As Nike (NYSE:NKE) demonstrated with its Air Jordan, the sneaker business is huge. Thanks to media hype and a rabid collector fan base, there’s never been a better time to be involved in the business. However, because of the market enthusiasm, it’s difficult for individual collectors to participate without getting gouged. Consumer technology platform SoleSavy plans to disrupt this paradigm, though, causing huge interest in how to invest in SoleSavy stock.
At the core of the company’s business is its namesake app. Offered in both a free-for-all format along with exclusive benefits for premium members, the app connects users to the latest news and official release dates of highly anticipated sneakers. Of course, it’s the premium membership, which is offered at $30 per month or $300 a year, where true aficionados receive the most benefit.
As SoleSavy’s pitch deck points out, popular sneakers can command ridiculous charge ups in the second-hand market. To avoid this price hike, consumers have to be front of the line when new sneakers are released. The problem is, hot sneakers sell out in seconds, benefiting only scalpers and leaving genuine collectors frustrated.
However, SoleSavy levels the playing field by connecting its exclusive members with retail partners. As soon products drop or are restocked, the SoleSavy app notifies its members, allowing them to purchase in-demand footwear at MSRP, not a 50% or more markup.
Because of the great value proposition, people who aren’t necessarily interested in sneakers are still clamoring to invest in SoleSavy stock. Offered on equity crowdfunding platform Seedinvest.com, you now have that chance.
Invest in SoleSavy Stock to Connect Brands with Fans
For those who are not aware of the massive sneaker fanbase, the idea of paying a premium to know when to buy shoes may seem preposterous. But look a little deeper and you’ll start to recognize why so many folks wish to invest in SoleSavy stock.
First, you have the size and growth of the sneaker market. According to Value Market Research, by the end of 2020, it forecasts global sneaker sales to hit nearly $77 billion. To put this into perspective, Nike’s revenue in 2019 was $37.4 billion. Its international rival Adidas (OTCMKTS:ADDYY) generated $26.3 billion last year.
Moreover, Value Market Research estimates that worldwide sneaker sales will reach nearly $98 billion by 2024. Clearly, you can’t grow a retail segment this large without a strong, loyal consumer base. Hence, SoleSavy serves to disrupt this space by focusing largely on the consumer experience.
Personally, I believe this consumer-centric business model is the biggest catalyst for those who want to invest in SoleSavy stock. Prior to this app, it was the retail platform that profited the most from the sneaker fanbase, whether that be a producer via a direct retail channel or a secondhand market like eBay (NASDAQ:EBAY).
Either way, consumers came last. With direct retail, only those with the biggest pocketbooks could gain access to the shoes. And with secondhand markets, the premiums could be outrageous.
But SoleSavy took a different approach, leveraging the connections and technology of the big boys to offer far better deals to everyday collectors and users. In exchange, SoleSavy charges a small monthly fee.
However, if you’re a true sneaker connoisseur, the fees more than pay for themselves.
Equity Crowdfunding Risks to Consider
Before you pull the trigger and invest in SoleSavy stock, you should consider important risk factors. First, as an equity crowdfunding play, you’re tying up your money. Therefore, you must consider the opportunity cost associated with this private investing offer.
And it’s a big cost as well, with the minimum investment being $10,000. Further, this is the first seed in the company’s funding initiative. Management intends to use the raised funds to “scale the business, expand our technology offerings and continue to monetize all aspects of the industry.” While an exciting proposition, it’s also very risky.
Another point to consider is that while SoleSavy’s growth rate is impressive, the nominal baseline may be low, depending on overhead. Though the company has more than 1,875 customers in North America, this figure needs to accelerate quickly (1,875 x $30/month = $56,250/month), especially if it’s going to expand aggressively.
Also, while the global sneaker market is massive, one wonders what impact the novel coronavirus will have on sentiment. Right now, purchasing sneakers is a luxury of luxuries, especially with millions of Americans facing eviction risks. Unfortunately, the timing may not be favorable to invest in SoleSavy stock.
A Consumer-Driven Business
At the end of the day, SoleSavy is all about the consumer, not big business. That approach has appealed to its small but rapidly growing user base.
As well, a quick look at Nike shares has demonstrated that the footwear and athletic apparel business is resilient, even in the face of a potential economic crisis. Naturally, this will embolden those who elect this private investing opportunity.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.