Chase Reed, a 10th grader from Harlem in New York’s Manhattan, loves sneakers. One day, the 16-year-old asked for US$50 from his dad to buy a new release.
Troy did not want to disappoint his son but he also wanted to teach him about money. So he coughed up the cash, but decided to hold on to the new pair of shoes until Chase was able to repay the entire amount.
A bulb lit up in the kid’s mind: Why not turn the idea into a business model? That’s how his first venture, Sneaker Pawn, was born.
Chase sold off his entire collection of shoes, which was about 200 pairs, to raise US$30,000. It served as seed capital for the business.
It’s basically a pawn shop — with a touch of Wall Street. A customer brings in a pair of sneackers and quotes a price. The shop keeps the kicks and loans the money. The customer gets back his shoes once he repays the entire amount plus an extra amount for storage fee.
The bigger deal, however, is when another customer comes and makes an offer for the merchandise, which is higher than the loan amount. If the transaction is concluded, the pawner gets to keep 80 percent of the profit and the rest goes to the store. The owner can say no deal, but then he has to pay the amount.
The value of a pair of sneakers could go higher than the original retail price, especially if they are hard to find or the company has stopped making them.
“Young kids don’t have jewelry. They don’t have cars,” Reed Senior tells the New York Post. “But what they do have is the thousands of dollars worth of sneakers in their house.”
Chase is still a regular student at Frederick Douglass Academy. After finishing his homework, he goes to the shop at Lenox Avenue and West 120th Street. There he custom-paint sneakers, which earns him about US$150 to US$250 per pair.
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