118. How I Make $650K/Year Reselling Sneakers!

0:00Thousands of people attempt to resell sneakers online with little to no success. But Nicholas Malanga cracked the code and now makes$650 ,000 monthly reselling Nike sneakers. Nick dreamt of becoming a professional basketball player and even became one of the top players in the state of Illinois. But his dreams of becoming a pro athlete crumbled when he tore his meniscus. With no backup plan and a pregnant wife, things were looking dire for Nick. And that's when he discovered he could start reselling sneakers online. This is Alex Freeman, and you're listening to the Upflip Podcast, where we uncover how great businesses are built, how they run behind the scenes, and how you can replicate their success.

0:36Today, Nick shares how he went from offer up and Facebook groups to making a fortune selling on Amazon and Instagram, how to break into reselling, and what to do if you barely have money. Nick, welcome to the show. Thank you. Thank you. It's a pleasure to be here. So tell me about yourself and what it is that you built. Man, thank you for asking. So a little bit of background on me. So I played high level Division I basketball at University of North Florida. And unfortunately, during my senior year, I ended up tearing up my knee and it wasn't a good knee injury. I was out for three years during the prime of my career.

1:07So I get my master's in business. I come back home and I don't really know what to do. But I knew my brother was reselling sneakers and he was in medical school and he was able to pay his medical school with reselling sneaker money. So I know there was a lot of money in this industry. So I was like, okay, my parents want me to work for a business firm, work for JP Morgan, but I don't want to go that route. I want to have a little bit more freedom and kind of own a business. So I start selling sneakers. I just was very intentional, very determined, very consistent. All the mindset that I had in basketball, I put it into sneakers and I built a, you know, a pretty good sneaker business and my family is, you know, living pretty good.

1:44I love it. I love it. First go Ospreys. I think I... Yeah, Ospreys. There we go. You know, there we go. Nailed it. Big college basketball guy over here. So tell me about the shoe flipping business. When you first got into it, where did you start selling the shoes and how has that evolved as the business has grown? Yeah, that's a great question. The first thing that I did is, number one, I had a brother as almost a guide a little bit because he already had high level success. He started doing it back in 2012. So I couldn't really resell sneakers because I was busy trying to play college basketball, recruitment, all those different things.

2:15So I didn't have time. So when I started, I saw my brother, he was selling on eBay early on, selling on OfferUp and all those different marketplaces. But I started on OfferUp. And what OfferUp is, is basically people that want to sell sneakers around town. They put their sneakers up in a price. But I didn't have money to buy these sneakers. These sneakers are expensive. So I started with used sneakers, sneakers that people already used. So I would message a whole bunch of people, lowball them. What that means is that I'm trying to buy it for a really low price. Like they're asking for 50. I'm going to say 20.

2:45So negotiate a little bit. Buy those sneakers that are used. Clean them. Clean them really well. and then I'll put them back on eBay or OfferUp or Facebook Marketplace. So that's how I started. But as I gained momentum in that, I was able to have enough money to start buying new sneakers, sneakers that are brand new from different stores like, you know, Finish Line, you know, JD Sports, Foot Locker, all those, you know, Nike retailers. So now I started to get brand new shoes and I started selling them on eBay. eBay was a great platform for me for a year. And, you know, there's a point where eBay didn't take fees out because they're really trying to push their sneaker reselling industry with their platform.

3:20But during that time, COVID hit as well. So the world stopped. The world stopped during COVID. And to be honest with you, my sneaker reselling business wasn't really doing too well. I had a son at the time. I have a four-year-old son, Moses. He was born. He was probably one. My wife, she was finishing up her PhD. She was at our postdoc. So it was a very tough time during COVID. And I didn't really know if I could resell sneakers full time or even do it consistently because there's pressure to pay the bills and, you know, raise a family. I'm cold outreaching. I'm trying to post these sneakers. And then the documentary, The Last Dance came on.

3:55Do you remember that documentary, Alex? Oh, yeah. Oh, yeah. So The Last Dance came on. So now everybody, they're in their house, they're watching this documentary because the world shut down. And then everybody was in a craze for Air Jordans. But all the work that I did before, cold outreach, continuous, my products, you know, all those different things. Once I had the opportunity with The Last Dance, my phone just started to buzz consistently, buzz, buzz, buzz, buzz, buzz. And a sneaker, the Jordan Fire Red came out, the Jordan Fire Red. And I was selling that sneaker. So I literally sold like a hundred of them the first episode of The Last Dance.

4:28So that was like, oh my God, man, that was just a testament of just being consistent when you don't see the results. Because a lot of times with entrepreneurship, you don't see results right away. And a lot of times people give up because they don't see the results, but you just got to stay consistent. And I love that book, Slide Edge. And after that, I kind of built through there, but we could talk about that later on in the podcast. Yeah, absolutely. I want to go into that starting out as flipping the used sneakers, because that seems, and correct me if I'm wrong, that seems like if someone maybe doesn't have a ton of cash, that's probably the best entry point into this business.

5:01Can you talk about that process of finding used sneakers and how somebody might start learning how to flip used sneakers like you were. Yes. So with used sneakers, the best thing about it, like you said, Alex, is that you don't need a bunch of capital. You don't need thousands of dollars to buy these used sneakers. So the biggest thing that you have to do is that you got to go product hunting. And what product hunting means is that you have to get platforms like OfferUp, you know, Facebook Marketplace. I recommend those two because that is a local marketplace. So you don't have to go on eBay. They're going to ship them all the way to you.

5:31Like it's a local marketplace and you can negotiate more because you need to negotiate. And that's a skill set that you need to have if you want to sell you sneakers and make profit and have good margins because you don't want us getting you sneakers and then make no money. It's pointless. So you go on those platforms, you search up Air Jordans, Air Jordan 1, Air Jordan 4, Nike Dunk, whatever sneaker that you really want to, you know, kind of focus on because my niche is Nikes and Air Jordans. That's my niche right there. So those are what I was focusing on. So I would search up, I would look for a pair that is in decent condition, not completely like it's over with terrible condition, decent condition where I can actually clean it up and it can look fairly new.

6:07So I would look hours, I would be on these platforms offer up in Facebook marketplace and messaging hundreds and hundreds of people. Again, there has to be work involved. So you got to message and you got to be on top of when they reply back. So once they reply back, I'm going to counter offer or I'm going to try to negotiate to get it cheaper because it's used. And I'm going to say, Hey, it's a used sneaker. Can I get it for 50 bucks? Even though it's a, you know, he's asking for$90. Once I'm able to negotiate, I would meet up, you know, meet up with the person, you know, make sure they're authentic take.

6:35And we could talk about legit checking because with sneakers, now it's huge with the fake market where you can get inauthentic sneakers. So there's a couple tests that you can do to kind of check if they're authentic. But I would get the sneakers, come back home. I would use a toothbrush, soap and clean them. Take my time and clean them. Make sure they look new. If there's creases, I would take a towel and use an iron, wet it a little bit and clean out and kind of take out the creases. So you got to spend time doing it. However, when you're starting off, you're just trying to make profit and kind of grow the cashflow you have.

7:04Therefore you can reinvest in your business. So that's kind of the process with you sneakers. It takes more time because you have to get the sneaker. You got to be able to kind of clean it up and then you've got to relist it. And where I relisted them was back on OfferUp, back on Facebook Marketplace and also on eBay because eBay is a much bigger platform where there's a lot of people looking for sneakers. So that's one of the biggest things. And taking the pictures are very huge. Taking nice pictures because nobody wants sneakers that are blurry and not in a good environment where there's a clear background and all those things.

7:33Let's talk about kind of those profit margins. Let's start with the used sneakers, like what kind of profit margin you were starting to see kind of on those used sneakers as you were getting started, and then maybe use that to transition us into what that kind of looks like now, now that you're kind of in the new sneaker game. Yeah. So the profit margins, I was still like, I understood that I needed to do at least 20%. So if I bought a sneaker for 50, I'm going to have to have 20 % profit margin because I want to get enough profit so I can reinvest. So it was always 20%. And here's the thing about you sneakers.

8:03It's even more, you can even get more profit margin because you're getting them for so cheap. So if I get a sneaker for 50, I can easily sell it for a hundred. So the minimum was 20%, but a lot of times my profit margins would be basically, you know, basically a hundred percent, 50 and I'm making 50 on it. So that was great because it allowed me to start creating capital where I can reinvest. So those are the margins that I'll usually see anywhere between, that 20 % and 50%. Some of them I would basically do 100 % profit margins. So that was one of the biggest things. But once I started to create more capital, I kind of graduated into new sneakers.

8:34And when I got into new sneakers, it's a lot more money you have to have because the average Jordan sneakers, 200 bucks. You purchase five of them, that's a thousand dollars. So that was one of the biggest things that I had to realize like, okay, if I'm going to buy these new sneakers, I got to know which ones that are going to sell because you do not want to have dead inventory and your money is tied up. So the first thing that I did was that I would see, like, I would just browse social media and see what are the sneakers that everybody is talking about. So I would go on YouTube, I would go on Instagram, I would go on Facebook, and I would look at the release calendar for Jordan brand and see, like, what is the most likes?

9:08What are people liking the most? What are people, you know, kind of hyped about? And those would be the sneakers I would focus on because those are sneakers where I'll be able to make money. And on top of that, there was a platform that just came out called StockX. Have you ever heard of StockX before, Alex? Yeah, yeah, I have. Yeah. So StockX started to, you know, kind of elevate as a platform. eBay was always the creme de la creme throughout like 2010 to like 2016, but StockX was now up and coming. And it was kind of like the stock market for sneakers where people can see, okay, this is how much the sneaker's actually going for.

9:40This is where, you know, the price of the resale. So that was a great tool. So those were the sneakers I was focusing on where I was going to source from places like Foot Locker, Finish Line, Nike.com, Sneakers App, all those different things. Therefore, it'll be easy sell and I can kind of liquidate them very fast. So in regarding profit margins with new sneakers, my minimum is always 20%. I try to get at least 20 % profit margin because it is worthwhile if you're 20%, 20 % profit margin. And again, it can always go up based off the sneaker, but the sneakers that I would designate and realize like, okay, these are the ones I need.

10:14Those are going to be the ones that I'm going to make 20 % at minimum 20 % profit margin. Now, I know the company started out from your house. Are you still running it from your house? Yes, I'm still running it from my house, man. You know, I got a lot of systems in play. I moved. I got a lot bigger house now. So there's a lot more space for the sneakers. But yes, it's still from my house. Yeah. How are you managing that inventory? Like talk to us about like the square footage are these sneakers taken up? I have a like a sneaker office in the basement and the basement has to be, you know, I'm not good with square footage numbers, has to be, man, maybe 800 to a thousand square feet, probably, you know, the basement.

10:51And, you know, there's one half of the basement where it's all inventory and I have racks, racks filled with inventory. And then I will label them because here's the thing about business. If you don't have systems in play, is going to be very hard to scale and it's going to be very hard to grow if there's no systems. So on these racks, I'm going to have an organized Jordan 1s, Jordan 4s, Jordan 3s. And there's even labels on, okay, these are the ones that I'm selling really fast. So now I can have them organized. Therefore, when they sell, I can get them right out. I also have, again, tape cutter, no tape, scissors to cut the sneakers.

11:25I have thousands of shipping boxes where I can hurry up and get the sneaker out to the customer because the best thing you can do for a customer is to get their sneakers out to them very fast. Therefore, they can be satisfied and say really good things about you. And that's how I was able to build my brand, Alex, is that I got so many great reviews based off my services and the sneakers I was selling them. Therefore, you know, people were comfortable buying from me. So, you know, with the setup that I have now, again, very organized labels have all the boxes here, have all the tape, have all the laser printers and thermal printers where when something sells, they're getting out really fast, you know, giving them, you know, a good service with them buying sneakers with me.

12:01As we step into our business section, we want to take a moment to thank our listeners for your ratings and reviews. We're constantly growing and working to improve the show and your reviews mean a lot. Matt PR in his review said a fantastic podcast for SMEs or those looking to start an SME. So much informative content on each episode. I enjoy listening to Alex Freeman, who is a great host and interviewer, plus a wide variety of businesses being interviewed. Matt, thank you so much for leaving those kind words and taking the time to leave us a review. We really, really appreciate your feedback.

12:31How saturated is the sneaker market right now? Like how much room is there for more resellers? So there's always room. There's always room. I believe Fox Business did a article, I think a few months back, and they talked about how the reselling business is going to about 30 billion by 2030. So it's continuing to grow. Sneakers are never gonna go anywhere. However, for the newest person, they have to realize it's going to be a journey. It's not going to be, hey, I'm going to start sneaker reselling. I'm going to create thousands of dollars a day, especially since, you know, there are so many other people reselling already.

13:04So it's going to be a journey, but there's always room, always room for more people that want to sneaker resell. It just takes consistency. Are there perhaps other business ideas around the space that somebody could consider getting into that maybe they're really interested in sneakers, but maybe reselling isn't exactly the right fit for them? Yes, that's a great question. So one of the most popular, you know, kind of industries with not even a sneaker resale, it's sneaker information. Sneaker information is huge because there's a lot of people that don't want to resell sneakers, but they love sneakers in general.

13:34And there's a lot of communities, you know, a lot of communities. There is, you know, things like Discord. There's things like, you know, there's a lot of different places, but I know Discord is probably one of the most popular ones where there's sneakerhead communities where there's information on how to get the sneakers for personal wear. And that is a great business model because number one, the business model doesn't take a lot of capital. A Discord server doesn't cost, you know,$10 ,000,$20 ,000 like getting a good amount of inventory with sneakers. However, if you're knowledgeable enough on how to get sneakers and be valuable information, you can have a community of helping people get sneakers for them personally.

14:09So you're not selling them the sneaker, but you're giving them information. Therefore, they can get the sneakers that they want to wear. So there's a lot of different avenues you can go with sneaker if you don't want to resell. But I know the sneaker information industry is a big industry because there's a ton of sneaker heads out there. How important is brand recognition in the space? You've obviously done a really nice job of building your own brand up. But how important is that to scaling the business ultimately? It's very important. It's very important, Alex. And one of my biggest regrets when I started Sniper Kicks, I wish I would have did more brand recognition earlier and got on YouTube, got on Instagram, got on Facebook and started to build a brand.

14:47Because when you build a brand, Alex, people, you know, think they can connect with you. So it's not them just buying sneakers. I'm buying sneakers from somebody that I think I know from the camera through social media, through Instagram. Therefore, there's a connection there. Therefore, they want to buy from you because they feel like, man, this person is a person that I want to support. And that's why recognition was so, so, so important for me. And I wish I would have did it sooner. But I realized like how, you know, in the time we live in with social media and our smartphones and YouTube, everybody's on YouTube.

15:18That aspect is huge. Don't get me wrong. I know sneaker resellers that have no brand recognition that make a lot of money reselling sneakers. But in my opinion, if you're able to build a brand, the sky's the limit because you can continue to scale and continue to grow the brand and people will always want to do business with you. In building that out, both from a brand recognition perspective and actually just selling the sneakers, how much of a marketing spend are you making? What does the marketing budget look like for you as a successful sneaker reseller? With me, I have done a ton of organic content.

15:49Down the road, I do want to play with paid advertising, but with me, it's been completely organic. And for my marketing budget, it's basically me paying the editors, me paying the camera guy to film me if I'm going anywhere to kind of build that brand recognition. And it's around, I would say about 700 bucks a month for me and my budget for marketing. And that just goes to all the people that are going to create, you know, kind of the backend contents, different content that they feel like could be helpful. The editors and the videographer that's filming me. But all my stuff has been organic, you know, Alex, me using YouTube, that has been my most powerful tool.

16:21YouTube, everybody's on YouTube and me building the brand and showing people like how I get the sneakers, showing people that I resell sneakers and people knowing like, hey, if I want a secret, I can get it from Sniper Kicks. You know, YouTube, Instagram, Facebook has been huge for my success, but around 700 bucks, that's probably my marketing budget, you know, every single month. Just as a side note, it has a great YouTube channel. Thank you. Listeners, you can head over there and waste many hours learning about various sneakers because it is fascinating. It's all well done. And you're just very captivating on the channel.

16:51Thank you, Alex. Speaking of YouTube, this is going to bring us to our fan blitz questions, which come from our YouTube community. Listeners, you can head over to youtube.com slash upflip, post questions to future podcast guests. Nicholas, I've got five questions here for you. Are you ready? Yes, I'm ready to go. All right. First one here from Marcus Smith, 7669. Where do you source your shoes from? Great question, Marcus. Phenomenal question. So I source my sneakers from a couple places. So make sure you write this down, Marcus. Number one is Nike.com in the sneakers app. So what the sneakers app is, is a basically the platform for Nike to sell its rare or hype sneakers.

17:29So the sneakers app is where I source my sneaker. Number two is Nike Outlets. Nike Outlets is phenomenal, especially if you're a sneaker reseller, because they are discounted sneakers. So think about this from a business standpoint. If you're getting sneakers for a lower price, therefore you can sell it for a lower price and still make money. If you're buying it for a higher price, now you got to sell it for a higher price to make money. So Nike outlets are so, so, so good regarding making money being a sneaker reseller. Number three is Finish Line. I love Finish Line and now JD Sports. JD Sports is basically Finish Line, a little bit bigger version of Finish Line.

18:05JD Sports actually bought Finish Line. They are great because there are so many reward points. So they have a kind of like a algorithm with their system is that it's a pay to play model. So if you spend more money with Finish Line and JD Sports, you will win all the hype sneakers. So if you're a sneaker reseller and you're buying a lot of sneakers already, you're going to accumulate a lot of points and reward points. Therefore, you can get the hype sneakers and you can get it for a discounted rate because with your reward points, you can actually buy reward coupons, quote unquote, or you can get$20 off your purchase, $15 off your purchase.

18:37So now you're buying it for a lower price. And again, you're selling it for whatever resale prices. Now you're making more money. So I love Finish Line. I'm going to give you a retailer that a lot of people don't know, which is such a great retailer. So write this down. Snipes USA. S-N-I-P-E. Snipes with the S-U-S-A. In this retailer, a lot of times they have sneakers that are sold out on Nike Finish Line Foot Locker and they still have them at their store or still have them on their website. And Snipes is a place that I love to shop. It's a sneaker that came out three months ago and I can't find it anywhere.

19:09A lot of times Snipes might have it. So that's a low key retailer that I store sneakers. But at the end of the day, you know, once you start reselling sneakers, you'll understand all these different stores because there's tens and tens of stores, you know, around your area or online that you can shop and make some money on. How does shoe size matter in the resale environment? Yes, it plays a big factor. I'm going to go back a little bit. So back in 2017, 2016, the smaller size shoe was more popular because the Chinese market was really, really, really, really big in like certain Jordans, like Jordan 1s.

19:44So a lot of resellers would buy a whole bunch of shoes and then ship them to China. Therefore, those were the sneakers that went for a lot of money, anywhere from eight to like nine and a half. Now in today's world, the bigger sizes do really well, like the 13, the 12. The reasoning why is because they make less pairs because there's less people with those big size shoes that make less pairs. Therefore, people that have big feet like myself with a size 13 want them, but they're making less pairs. So there's more of a, you know, supplying demand. There's a lot of demand, but the supply isn't there.

20:13Therefore they sell more. So in today's case, I would say the big size sneakers, the 11 and a half, the 12, the 13, those are going to be your money sizes for most like Air Jordans and Nikes. But back in the day, Alex, it was a small feat. It was the eight, the eight and a half, the nine, the nine and a half. But you know, you kind of fast forward eight years. Now it's the big sizes, 12 and 13, 11 and a half. If you could sell your product to one celebrity, who would it be? LeBron James. Gotta be LeBron James or Michael Jordan. I gotta give you two or Michael Jordan. He has everything already.

20:43Michael Jordan has everything already. So he'll be like, man, I could just call it my people. But probably LeBron James. Can you imagine selling a pair of Jordans to Jordan? That'd be incredible. That's going to do it for those fan blitz questions. Just a few more questions for me here. I want to talk about that process for you of scaling from like a side hustle level of income to a business doing, you know, 650K a month. Yeah. So one of the biggest things, you know, regarding kind of scaling business out is that you got to start small. You know, like you said, it's going to be, you know, a side income and you're going to have to kind of figure yourself out.

21:16That's the beautiful thing about it. You're going to have to figure everything out. However, when you want to scale, number one, you have to reinvest back in your business. Because what I see the biggest mistakes with a lot of people that resell sneakers, they start making some money and they start buying sneakers for themselves. They start going to fancy dinners. They start buying new things. But when you're first starting, you've got to reinvest all of that money that you're getting back into the business. You've got to get more inventory. You've got to be able to make your systems better. That's one of the biggest mistakes that I see.