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ResExp: Risk Versus Reward

For the sake of brevity, I’ll refer to buying higher end items as #coppingkicks and buying discounted items as #rossfinds. Okay, with that out of the way, let’s briefly talk about the risk of either endeavor.

With #rossfinds, you’re looking at discounted items, so costs of items are accordingly discounted. The risk of buying these items are much lower. While bombing on an $80 shoe that doesn’t sell is tough, absorbing that hit is more tolerable. If nothing at all, a #rossfinds purchase can be returned within 30 days of purchase, and past 30 days, you’ll get a store credit. Granted a store credit is funds destined to that store, but you can ideally find another #rossfinds to flip. Rewards with #rossfinds are moderate. Sure, you can find gems once in awhile but don’t expect a homerun each time you visit a Ross. There’s nothing wrong with $20-30 profit per item sold and a steady stream of $20 profits does add up over time.

On the other end, #coppingkicks goes for the homerun each time and even more. It’s all about scooping up the limited items and maximizing resale value. Typically costing$100-200, pairs of kicks are often sold with no returns. Nike and Adidas offer solid return experiences, but they are the exceptions. Most stores sell high end kicks as all sales final. If you land desired items, profits can easily exceed $100 per item. But if your risks turn into bricks, you just lots of money with nary a recourse for recovery. Hopefully, you can sell the items at retail price or even take a partial lost which is better than a full loss.

So you need to figure out your risk-reward comfort level. While it’s fun when you see those high expense sales, it could be intermittent, scattered with pricely mistakes. Or are you willing to trudge along gradually building up revenue?

 

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