Marc Duran
valley stream, NY (USA)
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Sneakerchange
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Startup
Location:
valley stream
Industry:
Internet
Year Founded:
2009
Number Employees:
1-10 people
Description:
Business Plan
SneakerChange will become the world’s recognized leader in empowering consumers to buy, sell, and trade footwear world-wide through our revolutionary on-line trading platform as well as our off-line community of expos and events. Not only is SneakerChange a venture of high-potential revenue, it will also have an immense social impact. By becoming the world’s lead partner with manufacturers, retailers, consumers, governments, and NGO’s, SC will radically disrupt the multi-billion dollar counterfeit market. In turn, this will: boost profits for manufacturers (thus creating more jobs and tax revenue), give consumers the freedom to buy with confidence, and help eradicate inhumane working conditions in the wide-spread sweat shops that generate the majority of such goods.
In 2004, the market for athletic footwear and sports apparel in the U.S. topped $52.2 billion. Nike (the world’s leader) achieved $13.7 billion worldwide in sneaker and sports equipment followed closely by Adidas with $11.1 billion. In the US alone, more than 350 million athletic shoes are sold each year. The global sneaker industry is more than $26 billion with 80% coming from lifestyle or urban fashion inspired by the hip hop culture.
One may ask, isn’t the sneaker industry rather mature? Is there really room for additional innovation? Well, despite more than 40 years of innovation, the worldwide footwear market is still booming. In fact, a top Nike designer recently remarked, “After 28 years in the business I see dramatically more opportunity for product innovation than ever before.” Analysts predict such rampant innovation will boost the industry figures to new record highs.
SneakerChange will capitalize on this booming growth and need for social change by 1) launching a website that is unlike anything on the marketplace for such goods and 2) by building, cultivating, and leveraging an extremely dedicated fan base that is passionate about the issue.
SneakerChange website members will decide how much they want to sell their shoes for. Buyers also get to decide how much they're willing to pay for a pair of shoes. This is why our slogan is "You Decide.” Unlike eBay—who gouges users with outlandish commission for their listings—SneakerChange will not be using the "bidding system.” Why? When consumers bid for something, it usually raises the original price and people end up spending a lot more for the item than it usually costs. SneakerChange will allow users to send offers on the item they are interested in directly to the seller who then simply accepts the offer he/she feels is best for them. In fact, SneakerChange’s negotiation method is similar to bartering swap meets by sneaker heads that are common on the streets.
Located in New York City, SneakerChange is the brainchild of Henry Sufran, Marc Duran and Kenny Luna, three passionate sneaker heads that see enormous opportunity to capitalize on the booming sneaker market and start a discussion among the millions of other sneaker heads out there. While SneakerChange will initially be targeting only the sneaker head fan base to build a community and beta test the website, ultimately, it will become the platform for all footwear-seekers.
In order to dramatically curtail the counterfeit market and also provide world-class support to sneaker heads around the world, SneakerChange will employ a 360 degree approach to reducing their risk of trading, buying, and selling sneakers. Below is a list of these multiple approaches, ranked in order of planned implementation.
Sneaker Wiki – Imagine the world’s largest on-line database of real and fake sneakers. Imagine a place similar to Wikipedia that catalogs and archives the world’s sneakers. The Sneaker Wiki will allow sneaker heads to create profiles of sneakers complete with written descriptions, links to websites, photos, and videos. Additionally, on each sneaker profile, users will also have the ability to add descriptions of the knock-offs based on that particular shoe. SneakerChange will partner with the leading brands worldwide such as Nike, Adidas, Reebok, and Puma, whose designers will create a Sneaker Wiki profile for every shoe that has ever been launched. Given that shoe companies are already creating content for the purposes of selling the shoes, this Wiki will not require much additional effort on their end. Furthermore, the benefit will outweigh the costs, since they are currently losing billions of dollars per year to the counterfeit market.
FAKE University (FAKE U) – FAKE U will produce and crowd source content from manufactures, retailers, and consumers to educate buyers on how to avoid being scammed into purchasing fake sneakers. FAKE U will use these experts to teach mini on-line courses—all free of charge to members of SneakerChange.
Push for Standards and Legislation - SneakerChange will partner with leading manufactures, designers, retailers, consumers, and government to create innovative solutions, technologies, and standards to combat the multi-billion dollar counterfeit market. Long-term, SneakerChange envisions the creation of a worldwide counterfeit task force that will be charged with introducing legislation and standards to governments, manufacturers, and retailers worldwide.
100% authentic guarantee – SneakerChange realizes that despite all of the aforementioned ways to combat the fake goods market, there will still be consumers who are taken advantage of. To protect consumers—and at the same time give back to the less fortunate-- SneakerChange will institute a “100% Authentic Guarantee.” This will give consumers who have purchased a counterfeit good a coupon in exchange for the fake goods. SneakerChange will then partner with charities that provide shoes to those in need. Essentially, in exchange for a coupon to the consumer, the fake sneakers will be donated to people in need.
Ultimately, SneakerChange seeks to set the gold standard for partnering with manufacturers, retailers, consumers and governments to create innovative technologies, ideas, and legislation to dramatically reduce the widespread social impact of counterfeit goods. Not only will this vision help reduce such crimes, but it will also impact the lives of millions of victims of unfair labor practices, since the majority of all counterfeit goods are produced by such victims.
SneakerChange realizes that this comprehensive approach can yield a universal model that can be scaled to other industries suffering from similar counterfeit issues.
SneakerChange will impact the community and world in three primary ways:
1. Job Creation - Within three years, SneakerChange expects to employ more than 100 people primarily in the New York City area. The creation of these jobs will in turn provide financial benefits to not only the families employed by SneakerChange, but also those stakeholders who will gain increased purchasing power by our employees injecting their income into the local economy.
2. Social Impact – SneakerChange aims to radically disrupt and disempower the multi-billion dollar counterfeit market. As mentioned above, SneakerChange will forge groundbreaking partnerships with manufacturers, retailers, consumers, and governments to accomplish our ambitious goals. Again, not only will this give consumers the power to buy, sell, and trade goods with confidence, but it will also provide a huge boost in revenue to major manufacturers who have historically lost billions due to counterfeits. Lastly, the culmination of all our efforts will also improve the lives of millions of impoverished people that currently suffer from inhumane working environments in illegal sweatshops.
3. Bring back lost profits, lost jobs, and lost tax revenue – As a result of our extreme efforts to eradicate the counterfeit market, we will be injecting billions of dollars into the world’s leading manufacturers who can then create more jobs and employ more capital towards social change. Furthermore, the billions of dollars gained in profit will also generate enormous tax revenue that will certainly provide a tremendous boost to the indebted cities, states, and country as a whole. For example, the following statement by Rick Ishitani, one of six detectives on LAPD’s Anti-Piracy Task Force demonstrates the immensity of this problem and—furthermore—how much money can be recovered by a successful plan. “The task force was launched in response to a 2007 report from the Los Angeles Economic Development Corporation, estimating that the loss to L.A. County companies from piracy and counterfeiting was about $5.2 billion in 2005. And since its formation, the underground landscape has evolved.” Placing California’s economic woes in this context, the counterfeit problem becomes an even bigger one. In fact, by applying the LA sales tax rate (9.75%), this would translate into over $500 million dollars of gained tax revenue. The LA budget deficit is $529 million. Of course, not everyone who bought fake goods would splurge to buy the real deal, but the numbers are staggering as to how big the problem is. What’s scarier—researches predict that with advances in technology, this revenue loss will only continue to grow at a steep pace.
Without dispute, eBay is the dominant player in the global online footwear transaction economy. However, eBay also sells cars, airplane tickets, trinkets, electronics, and Pez dispensers. It does not cater to one particular industry, especially the opportunistic industry of footwear. eBay is not focused on the consumer footwear industry. In the eBay market, while—yes—some will clearly benefit by having their products bid up, most are negatively affected when no one bids on their listing and they are forced to sell below market value. eBay does not recognize that this industry would rather not engage in the bidding process and rather be actively engaged in negotiations for sneakers.
SneakerChange, however, will recognize and embrace this preference. In doing so, it will become the world’s #1 online destination to buy, sell, or trade footwear. How? By creating a community solely focused on the footwear industry. SneakerChange will leverage the rapidly growing, emerging sneaker culture, starting first in the United States, and then quickly moving to a global playing field of London, Tokyo, and more.
SneakerChange is unique and interesting because it’s never been done before. No one has (thus far) created a revolutionary trading platform allowing users to buy, sell, and trade sneakers without engaging in a bidding war auction process like eBay.
As you can see in the numbers previously mentioned, this industry is rapidly growing, along with the underground culture of sneaker heads. SneakerChange will not only leverage the huge market opportunity (eBay currently earns more than $160m in transactions per year) without gouging customers with exorbitant transaction fees, it will also build a social network and community around people who are extremely passionate about footwear.
Furthermore, SneakerChange is extraordinary and unique because it will actively disrupt the multi-billion dollar counterfeit market. From our extensive research and focus groups, it is clear that this is a rampant and widespread problem that has only begun. Consumers are concerned that they cannot buy, trade, and sell sneakers without confidence. Moreover, manufacturers are losing billions of dollars. Furthermore, this problem is the root cause of thousands of sweatshops created to produce this counterfeit market.
Our revolutionary online trading platform is currently in the design stage. We anticipate this to be completed by end of January 2010 at the latest. We will launch it as a beta site. We will then aggressively market the site starting first solely in the NYC region because that is where the largest sneaker head population is in the United States. Utilizing advanced SEO and a comprehensive social media strategy, we expect to have more than 10,000 registered users online with an anticipated 1,000 transactions having taken place within 3 months of initial launch.
Within 6 months of initial website launch, we plan to build a world-renowned Board of Advisors to leverage the wisdom, knowledge and contacts of industry executives, famous designers, and notorious sneaker heads. Additionally we also plan to ink partnership deals with celebrity sneaker heads including Missy Elliot, Jay-Z, and Turtle from the hit TV show Entourage. Forging a partnership with such individuals will, without question, dramatically impact the success of our start-up by instantaneously generating worldwide brand recognition. Without question, this strategy will put us in everyone’s mind as the #1 retailer of footwear.
Within 1 year of launch date, we expect to be the #1 industry leader with more than 1,000,000 registered users and 5,000,000 transactions, thus resulting in revenues topping $10,000,000.