How Flipping Really Died – From An Insider

I typically do a Should You Buy To Flip? every few days. It’s a good way to do projections on upcoming releases. Although I don’t do a lot of Retro resale anymore, this has been my way of staying involved in the world of sneaker resale. What’s happened lately is that my Should You Buy posts on Jordans has been pretty much the same and I don’t project that to change even with the drop of the 9 and 11 or Foamposite coming up. Resale is the foundation of this site and my business. I was doing this when I ran Sho-Shot in 2004. I was the only guy selling real shoes at Memphis’ 3rd Street Flea Market and I had full access to the Nike Clearance Store which was loaded from 2005-2011. The only people buying in bulk at that time was me, another guy and a little lady from Kentucky who would rent a U-Haul truck and visit the Memphis Clearance Store and spend about 25,000 dollars on kicks. The Nike Clearance Store was one of the biggest in the country. They eventually cut the store in half a few years ago. Before that though you could walk in and pick up DMPs and Cool Grey 11s 10-20 pair at a time. If you were in good with the employees they would even be cool enough to go to the back and pull shoes out for you, and then some people wanted to get a “tip”, but that’s going ahead, let me slow down. The Nike Employee Store is where the real story about the death of flipping starts.

About three years ago, I basically turned flipping over to everybody else and slowly changed the way I did business. It wasn’t so much that I changed, I had to change. There were so many new sellers that my access to shoes shifted. In the past at one point I could wake up on Saturday morning, pull a few thousand out of the bank. Drop off 1000 to each of the people I considered my teammates and let them use their access into the Nike Employee Store where they could buy 1000.00 dollars of shoes per day. Their limit was actually 750.00 but they could all get away with 1K. I paid my crew 10.00 for regular kicks, 20.00 dollars for Jordan retros and 30 dollars on shoes that I knew would pop big time.

I had a great projection system and I knew what was going to do well. If this isn’t clear, my crew had access to kicks at wholesale/50% off. They didn’t have to spend their own money, they simply picked up their 1K hit the store and they could buy 4 pair of 1 style. I had been doing this for years and my team was loyal. Then my team began to talk. Other people upped the ante. They were working with out of town buyers who were willing to spend more than me on every pair. They began offering the people who could get in 30 bucks for everything. It didn’t matter if it was going to pop or not.

Remember that at this time Retros were 150 -170 a pair or 75-85 plus tax. Shoes were reselling consistently for 250.00. Dropping someone off 30 was nothing, but I knew ten years ago, paying someone this much forces you to pay too much and you had to resell at a higher price. I also knew that prices of shoes were increasing. The LeBron had gone from a 130 dollar shoe up to a 180 and 200 dollar shoe. Paying people 30 on top of half off was a bad move for everyone because people became greedy.

Working with me my people could make an extra 200 per day for about 30 minutes of their time and they didn’t bring attention to themselves because they were buying every style, not just Retros. When the price went up, no one wanted to risk money on basketball kicks like LeBron, Kobe or KDs. Everyone only wanted Jordans. I could dive deeper in this story, but three years ago I went from being 1 of 5 guys doing this, to 1 of 50 guys showing up in front and shopping for people bulk buying outside of the city. People who could get in the store were all on someone’s payroll, but they were literally fighting each other for shoes. The natural progression was for the price for each person who could get in began to drop.

Since everyone was buying and bulk selling, the 30 went down to 20, and then down to 10, but so many people were beginning to flip that the people who could get in began snitching on each other. I had a crew of 7 people in 2009. By 2013 the entire team had gotten fired because of someone telling on them for selling to other people, or hiding shoes, or even worse, my crew began to sell spots on the Nike list or sell their passes. It wasn’t that I couldn’t compete with everyone else, I just realized how cutthroat everyone had become. I never put my team in jeopardy of losing their jobs. When they started trying to make 400 a day for their time by working with more than one person, they brought way too much attention to themselves. People who I thought I could teach the game too, began undercutting me to get more product.

In 2013 I told a group on Facebook that Memphis is about to fuck up the entire business. Everyone thought I was crazy. It wasn’t Memphis really, it was any city that had a Nike Employee Store, or Nike Store and could get launch day Retros, or get retros in at any time. Memphis was the major player in this and when a store is getting 500-1000  pair and those pairs are all getting out at below retail and Nike began to increase the price of the Retros to take advantage of the resale pricing, it was only a matter of time before the entire market had to adjust.

Let me slow down again. At 170 you could still turn a profit on a 250 dollar sale and that was the price where most resale shoes sold. That was the price a regular person without a connect, or discount had to buy and flip. Once Nike moved the price to 190 the resale of a shoe died because unless you had a Nike connect or a discount, you simply couldn’t get your money back right away. You had to wait to sell your pairs. Only guys with the money to wait could continue to sit on shoes, but around 2013-2014 Nike began doing restocks on new releases. This meant sitting on a shoe did very little to help. Tie this in to the Memphis crew still pumping thousands of shoes out into the resale market at below retail and you had shoes showing up on third party sites at 250 still. No one without a discount could survive in this market and shoes began to sit because once the discounted kicks disappeared at 250-275 other shoes had to be priced higher for it to make sense for someone looking to flip. It’s a lot easier for me to talk than write about it, but in 2014 the people who could get into the Nike Employee Store were only getting 10 dollars a pair because there were a lot of people buying for others, but no one wanted other Nike shoes. They only wanted retros. This began to drive the prices paid to people who could get in back up because people were afraid to lose their ability to get in so there were fewer guys so a person could move the price back up to 20-30 per pair.  Jordans were still kind of hot and people were still buying them out on the day of release. By 2015 Jordan began a series of releases that were not very good. Retro 5 Lows, Jordan 6 Lows, and other releases were not remotely hot, but the people buying took them at that Nike Employee cheaper price because you could get retail for a Seahawk 6 low, but buying began to slow down and was only competitive on extremely rare kicks which once again pulled people out of the woodworks to work for other people.

I was now working personally with mom and pop shops setting up their websites and helping to liquidate shoes. The writing was on the wall in 2015, Reselling Jordans was becoming very hit or miss. Everything I said about Memphis messing up the market was true. 2016 is the culmination of a 4 year period where Nike saw an opportunity to cut out the middle man by increasing prices. While most people see this as Nike not being hot or stumbling, the reality is the Seahawk 6, Black/Chrome 6 Low and Retro 5 Lows all were sent to the Nike Clearance Stores at 139.99. The shoes sold out of the Clearance stores immediately. ‘Sneakerheads’ laughed that Nike was falling off. The reality was that Nike was wholesaling the shoes to stores at around 95 dollars. By selling the shoes through their own stores, they wear turning a bigger profit.

Memphis was ground zero for the death of flipping, but honestly Nike building their DTC market was the real death. There are still people hitting the Employee Store. You see it in kicks on eBay that are selling at 250.00 for resale. Everyone is saying to themselves that guys aren’t making any money… the reality is Nike is still making wholesale and that 250 is on a shoe that probably came out of a NES or probably came from a small account who found a way to get their shoes online to a larger market, or came from a person with a discount. It’s only the regular person who has lost the ability to flip shoes. When I sit down to write a Should You Buy To Flip now… it’s harder because the shoe for a regular person to make a few dollars on is getting harder and harder to get.

I could go on and get more detailed, but that’s enough for right now. I don’t flip shoes like this in the picture anymore. My garage has a car in it again and weed killer and bikes. I run this site and try to give people a deeper look into the world of sneakers. For over ten years though I was the king, and no one knew my name. Now flippers are stunting on Instagram and showing up on SoleCollector and SneakerNews showing how many pair they were able to get. I remember feeling conflict about selling shoes 50 bucks above retail, now I see people busting heads for 1000 above retail. The game has changed, and I’m all for people getting paid, but I’m also glad we are finally back to a place where the customer is actually winning. I will still do Should You Buy To Flip? but from now on, I think it’s going to be a bit harder to figure out what shoes will pop. The market has officially changed. Now if Under Armour can get it together, resale will only exist for those looking for truly rare kicks and that’s how it should be.