Teen creates business out of used shoes
A 16-year-old and his dad have opened a pawnshop. The store uses athletic shoes as collateral.
Chase Reed and his father, Troy Reed, opened Sneaker Pawn on Lenox Avenue in New York City's Harlem neighborhood. They're looking to capitalize on America's multi-billion dollar athletic footwear market. And the high prices sneakers can get being re-sold.
The idea started close to home. Chase would ask his father to borrow money after Reed had spent hundreds on sneakers for his son. Reed would hold onto a pair of his son's shoes until he had gotten his money back.
"My son said, 'Dad, you're actually kind of making me pawn you my sneakers,'" Reed said. "Once he said that, a light bulb went off."
He told his son, "You don't have any money. But you got all these sneakers. Imagine how many other kids got all these sneakers and probably need cash."
The duo decided to renovate the space in Harlem into a retail location. And to help pay for it all, Chase sold his own shoe collection.
"My father told me, certain things you have to sacrifice," Chase said.
Basketball sneakers can sell and re-sell for hundreds of dollars. The cost depends on several things. They include the shoe model, how limited the production run was, and how easy it is to find a pair in good condition. Sneaker Pawn carries shoes with price tags of more than $1,000.
The pawn shop opened about six months ago. It offers different options. The pawn shop works like this:
People looking to just unload their sneakers specifically basketball shoes can offer them to the Reeds to be bought outright. Or they can leave the shoes for sale by the Reeds. That nets the Reeds 20 percent of the final sale price. The rest goes to the original owner. Those looking to pawn their sneakers have two months to redeem them for the amount of money the Reeds forwarded them plus a storage fee. Shoes that are being pawned are held in storage. They are not displayed. The owner either gets them back or gives them up.
Chase has the final say on whether they buy a certain pair from someone. He also decides what prices they sell the shoes. He customizes some sneakers with his own art. Since he's still in high school, his father handles the running of the store during the weekdays.
It's been a learning experience for Chase. He's had to put aside the re-building of his own collection.
"Sadly there are a lot of size 14s that come through the store," he said. "The nicest sneakers on Earth that come through the store, and the first thing I do is sell them."
He's philosophical about it. "I can't let my sneaker high get in the way of me making money. Me being a businessman," he said.
Critical thinking challenge: Why might a pawn shop for flip-flops be less successful?