Dusseldorf Stepan Timoshin’s business begins with easy pocket money. At the age of 14, the founder got hold of three pairs of sneakers from the strictly limited special model of the Nike Air Jordan 5 Shanghai in a Berlin sneaker shop. At the time, he paid 220 euros per pair, and he resold them for 300 euros. A good margin.
Timoshin got the idea from a video by Youtuber Qias Omar, who explained how this “sneaker reselling” works. And how he earned 500 euros on a pair of shoes. “I had to work two weeks for my holiday job in the hotel,” says Timoshin.
Today, eight years later, the entrepreneur no longer makes pocket money deals. Timoshin has achieved what thousands of young sneaker resellers dream of: His company Vaditim, with 120 employees, achieves sales of more than 40 million euros. And he doesn’t just make his profits with sneakers anymore.
Several tens of thousands of euros are sometimes paid for coveted special models of sneakers on online exchanges. Timoshin himself owns an Air Jordan Eminem in black, which is worth 25,000 euros. He has a shoe wall at home with around 600 different pairs. But what seems like an expensive hobby for crazy collectors is a tough business in which billions are turned over worldwide.
The US investment bank TD Cowen has already put sales of second-hand sneakers at six billion US dollars in 2020 – and sees high growth rates. According to their estimates, the market volume will increase to up to 30 billion US dollars by 2030.
The largest US marketplace for sneakers, StockX, also shows the potential of the business. In the last round of financing in 2021, the company was valued at almost four billion euros, according to its own statements it already had sales of more than 400 million euros at the time. Thousands of resellers trade through the platform, StockX itself earns mainly from commissions.
The business with sneaker reselling moves in a gray area, the manufacturers themselves do not officially deal with the resellers. “The business is based on personal contacts and ultimately also on bribery of the store manager,” admits Vaditim boss Timoshin in an interview with the Handelsblatt.
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Manufacturers such as Nike or Adidas bring dozens of limited special models onto the market every year. They sell these through their digital direct channels and through specialized sneaker shops. Many managers of these shops make a good side business out of selling some of them to resellers for a premium instead of putting them on official sale. A tactic that has not gone unnoticed.
Because the manufacturers now sell most of the shoes via their own apps such as the Nike SNKRS app or the Adidas Confirmed app, the resellers are increasingly becoming IT experts. They program bots that automatically search the manufacturer’s direct channels for interesting models and buy there on a large scale.
Vaditim is aiming for sales of 100 million euros
Apart from the Munich company Hypeneedz, which has a similar business model to Vaditim, most resellers do not have a web shop themselves. They either sell the shoes through social media channels or through exchanges like StockX.
Timoshin actually never wanted to be an entrepreneur, he saw reselling as a lucrative side business parallel to school and later studying business administration. But the prominent influencer Montana Black, with whom Timoshin is friends, convinced him in 2018 to open his own web shop and then a shop in Berlin.
With success. “We grew steadily up until 2020 and finally made ten to twelve million in sales a year,” says Timoshin. But the business really picked up when he added fashion under his own brand Vaditim to his range in addition to sneakers in 2020: “We then closed 2022 with a net turnover of 40 million euros after returns.”
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This year, Vaditim increased sales by around 30 percent in the first four months. The goal is to make a turnover of 100 million euros next year. He still sees a lot of growth opportunities, especially with private labels. “The profitability is also much higher there, the margin on the costs incurred is up to 300 percent,” reveals the 22-year-old.
“The fact that Vaditim is now also offering fashion under its own brand is a sensible strategy,” says Johannes Kliesch, a long-standing expert on the sneaker scene and co-founder of the online retailer Snocks. “With the sneakers you have a highly emotional product with which you can generate huge traffic on your website,” explains the entrepreneur. And when the customers are there, they also buy a shirt or pants.
“It’s a very smart way to make yourself less dependent on the sneaker market,” says Kliesch. Because in this business you always depend on the big manufacturers bringing out interesting models. And especially in the past twelve months, the releases have not been really good.
Big profits with Yeeze models from Kanye West and Adidas
How quickly lucrative trends can be over is shown by the collaboration between Adidas and Kanye West, which resulted in the Yeeze shoe series, which has sold millions of times. “They managed to sell much larger quantities of limited models through ingenious marketing and still give the customer the feeling of scarcity,” Timoshin recalls. “I could get 300 pairs from one model at once instead of 30 pairs and still make profits of 100 to 150 euros per pair.”
But after anti-Semitic statements by the scandal rapper, Adidas parted ways with West last year and stopped selling. Now Adidas has started to sell off the remaining shoes worth more than one billion euros. After that, this morally difficult, but apparently lucrative source also dried up for resellers.
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The most important marketing channel for reselling is social media. Every day Vaditim brings fresh content to Tiktok and Instagram, three times a day there is a new short video, mostly with Stepan Timoshin in the leading role. Very early on, the entrepreneur, who now has shares in 38 different companies, also worked with influencers, which gave him a lot of reach.
But Timoshin’s career as an entrepreneur could have ended very early. At the age of 16 he was charged with tax evasion. “It was stupid and reckless,” he admits. “The accusation was tax evasion in the amount of 122,000 euros, it cost me 180,000 euros with interest and tax consulting costs,” he reports. However, he was not convicted because his youthful inexperience was credited to him.
“I learned a lot from it, all taxes are now paid immediately,” he assures. All bills would also be paid the next day at the latest.
Timoshin’s personal goal is to at least get a bachelor’s degree from his currently paused business studies. After all, he doesn’t want to take the next big step in his career completely self-taught. “I still have big plans,” says the founder, “and would like to go public with a company.”
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