16-year-old's sneaker business to hit US$1 million in sales this year

16-year-old's sneaker business to hit US$1 million in sales this year

If you ask Benjamin "Kickz" Kapelushnik how his business is doing, he would probably echo the catchphrase of Pittsburgh Steelers wide receiver Antonio Brown.

"Boomin'!"

Dubbed the "Sneaker Don", Kapelushnik is only 16 years old - but he says his self-made sneaker resale business is on its way to US$1,000,000 (S$1.36 million) in sales this year. These aren't just any sneakers that he is selling: The most expensive pair of shoes he has ever sold went for around US$20,000.

Kapelushnik started gaining a large following on social media after he began appearing on the Snapchat account of one of his biggest customers, famed music producer and rapper DJ Khaled. The relationship between the two blossomed after a mutual friend introduced them, and Khaled became a loyal buyer.

Kapelushnik's celebrity clientele has now grown to a number of high profile rappers and athletes-who will go to him for rare sneakers before they are available to the public.

The sneaker market is certainly, at the risk of sounding repetitive, booming. According to sneaker data website StockX, the secondary market for kicks has reached US$1 billion, boosted by fashion hungry fans chasing the latest and rarest brands.

However, Kapelushnik saw an opportunity to make a profit from reselling sneakers way before the market reached this point. In a recent interview with CNBC's "Closing Bell", the teen said he started selling sneakers to friends and classmates when he was in the fourth grade.

"I didn't have the money to afford them because my parents didn't want to fund the hobby. So I had to just resell shoes in order to fund my hobby and then I made a business out of it," he said.

His business wasn't built overnight. He first started realizing it could be a legitimate business when all the kids at school wanted his shoes, so he used to pay people to wait in lines to get them, which he would then resell.

"It took a while," he explained to CNBC. "I never made a business out of it until later on when I saw I could make a lot of money from it. I started buying in bulk and then reselling on my website."

40 per cent profit margins

What makes the business so profitable is his ability to get rare sneakers, like Air Jordans or Kanye West's Yeezy brand before they are available to the public, from his carefully cultivated connections. Just don't ask him who his connections are, or where he gets the sneakers.

"Everything I do is top secret," he told CNBC. "If I told everyone my connects, I wouldn't be the plug!"

The man of many nicknames also goes by "sneaker plug" because of how plugged in he is to the industry, and his ways of getting rare sneakers before their release date.

He will buy the sneakers in bulk and sell them on his website usually for a minimum of a 40 per cent profit margin (For context, Wall Street giant Bank of America has a profit margin of a mere 20.75 per cent). Kapelushnik said for certain sneakers, if he can get them at retail price, profit margins can be upwards of 1,000 per cent.

One of his latest purchases that he plans to profit from is a bulk order of the new Kanye West Yeezy sneakers.

"I have quantities and sizes that nobody else has and it's before the release date so it's kind of like I set the price, but the market sets the price," he said. "Like they come out for US$200, but no one is going to get them for US$200. So people are going to pay US$900 or US$1,000 when they come out, or they can get them from me for US$1,300 before the release date."

Having a 16-year-old son running a lucrative business might be a lot for some parents to handle. That's why it took a little time for his father to come around to the idea.

"When I was in 8th grade I bought a shoe for US$800 and my dad told me that I am out of my mind and that I would lose money. Then I wore it and sold it for more. My mom was always with it but my dad has come around," he told CNBC.

Kapelushnik has big plans for his future, including opening up stores and chains to sell shoes to go along with his website. He still has plans to go to college however, despite running a successful business at just 16 years old.

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