How to Start a Business Selling Sneakers

Introduction

Starting a sneaker reseller business can be lucrative, but it requires careful planning and consideration.

There are numerous examples of successful sneaker resellers to learn from.

Expect to research market trends, build supplier relationships, and develop marketing strategies. Considering factors such as pricing, authentication, and inventory management is crucial.

Using resources like online forums, industry publications, and social media groups for valuable information.

As we dive into the steps, bookmark this page for reference and kindly share it if you find it helpful!

Let’s get started.

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Steps to Starting a Sneaker Reseller Business

1. Gaining An Overview

a.) Is Starting a Business the Right Step for You?

Starting a sneaker reseller business can be exciting, giving you the freedom to be in charge and potentially earn a good income.

However, it’s important to consider if this type of business suits you and your goals. Before diving in, take a look at my article below.

It will help you identify important factors and make an informed decision before proceeding with your venture.

See Considerations Before You Start Your Business to identify key points for a new business owner.

b.) A Quick Overview of Owning a Sneaker Reseller Business

Running a sneaker reseller business involves various responsibilities and challenges. As a sneaker reseller, you’ll be responsible for sourcing and acquiring popular sneakers, managing inventory, setting prices, and marketing your products effectively.

Building relationships with suppliers and customers is crucial.

However, there are challenges too. Competition can be fierce, with many others vying for limited stock.

Staying updated on sneaker trends and authentication methods is essential to ensure customer satisfaction.

Balancing supply and demand can be tricky, and managing inventory can be time-consuming. It’s also important to navigate pricing strategies and handle customer inquiries and returns.

c.) Pros and Cons

Pros of Running a Sneaker Reseller Business:

1. Potential for high profits through buying and selling sought-after sneakers.
2. Flexibility in managing your own schedule and being your own boss.
3. Opportunity to turn your passion for sneakers into a profitable venture.
4. Possibility of building a strong network and connections within the sneaker industry.
5. Constantly being aware of the latest sneaker trends and releases.

Cons of Running a Sneaker Reseller Business:

1. Intense competition with other resellers for limited stock.
2. Need for thorough knowledge of sneaker authenticity to avoid scams or fake products.
3. Constantly monitoring market trends and adjusting prices accordingly.
4. Dealing with customer inquiries, returns, and potential disputes.
5. Potential challenges in securing reliable and consistent supply sources.

2. Research

Sneaker Reseller Business Research

Before diving into the world of sneaker reselling, it’s crucial to gather valuable information that can guide your decisions. Quality research is essential to ensure you make the right choice for your business.

One effective way to gain insights is connecting with experienced individuals already in the sneaker reselling industry. They can provide trustworthy information based on their expertise and years of experience. Spending time with them can be invaluable, offering you the chance to learn from their knowledge.

I’ve written an article with helpful ideas to help you connect with the right people and approach them.
See An Inside Look Into the Business You Want To Start for all the details.

Target Audience

Understanding your target market is crucial for a successful sneaker reseller business. You can tailor your marketing efforts and enhance sales by identifying who might be interested in your offerings. Here are some potential customers for a sneaker reseller business:

• Sneaker enthusiasts and collectors
• Fashion-conscious individuals seeking trendy footwear
• Athletes and sports enthusiasts
• Streetwear and urban fashion enthusiasts
• Resellers and entrepreneurs in the sneaker industry

To improve advertising and sales, it’s essential to truly understand your customers’ needs, preferences, and purchasing behaviors.

For more insights on understanding your target market, check out my article How To Understand Your Target Market.

3. Looking at Financials:

Starting a sneaker reseller business requires careful consideration of startup costs, monthly expenses, and potential revenues.

Here’s an overview:

Startup Costs:

• Accurately estimate costs to ensure a smooth launch.
• List everything you need and research pricing.
• Consider factors like the size of your operation, hiring employees, and location.
• Choose between purchasing new or used equipment.

For more detailed information, refer to my article on Estimating Startup Costs.

Sales and Profit:

• Your sales depend on product popularity and effective marketing.
• Aim for sufficient profit per sale to cover expenses and generate income.
• Ensure enough sales to cover monthly costs and personal living expenses.

These lists provide starting points for your research. Understanding these aspects will help you plan your business effectively.

For more, see Factors Affecting Business Profit

Sample Lists

SAMPLE Estimated Costs for a New Sneaker Reseller Business in the USA:

1. Inventory purchases: $15,000
2. Storage and shelving units: $1,000
3. Packaging materials: $500
4. Shipping supplies: $300
5. Computer and software: $1,500
6. Website development and maintenance: $1,000
7. Marketing and advertising: $2,000
8. Legal and licensing fees: $500
9. Initial branding and logo design: $800
10. Miscellaneous expenses: $500 Grand Total: $22,700

SAMPLE Estimated Monthly Expenses for a Sneaker Reseller Business in the USA:

1. Rent or mortgage for business space: $1,500
2. Utilities (electricity, water, internet): $300
3. Packaging and shipping costs: $500
4. Marketing and advertising expenses: $1,000
5. Insurance: $200
6. Accounting and bookkeeping services: $300
7. Website hosting and maintenance: $100
8. Office supplies and equipment: $200
9. Membership fees (industry associations, online platforms): $150
10. Miscellaneous expenses: $250 Grand Total: $4,500

SAMPLE Revenue and Profit Projection for a Sneaker Reseller Business in the USA:

1. Average selling price per pair of sneakers: $150
2. Monthly sales volume: 100 pairs
3. Total monthly revenue: $15,000
4. Monthly expenses (from the estimated monthly expenses list): $4,500
5. Monthly profit: $10,500

For More, See Estimating Profitability and Revenue

Again, please note that these figures are samples, and actual costs, expenses, and revenue may vary based on different factors. It’s crucial to conduct detailed research and analysis specific to your business to create accurate projections.

4. Choosing The Right Business Location

Choosing the right location for your sneaker reseller business is crucial for success.

Here’s an adapted overview:

Selecting a Suitable Location:

• Opt for a location where there is demand for the sneakers you offer.
• Avoid areas with excessive competition, as it may hinder your sales.
• Aim for a location with a balanced mix of demand and competition.

Consider Affordability:

• Ensure that the chosen location is within your budget.
• Operating in a highly populated area may provide more exposure, but assess if the added expense aligns with profitability.
• Conversely, a cheap location might seem tempting, but confirm if it will have enough demand to sustain your business.

Research and Confirm:

• Choosing the right location is pivotal for success.
• Conduct thorough research to ensure you are making an informed decision.

Careful consideration of location factors will help maximize the potential for success in your sneaker reseller business.

For more about business locations, see Choosing The Best Location for Your Business.

5. Choose a Business Name

6. Register Your Company

See, How to Register your Business for more.

7. Create Your Corporate ID

A corporate ID, also known as a brand identity, is a design that represents your sneaker reseller business. It plays a vital role because you want to make a positive first impression on your customers. Having a consistent and professional design helps to impress both new and existing customers.

It reflects your brand’s personality, values, and the quality of your products and services. Investing time and effort in creating a strong and appealing corporate ID is crucial for establishing a distinctive and memorable brand image in the competitive sneaker reselling industry.

A Corporate ID consists of various components such as your logo, business cards, website, stationary, business sign, promotional items, etc.

See A Complete Introduction to Corporate Identity Packages for more.

8. Writing a Business Plan

A business plan is a crucial document for your sneaker reseller business. It serves multiple purposes, such as securing funding and attracting potential investors. Moreover, it acts as a roadmap to guide you during the startup phase and when your business is fully operational.

Creating a business plan requires time and effort as it involves envisioning your business’s future. Expressing the details necessitates careful thought and consideration.

The hard work is worthwhile because once your business plan is complete, you will clearly understand the necessary steps to start and operate your business successfully.

It’s important to note that your business plan can be flexible and subject to optimization as you gain experience. Periodically reviewing the document and making necessary adjustments is advisable. It may be necessary to modify your operations based on the insights gained during the review process.

A well-crafted and regularly updated business plan will help you stay focused, make informed decisions, and adapt your strategies throughout your sneaker reseller journey.

Business Plan Outline: Sample Sneaker Reseller Business

1. Executive Summary:

• Introduction to the business, including the mission statement and goals.
• Overview of the sneaker reseller industry and target market.
• Summary of key strategies and competitive advantages.

2. Company Description:

• Detailed information about the sneaker reseller business, legal structure, and ownership.
• Explanation of the business’s vision, values, and unique selling proposition.
• The product offerings include popular sneaker brands and target customer segments.

3. Market Analysis:

• Analysis of the sneaker reseller market, including trends, growth potential, and competition.
• Identification of the target market, including demographics, preferences, and buying behavior.
• Competitive analysis, highlighting key competitors, their strengths, and their weaknesses.

4. Organization and Management:

• Overview of the organizational structure, roles, and responsibilities.
• Profiles of key management team members and their expertise.
• Explanation of the hiring and training plans for additional staff.

5. Product Line and Sales Strategy:

• Description of the sneaker product line, including sourcing and procurement strategies.
• Pricing strategies, taking into account market dynamics and competition.
• Marketing and sales strategies, including online platforms, social media, and partnerships.

6. Operations and Logistics:

• Explanation of the operational processes, including inventory management and fulfillment.
• Discussion of partnerships with suppliers, distributors, and shipping providers.
• Description of the IT systems, software, and tools utilized for smooth operations.

7. Financial Projections:

• Detailed financial projections, including sales forecasts, expenses, and profit margins.
• Breakdown of startup costs, such as inventory, equipment, marketing, and legal fees.
• Cash flow projections, balance sheet, and income statement for the first three years.

8. Risk Management:

• Identification of potential risks and challenges, such as supply chain disruptions or market fluctuations.
• Strategies for mitigating risks, such as diversifying suppliers and maintaining contingency plans.
• Assessment of legal and regulatory compliance to ensure smooth operations.

9. Conclusion:

• Recap of the business plan’s key points and objectives.
• Statement of commitment to executing the strategies outlined.
• Request for funding, if applicable, and contact information for further discussion.

Please note that this is a sample business plan and should be customized based on your specific business goals, market conditions, and financial projections. It’s important to conduct thorough research and analysis to create a comprehensive and tailored business plan for your sneaker reseller business.

For information on creating your business plan, see,  How to Write a Business Plan.

9. Set up Your Banking

When starting a sneaker reseller business, selecting a local bank that specializes in serving business owners is beneficial.

Opening a Business account allows you to separate your business expenses from personal spending. This separation makes it simpler to keep track of your business expenses and provides evidence in case of a tax audit.

It’s advisable to establish a professional relationship with your banker. Having a good rapport can be advantageous, especially if you need funding. Your banker can offer assistance, and guidance, and expedite loan processes when required.

Consider applying for a merchant account to accept credit and debit card payments. Building a strong relationship with your banker can streamline this process and ensure smooth customer transactions.

Remember, choosing a bank that understands the needs of businesses like yours can provide valuable financial services, support, and guidance throughout your sneaker reseller journey.

For more, see, How to Open a Business Bank Account. You may also want to look at, What Is a Merchant Account and How to Get One.

10. Getting the Funds for Your Operation

Getting funding for your sneaker reseller business is an important step to starting and operating your venture.

Here’s an overview:

Securing Funds:

• Explore funding options available to you, such as traditional lenders, private loans, investors, or selling any assets you may have.
• Consider using collateral, such as personal assets, to secure a loan or line of credit.

Meeting with a Loan Officer:

• Schedule a meeting with a bank or financial institution loan officer to discuss your funding needs.
• Prepare a well-documented business plan to showcase your vision, market analysis, and financial projections.
• Be prepared to provide details about your personal financial history and credit score.
• Demonstrate your understanding of the sneaker reselling industry, market trends, and competitive landscape.
• Show your willingness to invest your capital and repay the loan.

Sample List of Documents Needed for a Business Loan Application:

• Business plan, including executive summary, market analysis, and financial projections.
• Personal identification documents, such as driver’s license or passport.
• Personal and business tax returns for the previous years.
• Bank statements for personal and business accounts.
• Financial statements, including balance sheets and income statements.
• Proof of collateral, if applicable.
• Business licenses and permits.
• References from suppliers or potential partners.

Remember to tailor your approach and documentation based on the specific requirements of the lender and the nature of your sneaker reseller business. Being well-prepared and organized can increase your chances of securing the necessary funding to launch and grow your business successfully.

See, Getting a Small Business Loan for more.

11. Software Setup

Software Considerations for a Sneaker Reseller Business:

When selecting the software for your sneaker reseller business, conducting thorough research and making informed decisions is crucial. Here are some important points to consider:

1. Implementation: Starting with the right software from the beginning is easier than switching to a new system after your data is already in another program.
2. Demo and Reviews: Look for software providers that offer a demo version. This allows you to test the software and see if it fits your needs. Additionally, check reviews and forums to learn from others’ experiences and gather insights.
3. Financial Tracking: Research software options for effectively tracking expenses and preparing financial documents for tax filing. Consulting with your bookkeeper or accountant can help you make the right choice for your accounting software.

12. Get The Right Business Insurance

When you have a sneaker reselling business, unexpected things can happen anytime. That’s why having the right insurance before anything goes wrong is important.

Insurance is there to protect different people and things. It can cover your customers, employees, yourself, anyone at your store, and even your property.

There is a type of insurance called professional liability insurance that can help you if someone sues you.

If you are running your business from your home, you should tell your home insurance agent about it. Otherwise, it could cancel your current home insurance policy.

To ensure you have enough coverage and understand everything about insurance, working with an experienced insurance broker is a good idea. They can help you choose the right insurance and guide you through the process.

Concerns when seeking insurance for a sneaker reseller business:

1. Liability Coverage: Ensure adequate coverage for customer injuries or product-related harm.
2. Property Coverage: Protect business property from theft, damage, or loss.
3. Product Liability: Coverage for injuries caused by defective products.
4. Business Interruption: Compensation for lost income during temporary closures.
5. Employee Coverage: Workers’ compensation for employee injuries or illnesses.
6. Cyber Liability: Coverage for data breaches or cyberattacks.
7. Professional Liability: Protection for advice or consulting services.
8. Home-Based Business: Verify coverage and potential home insurance policy implications.
9. Insurance Costs: Evaluate premiums, deductibles, and coverage limits.
10. Insurance Provider: Choose a reputable provider with expertise in business insurance.

Remember to consult an insurance professional for personalized guidance.

For more, see What to Know About Business Insurance.

13. Physical Setup

When running a sneaker reselling business, it’s important to set up your shop, warehouse, or customer area organized and visually appealing. This not only shows professionalism but also helps you work efficiently.

When displaying your products, make sure they are well-organized so that customers can easily find what they’re looking for. It’s a good idea to showcase the most popular items in prominent areas to increase sales.

Installing a business sign can help attract customers to your store. Additionally, make sure to have other necessary signs in different areas, like doors, waiting areas, and parking, to provide information and guidance.

Since you’ll be spending a lot of time in your office managing the business, it’s essential to keep it organized. A well-organized office boosts productivity. Make sure your office is fully equipped with all the necessary tools and supplies to effectively manage your business.

See, Here are Considerations for The Setup of Your Office, for tips and ideas to make your office work for you. Also, have a look at our article About Company Signs.

14. Creating a Website

Having a website for your sneaker reseller business offers several benefits. First, it provides an online presence, allowing customers to find and explore your products anytime, anywhere. This can expand your reach and attract more potential buyers.

A website also showcases your inventory, pricing, and special offers. It enhances customer convenience by enabling online purchases and easy communication. Moreover, a well-designed website builds credibility and trust, establishing your brand as reliable and professional in the sneaker reselling industry.

For more, see How to Build a Website for Your Business.

15. Create an External Support Team

In a sneaker reseller business, having a reliable support team is crucial. These professionals are experts you can turn to for advice and services, but they are not your employees. Instead, you hire them as needed, either through contracts or hourly rates.

You don’t have to assemble your entire team right from the start. Building relationships with trustworthy professionals takes time but is an ongoing process.

A strong team can be there for you when you need assistance. Your team may include an accountant to manage finances, a lawyer for legal matters, a financial advisor for money-related advice, a marketing specialist for promoting your business, technical advisors for technology support, and consultants with specialized knowledge.

For more, see, Building a Team of Professional Advisors for Your Business.

16. Hiring Employees

Running the business independently without hiring employees can be a good idea in the early stages. It helps save on payroll expenses, especially when starting out.

However, as your business grows, it may become difficult to handle all the tasks independently. At that point, hiring employees can greatly enhance productivity, provided you find the right people for the job.

The following are job positions or outsourced services you may want to consider as your sneaker reseller business grows and becomes successful:

• Store Manager or Operations Manager
• Sales Associates
• Inventory Manager
• Customer Service Representative
• Marketing Specialist
• E-commerce Manager
• Graphic Designer
• Social Media Manager
• Logistics Coordinator
• Bookkeeper or Accountant
• Legal Advisor or Lawyer
• IT Support or Technical Consultant
• Shipping and Fulfillment Service
• Website Developer or Designer

Remember, this list may vary depending on your sneaker reseller business’s specific needs and structure as it grows and evolves.

For more, see, How and When to Hire a New Employee.