but offers a significantly safer business model: knowledgeable sneaker entrepreneurs distribute their advice to traders, and the traders pay monthly fees. These advisors and their clients are known as “cook groups”, exchanging information on how to “cook”, which is their term for trading sneakers.

While flipping sneakers may be the easier option, or at least seem like it, making a profit is harder than it looks. To make money, a sneaker flipper needs to buy sneakers at a lower price than what is available to the public, and to do this, they must first have special access that the average person does not. Generally, they look at highly coveted sneakers, such as some releases of the Air Jordan 1 that tend to sell out instantly, or rare items, like the Nike Mag, which was featured in the movie Back to the Future which has sold for over $10,000.

“Source the unsourceable”, explains Joe Franklin, who has sold shoes worth tens of thousands of dollars—each. In the past, a flipper could have a more than ample head start by waiting a few hours outside a sneaker store before a sale. These days, acquiring sneakers has become much more competitive, and dozens of buyers will bring lawn chairs or sleeping bags to a store location and camp there for days before the actual sale. As a result, buying sneakers this way has become unrealistic. But, the digital age provides hope. One way a flipper can get a head start is by building connections with smaller retail companies, sometimes by buying lots of merchandise or meeting with the company staff in person. Knowing the date that a particular item will go for sale just a few days ahead of the competition can be a game-changer, because, by the time the actual sale happens, it is too late. Flipping can bring you massive returns, sometimes within a relatively short time. However, in many ways, it is riskier than running a cook group, which can provide a relatively stable income.

For $50 a month, you can join a cook group. Over a messenger platform, such as Discord, you will gain access to all of the group’s services, which include pre-programmed sneaker-buying bots, raffles from all over the internet, insider updates, hard-to-get partnerships, digital services, and most importantly, exclusive advice. Some cook groups even provide clients with 24/7 support. Aaron Maresky, at 19 years old, operates one such cook group called AMNotify. His story began at 15 when he borrowed $350 from his father to buy a pair of OVO x Jordan 12s. Shrewdly, he immediately sold them for $750, and with his $400 profit, he then bought a pair of Adidas Yeezys, which he also sold as well. From rigging sweepstakes to giving away hundreds of pizzas, he was creative and effective in building his business. Maresky and his company AMNotify gained connections to many major sneaker retailers. Today, he has more than a thousand clients who pay $60 a month to be a part of AMNotify. The value of a cook group depends heavily on its reputation due to the risk involved in the sneaker resale industry, but Maresky has plenty of proof of AMNotify’s value: in one statement, he claimed that of the 500 Post Malone Crocs initially released, AMNotify members own 450 of them. Some customers spend $2,500 for a lifetime membership, and many would make their money back within just a week. Running a cook group can provide a steady income once successful, but not without first building a reputation for your services.

Over the past two decades, the sneaker resale industry has evolved dramatically, and without a doubt, it will continue to change. Fashion resale is based heavily on artificial scarcity, and so far, this business model has generally been largely successful all around. In 2018, Burberry controversially burned more than £28 million, equivalent to $35 million, worth of unsold clothes, as a way to maintain their artificial scarcity. That year, its total revenue was over $3 billion. Much of the sneaker industry operates on the same principals, at least for the models that manufacturers such as Nike and Adidas intend for the resale market. In 2014, Nike released its Air Jordan 1 Retro Fragment, which showcased a balanced blue leather color pattern, also known as a colorway. It retailed for $165. This May, Nike released the Air Jordan 1 Retro High Royal Toe, which was patterned with an almost identical colorway, but not quite as balanced, retailing for $170. Currently, the Fragment sneakers resell for almost $4,000, while the Royal Toe resells around $300. Many sneaker enthusiasts suspect that Nike intentionally designed an inferior colorway to keep the demand high for its Air Jordan Fragment sneakers. Strategies like these drive the resale market, ultimately benefiting both the sneaker entrepreneurs and retailers like Nike. Nevertheless, as physical retail declines, the sneaker industry will undoubtedly grow, and from it, resale opportunities will continue to arise. However, obtaining these opportunities, from building a cook group to flipping Yeezys, will require risk, connections, and most importantly, knowledge.

Five pairs of Travis Scott Air Jordans, worth $1,000 each.

Image from StashedSNKRS. https://stashedsnkrs.com/products/sneakers-reselling-guide

Royal Toe vs. Fragment Sneakers