Sneakers aren't just streetwear anymore. Sneaker resale has become a multibillion-dollar industry. Whether you’re a sneaker enthusiast or just looking to earn some extra income, selling shoes could be a way to earn money. But there are some important things you need to know about the resale business if you want to start investing in sneakers.
Keep reading to learn more about the shoe resale business and how you can get started investing in sneakers.
What investing in sneakers means
You may think shoes are a strange thing to invest in, but the sneaker resale market continues to grow by leaps and bounds. Research firm Cowen estimates that the global sneaker resale market will reach $30 billion by 2030. As of July 2020, sneaker resale accounted for more than $2 billion in North America alone.
Sneakers have long been a part of fashion and culture. But it wasn’t until the 1980s when Michael Jordan and Nike partnered to sell his signature Air Jordan brand shoes that people saw sneakers as something to be coveted, collected, and sold. By 2009, sneaker enthusiasts had founded Sneaker Con, an event for buying, selling, and trading sneakers. Since its founding, Sneaker Con has hosted events in more than 40 cities around the world.
The growth of the sneaker resale industry was fueled by websites like eBay offering a way to sell beyond local markets. The past decade has also seen the rise of several secondary sneaker resale businesses. Online marketplace GOAT Group launched in 2015 and received a $100 million investment from retail giant Foot Locker in 2019. It also formed a partnership with high-end consignment shop Flight Club to provide online and retail options to consumers.
StockX is another company that’s changed the landscape of sneaker resale. Touted as the first stock exchange for things, the online sneaker resale site processed more than $7.5 million in trades during 2020 alone.
And although Michael Jordan hasn’t played professional basketball since the 2003 season, his shoe empire continues to grow. Retro Air Jordans continue to be among the most popular shoes to own and resell. Nike continues to release new versions and colorways of classic Jordan sneakers each year.
Jordans aren’t the only popular shoe in the resale market. Other top shoes include:
- Adidas Yeezy Boost
- Hoka One One
- Nike Air Force 1
Some shoes are now worth thousands of dollars more than their original retail price. U.K.-based website MyVoucherCodes researched 50 pairs of sneakers to see how much their values increased since their original release date. The Kanye West-inspired Air Yeezy 2 Red October, released in 2014, carried a $250 original price tag. The current value for this pair of Yeezys is estimated at $5,655, a 2162% return on the initial investment (as of Feb. 23, 2021 ). The Jordan 5 Retro Tokyo T23 initially sold for $206 in 2011. Now, this pair of Jordans is worth $3,715, a 1703% increase (as of Feb. 23, 2021).
But because there are limited releases and high demands for some shoes, there’s no guarantee you will score the shoes you want to buy and resell. With online shoe releases, often you’re competing with people around the world for the same shoes. This is among several factors that play into whether the value of a pair of shoes might increase:
- Consumer demand: Supply and demand play a role in a sneaker’s value. If more people are interested in a shoe model than the shoe company releases, it creates a greater demand, driving up resale prices.
- Limited edition releases: Some popular shoe releases are limited to small runs. Others are available only in specific markets. Companies like Nike, Adidas, and Under Armour release limited supplies of player exclusives to the public. These are special versions of a shoe given to athletes to wear. As soon as they are released in the retail market, the resale value starts to skyrocket.
- Condition: You expect brand new releases to be in mint condition. There’s also a resale market for used shoes, though, and their condition plays a role in getting top dollar for them.
The reality is that there might be an opportunity to make money reselling almost any type of shoe if you know what you’re doing and put enough effort into it. Ryan and Lindsay, the Maine-based couple behind the shoe resale business RYZN, built a six-figure business selling nearly every shoe brand they could find, including Nike, Adidas, Reebok, Saucony, Puma, Asics, and much more. Ryan and Lindsay have sold more than 17,000 pairs of shoes to date, and they’ve also started a YouTube channel and podcast to teach other people how to resell.
Pros of investing in sneakers
- Creates the potential for you to earn extra income on the side
- Some people earn enough to become full-time resellers
- Relatively easy to find everyday shoes to flip
- Network with other sneaker enthusiasts
- A deeper knowledge of the history of sneakers
Cons of investing in sneakers
- Highly competitive market
- Upfront costs, including buying the shoes as well as cleaning and shipping supplies
- Resale platform fees
- Limited and hard-to-get stock on certain popular releases
How to invest in sneakers
How to find the best shoes
To invest in sneakers, you first need to find shoes to sell. Shoes aren’t hard to find, but shoes that might sell for a profit are harder to come by.
You can purchase new shoes in retail stores or online. Some companies have even created mobile apps to manage releases of new shoes. Nike created the SNKRS app, which allows you to get information on upcoming releases and set up notifications when a sneaker sale drops. You can then purchase shoes directly through the mobile app. The Adidas CONFIRMED app offers a similar experience for fans of its shoes.
Unfortunately, buying sneakers through these mobile apps involves a lot of luck. The competition to purchase them first is fierce and often leaves many buyers empty-handed. Shoe retailers also utilize raffles and social media contests to determine who gets a chance to buy exclusive sneaker releases. Again, there’s luck involved to land a spot in line to purchase exclusive sneakers. You can buy sneakers at secondary sneaker resale websites, but you’ll pay a premium, cutting into potential profits.
The good news is these aren’t the only places to look for sneakers to resell. Stores like TJ Maxx, Marshalls, and retail outlet stores often carry quality shoes at discounted prices. Also, check the clearance racks at department stores, shoe stores, and other retail locations. Thrift stores could be another option for finding hidden gems since people looking to turn old stuff into extra cash might not realize exactly what they own.
How to resell your shoes
There’s no shortage of places to sell sneakers online. Secondary sneaker resale websites include:
- GOAT Group
- Stadium Goods
- Flight Club
- Grailed, Inc.
- Sole Supremacy
- Urban Necessities
Keep in mind that each site has its own set of guidelines for selling sneakers. Fee structures also vary between each of these sites. Always include seller fees and shipping costs when determining your ideal resale price.
Online consignment shops are another spot for sneaker reselling. These sites aren’t specifically geared toward sneakers but still have thousands of listings for shoes. Popular consignment sites include:
- The RealReal
Old standbys like eBay and Amazon are other options to consider, especially if you already have experience selling on those sites. If you’d rather not ship sneakers, you can resell shoes locally through secondary markets like Facebook Marketplace and Craigslist. Another option is to use social media channels like Instagram to list the sneakers you are selling.
One of the best things you can do to become a better reseller is to learn more about the sneaker industry. Sites like StockX show the market history of popular shoes. Use that information to follow trends and determine which shoes show more potential when it comes to resale.
You can also use that info to price your shoes. Look on resale sites to see how much particular shoes are selling for and price accordingly. Veteran reseller Jason Butler from My Money Chronicles relies on eBay when pricing shoes.
“I check the eBay sold section and see what the average sale was,” Butler says. “From there, I come up with a similar price.”
Creating a quality online listing also improves your chances of successfully reselling sneakers. Butler says to follow these four tips to create the best possible listings:
- Take good pictures
- Clean the shoes
- If there are stains or tears on the fabric, list that information in the listing
- Don't set your price too low
An easier way to invest in sneakers
There is another way to invest in sneakers without spending time buying and selling online. Otis is an alternative asset investment company that allows individuals to invest in cultural items like collectibles, art, and sneakers.1
Sneakers may seem out of place in the investing world, but Otis isn’t dealing with shoes you would find at your local sporting goods store. One of its current assets is the "Shattered Backboard" AJ1 worn by Michael Jordan during an exhibition game in Italy in 1985. During the game, Michael Jordan shattered the backboard while making a dunk. The shoes still have a piece of the backboard glass embedded into the sole. This particular pair of sneakers are the most expensive shoes ever sold on the public market.
How to invest on Otis
The Otis staff acquires assets, has them securitized with the U.S. Securities and Exchange Commission, and broken into shares. Securitizing is the process of turning an asset into a financial instrument to be bought and sold in financial markets. New assets are added each week. Otis members can buy shares of assets, and then they can sell shares to other members as well.
A daily clearing price is determined for the cost of the shares. This is a mutually agreed-upon price between a seller and buyer (in this case the asset’s owner and Otis). When an Otis member places a bid, they’ll enter the maximum price per share they are willing to pay and the number of shares. As long as this bid is at or above the clearing price, the purchase will be executed.
If the asset is liquidated, Otis keeps 10% of the profits, and the remainder is distributed to shareholders accordingly. Otis also charges an upfront sourcing fee between 0-10% that is included in your initial purchase of shares. Currently, Otis doesn’t charge management or transaction fees for its investing services.
To open an Otis account, you must be 18 years of age or older and a U.S. citizen or resident. You’ll also need a bank account to transfer money to your Otis cash account. Otis is open to both accredited and non-accredited investors.
Is it worth investing in sneakers?
Reselling sneakers requires hard work and success isn’t guaranteed. If you’re passionate about sneakers, it might be a worthwhile investment provided you work hard and learn the business. In this way, investing in sneakers is no different than investing in any other asset. And just like investing in the stock market, investing in sneakers is inherently risky and past performance cannot be considered a guarantee of future success.
How much money can you make reselling shoes?
The amount of money investors make by reselling sneakers varies greatly. Some individuals resell shoes just to supplement their income, whereas others have created businesses that become their full-time job. According to StockX, sneakers sell on its site at an average of 1.48 times their retail price. Whether this turns you a profit would depend on what you paid for the shoes as well as your business operating costs.
How do you know if sneakers are fake?
There are several ways to check if sneakers are fake. You should always closely examine the packaging, box tag, and tags inside the shoes to verify they are legit. There’s also often a verification process when you buy or sell sneakers through a secondary sneaker resale website. The process typically involves the seller shipping the shoes to the resale marketplace for a physical inspection. This can add several days to the shipping process, but it also ensures you aren’t buying fake sneakers.
Sneaker resale could be a good fit for some people who are looking to learn how to invest money as a side hustle or full-time venture, but it’s not without risks. Do your homework to source the best shoes to flip. And don’t underestimate the amount of time and energy required to become a successful sneaker reseller. Investing through Otis may be a smarter option if you’re not ready to commit the time and resources to buy and sell sneakers yourself.