April 9, 2020
Building a Sneaker Business with Soled Out Sneakers
In this interview, we chat with Finance Papi from Soled Out Sneakers and talk about his background in finance, what his job involves and his insight at life selling premium and niche sneakers.
1. You go by the name Finance Papi on Twitter and talk about all things related to financial matters. Tell us a bit about your background and what your current job involves?
I’ve had experience across a number of industries, including selling insurance, telecommunications, banking and tutoring. I studied Finance at university, and it’s quite the coincidence my dissertation was on utility tokens and ICOs in the gaming industry (seems a redundant topic now though) and it built on my passion for Finance.
Out of university, I was working in foreign exchange: my role was a private client dealer. Sounds fancy, but it was simply negotiating currency exchanges, mostly for big ticket purchases abroad (houses, cars etc.) and applying a discretionary spread to maximise profit, as that’s what I was targeted on.
After that role, I became a banking specialist where I had to be a subject matter expert on all matters related to personal banking. This included knowledge of ISAs, saving rate offerings, government schemes and banking processes in general. After 6 months, I was promoted to the position of Treasury Analyst working at Head Office. Undoubtedly, this was the greatest experience and learning curve of my life. My role was to execute mortgage hedging procedures so that I could provide financial analysis, modelling and reporting that would dictate interest rate swaps that we’d complete through the wholesale markets. I attended a specialist course on Interest Rate Risk in the Banking Book (IRRBB) which was intended specifically for individuals working in Treasury, so I’m comfortable with that concept.
Currently, I am a teacher for the Ministry of Education in the UAE and I am teaching a specialist course. The course is called Applied Streams, and I suppose the best way to explain it is that it is a combination of vocational teaching tied with business. In essence, I will be teaching students on how to pursue a number of vocations, whilst drawing on my own personal industry experiences, so that I can provide practical tips to help them enter their preferred industries and roles.
2. Can you tell us a bit about your sneaker business and how this came about?
I have always had an interest in sneakers and streetwear in general but could never really afford it. At first, it was simply about fashion, rather than a business pursuit. When I began, I would save up before every release and try and purchase multiple pairs to sell them for a profit, in order to be able to afford the personal pair.
The combined profits would often cover the price of a pair for personal use. A few months into it, I thought “why not turn this into a source of income?” (multiple streams of income Twitter, eat your heart out), and decided to invest more time and money into it.
Now I live in Dubai, and my best friend from university who has been an independent sneaker seller for years lives here, we have combined our passion and want to scale up and provide a professional service across our social media platforms. We are setting up our business Soled Out Sneakers AE, a service providing people with exclusive sneakers across the United Arab Emirates.
Our business operation is quite simply “buy for less, sell for more”, and because of how simple the business model is, it’s relatively easy to scale.
Much like stocks, certain pairs of shoes go up in value with time hence we analyse trends, stock numbers and hype around releases in order to predict the value of the sneaker, and decide whether investing in it will be profitable or not.
3. Who is your core target market and how did you identify them?
Our core market are the end users of the sneakers here in the United Arab Emirates; previously it was the UK, but I no longer live there. End users are the people that will keep the sneakers for personal use, and won’t/are unlikely to resell them.
A number of resellers tend to sell to other resellers who have a large customer base, but our goal is to directly sell to end users who will enjoy wearing the sneakers.
We pride ourselves on providing authentic sneakers that people can wear and get use out of. Credibility and trust are huge in the sneaker reselling game, and we identified this as a problem, especially both having been victims of fakes before.
We were able to identify this market through the number of social media platforms where we BTS (buy, trade, sell) as others had been victims of scams.
Continuing, it’s easy to miss out on sneakers in Facebook groups where posts get lost further down the page, or on Instagram where stories disappear, so we decided it’d make sense to provide all of our available sneakers in a convenient and consistent way across multiple platforms, which is something we’re still in the process of finalising.
4. Could you tell us about your experience about building a business in such a competitive market and the challenges you have faced?
The main challenge we are facing at the moment is low demand due to the current crisis the world is facing. Many people are prioritising purchases of necessities (and understandably so), rather than splashing out on pairs of exclusive sneakers.
The current social distancing rules are posing a threat as not many people want to meet up for deals or even get items delivered to their homes, to lower risk of spreading the virus.
Our minor challenges are competition from other resellers and local consignment stores. However, we have the ability to scale up faster than most other resellers due to it being a two-man operation, and we carry a large stock, as well as having built up credibility as reliable sneaker sellers. For those that are price sensitive, we beat the consignment stores.
5. What advice can you give to readers who are interested in building a business or a side hustle?
Do your research before you put money in: you can’t expect things to happen overnight, nor can you expect to make money if you don’t know what you’re doing. Remember, if it was that easy, everyone would be doing it.
Good money management is key, so that you have both have enough finances to invest in your business, and you are consistently remaining profitable. As the phrase goes: you have to speculate to accumulate.
Financially, you need to put money into your business, and it’s often the case that the more money you can put in, the more money you will get out. Secondly, in the context of sneakers, you need to have patience and not rush into reselling, but you can’t be complacent and end up with pairs you’re unable to shift; it requires attention and focus.
6. What does a typical day/week look like for you working at your business?
Browsing through Facebook groups, WhatsApp groups and Instagram pages in order to look for best deals where we have identified there could be a sufficient mark up if we were to buy and resell.
We use a number of apps to track upcoming drops and enter raffles: three of the apps we use the most are StockX which helps with price comparisons (think eBay but for sneakers), sneakersnstuff and Sole Supplier.
We are constantly posting inventory on social media platforms to make our sales. Logistically, we pack up sneakers that people have purchased either for delivery via post or we deliver in person.
7. What has been your biggest achievement whilst building your business, something that makes you proud?
The biggest achievement, surprisingly, isn’t a monetary one. Our biggest achievement is the relationships and reputation we have built up with our customers, or sneakerheads, as they prefer to be called.
In the reselling business, I cannot stress enough the importance of being a credible seller that people will trust and give their money and time to purchase from you. There’s a huge community of sneakerheads in the UAE, and so reviews from customers and recommendations are pivotal in our business model.
Another achievement we enjoy on a regular basis is when our market research helps us correctly predict the rise in price of certain sneakers.
8. Finally, what are your top few tips for someone starting their own business while working a full time job? What should they avoid?
If your side hustle/own business isn’t something you truly have a passion for, it’s unlikely you will succeed. At times, it doesn’t feel like a job, because we both love viewing and buying and wearing sneakers.
If we were doing it just for the money, we’d find the market research tedious and boring. If that were to happen, it’s likely you’d suffer from burnout if you’re trying to do it alongside a full time job. Because of the simplicity of the business model, it avoids us having to sacrifice our full time jobs, and rather supplements the income we make from employment. However, we like to dream big.
We are at the beginning of starting our sneaker selling service professionally, and hopefully one day, we’ll scale up large enough to have our own store and make a full time living out of it.
A big thanks to Finance Papi for his insights, for more information check out his socials below.