Flipping sneakers, which is also known as sneaker reselling, is the process by which a person, typically a sneaker enthusiast, acquires a sought-after sneaker and resells it to people who want it and are prepared to pay more than retail price.
Flipping sneakers for profit is considered a business in most parts of the United States hence it is advisable you handle it as a business by going through the proper channel of establishing a business. This will help you stay on the side of the law or else you might face penalties.
How Much Can You Make Flipping Sneakers?
The amount you are expected to make flipping sneakers usually depends on some factors such as the size of the business, the type and brand of sneakers you are flipping, and of course your business network or your market size. But from available data, those who are involved in flipping sneakers can make as high as $225,000 per year and $18,750 per month and as low as $33,000 per year and $2,750 per month.
What is the Profit Margin on a Sneaker?
The profit margin on a sneaker to a large extent will depend on the brand of the sneakers. Popular sneaker brands usually have high-profit margins when compared to not-too-popular sneaker brands. In contrast to high-end designer sneakers seen in boutique stores, which are sometimes overvalued by as much as 500 percent, typical sneakers or sports shoes have a markup of 50 to 100 percent.
For example, a brand like Adidas or Nike sells a $100 sneaker to their partners for $50 because the industry average for retailer margins is around 50 percent.
Best Places to Buy Sneakers and Where to Sell
- eBay (Website: ebay.com)
- StockX (Website: stockx.com)
- Flight Club (Website: flightclub.com)
- Stadium Goods (Website: stadiumgoods.com)
- Sole Supremacy (Website: solesupremacy.com)
- Project Blitz (Website: projectblitz.com)
- Urban Necessities (Website: urbannecessities.com)
- Sole Stage (Website: solestage.com)
- KLEKT (Website: klekt.com)
- Sole Collector App
- GOAT (Website: goat.com)
- Index (Website: indexpdx.com)
- RIF (Website: rif.la)
- Grailed
- Alias
- Independent consignment stores
Steps to Flip Sneakers for Profit
Step One: Conduct Your Feasibility Studies and Market Survey
If you plan to start flipping sneakers for profit, it is important to have a full grasp of what you are about to get involved in. This is because this business may not thrive in every location. As a matter of fact, the business may likely struggle if you locate it in a city were people have high purchasing power.
For this reason, conducting market research before investing your money in flipping sneakers is very important. When you carry out thorough market research, you will be able to locate cities and towns where your sneaker-flipping business will thrive.
Step Two: Choose a Catchy Name for Your Business
Having conducted your market survey and feasibility studies, the next step is to choose a catchy name for your business. You should be creative when selecting a name for your company because the name you select will significantly influence how others perceive your business.
In order to be properly led while selecting your business name, it won’t cost you anything to go online and look up the names of the top brands in the industry.
Step Three: Write a Workable Business Plan
No matter what kind of business you want to start or how small it will be, writing a solid business plan first is a smart move. The blueprint for running a business successfully is a functional business plan; having one in place will help you avoid trial and error.
You’ll be able to operate your company with purpose and precision; you’ll know what to do when obstacles arise and how to handle development and expansion. So, if you want to start flipping sneakers for profit, you are required to create a thorough business plan that, when put to the test, can stand up to reality.
To do this, you must use data from the industry that is relevant to the location where you plan to locate your company, including facts, numbers, and other metrics. The techniques you want to use to run your business should be outlined in your business plan.
When putting numbers on income and profits in a business plan, the general rule is to be as realistic as possible and never over-project.
Step Four: Register Your Business Name
The only action that can bring you closer to realizing your ambition of launching your sneaker-flipping business in the United States is to register your business name. Before this, you need to have conducted company name research to make sure you aren’t choosing a name that has already been registered.
You may choose to register an assumed or fictitious business name (trade name). This is because a good number of small businesses in the United States don’t operate under the names of their owners.
Depending on where you are doing business and how your sneaker-flipping business is structured, this alternative business name may be referred to as an assumed name, a fictitious name, a trade name, or a DBA (for “doing business as”).
Step Five: Apply and Obtain the Needed Business License and Permits
Some states in the U.S do not issue a state business license, however, most city/town offices issue business licenses. For example, in Arizona, one very important state license that a business that is involved in flipping or reselling is the Transaction Privilege Tax (TPT) license.
The TPT license is similar to what in other states would be called a sales tax license. Apart from a TPT license, some businesses may be required to obtain what is broadly known as regulatory licenses and permits. These are licenses and permits for certain regulated business activities.
Regulatory licenses and permits might cover, for example, activities affecting the environment or health and safety. Some necessary licenses and permissions, aside from those issued by the state, are also issued locally. Depending on the city, municipality, or county in question, the requirements change. Visit the city government office to ask questions if you are unsure about the kind of business license to apply for.
Step Six: Purchase the Needed Business Insurance
Most states in the United States of America mandate that you cannot conduct business without having some sort of insurance. In order to get the most appropriate insurance coverage for your sneaker-flipping business, it is crucial to speak with an insurance broker.
Step Seven: Lease or Rent a Warehouse or Store Facility
Another important step to follow when establishing a sneaker-flipping business in the United States is to choose an ideal location for your warehouse or storage facility. When it comes to renting a warehouse in the United States, you would need your business license and permit before any landlord or realtor will sign any leasing agreement with your business.
Step Eight: Source for Your Supply
The whole essence of your being in business in the first place is to flip or resell sneakers, hence a very important step to take is to source used sneakers to flip. You can contact celebrities, influential people, and top sneaker shops to source for used sneakers that are still in pretty good shape
Please note that the average sneaker flipper will use bots, which are computer programs, to attempt to acquire footwear. Virtually everything is automated, and bots try to quickly check out several pairs from websites before they sell out.
Step Nine: Promote and Market Your Sneaker Flipping Business
Once you are able to stock up your warehouse with different brands of used sneakers, then the next step is to start promoting and marketing your sneakers. Aside from flipping sneakers from your brick-and-mortar store, most people that are engaged in flipping sneakers for profit usually leverage online platforms.
Available data shows that the best websites and apps to resell sneakers are eBay, StockX, and Alias. From these websites and apps, you will be able to flip your sneakers and make reasonable profits. Please note that this will depend on the sneaker brand you want to flip, and knowing the right website or app to flip your sneakers is very important.
Step Ten: Work on Your Delivery Channel
The fact that most of your customers are going to buy from online platforms means that they will require that you deliver the sneakers to them once the payment has been made. You can make use of reliable delivery companies in and around your city.
Please note that if you want to start flipping sneakers online, then you must make sure you provide as many payment options as possible to your customers. With that, it will be easy for you to accommodate different customers with different payment preferences.