Junior Grant Gold gets home on a normal Wednesday after school and picks up a package on his doorstep before going to his room. The package, from Raleigh, N.C., contains a black Nike shoe box with LeBron 8 South Beach shoes inside. Bright turquoise with neon pink laces, those shoes are worth $500, according to Gold – nearly 66 percent more than what he paid for them. He stacks the box on top of five others in his room, where he keeps a total of 16 pairs of shoes. On Sunday, Gold will sell every single shoe. Then he will start again, selling another 20 pairs of shoes next Sunday. Gold exclusively runs Traffic Kicks, a  thriving business in the secondary shoe market.
“It all started back in middle school when it was a popular trend for people to collect shoes,” Gold said. “I was into it. I had my own little collection of shoes, and then just by being in the whole atmosphere with other ‘sneakerheads’ there started to be releases that were pretty hyped up – there was a lot of demand for it – and I got one of those releases and I realized, ‘Hey, I can sell this for way more than what I just got it for from Nike,’ and then I realized the potential of the shoe market and just ran with it.”
THE MARKET
The secondary shoe market is a marketplace for coveted shoes, typically ones that are rarely released and in low quantity. For example, according to Gold, almost every Saturday Nike releases a shoe in limited supply, both online and in retail. They sell out in minutes, so the only place to get them is through the resale market. With the demand so high, sellers are able to have a significant markup, from as little as 5 percent to, in rare cases, over 1,000 percent.
According to Campless.com, a site—often referred to as the Kelly Blue Book of sneakers—that tracks the secondary shoe market, in the last year, the secondary shoe market recorded 9 million sales, totaling over $1.2 billion, which is a conservative estimate, according to Josh Luber, founder and operator of Campless.com. In such a large market, Gold has carved out a niche for Traffic Kicks, a low-price, shoe-trading business. He said he typically does not buy straight from the stores or online and instead gets his shoes in the aftermarket and sells them again for a profit. Gold’s business is directly tied to the large rise in the sneaker fashion industry.
“(The rise started with) how iconic the (Nike Air) Jordan was, how many kids were like, ‘I want to be like Michael Jordan’ and that drove everything: the hype, the craziness, and that’s when shoes started becoming a style,” Gold said.
The shoes in the resale market are almost entirely Nike and Jordan, a subsidiary of Nike. When including Jordan as part of Nike, Nike makes up 96 percent of the secondary shoe market, with the resellers’ combined profits being $380 million. Skechers – the second largest shoe company in the world – recorded a profit of $209 million. If it were its own company, the resale market for just Nike would be the second largest shoe company in the world.
According to CHS business teacher Richard “Chard” Reid, Nike’s dominance has to do with its name recognition.
“I think it goes back to their branding. I mean who wants to collect Asics? Or Reebok? They have been able to brand themselves as the brand in tennis shoes. The demand for the shoes is a reflection of how well Nike has branded itself over the years,” Reid said.
With the resale market for Nike so lucrative, the company has stayed relatively low on retail prices, despite the fact that a $200 shoe can fetch well over $500 in the resale market. For a company that recorded $27.8 billion in sales in the 2014 fiscal year, $380 million still represents a significant amount of money being left on the table due to growth for large businesses being hard to come by. While Reid said the secondary market is important for Nike because it actually helps give and keep that brand cachet, Gold said the current popularity of Nike is caused by the feeling that consumers get when they purchase such a limited and coveted, yet relatively cheap shoe. Essentially, he said, it is like buying a Toyota Corolla but feeling like you are driving a Ferrari. However, the bottom line appears to be that “sneakerheads” don’t represent the majority of Nike’s customer base, and by
raising prices, companies would alienate more important customers.
Reid said, “Why would Xbox not charge a higher price when their new systems come out, or Nintendo Wii, when it first came out? People were reselling (those gaming systems) for six, seven, eight hundred dollars. And you think to yourself, ‘Why not just start at six, seven, eight hundred dollars, if that’s what consumers are willing to pay?’ But I think it’s such a niche market that it’s not what most consumers are willing to pay. I think at the end of the day, they’re not concerned with creating new channels; they have some really strong distribution networks already, and they’re just going to focus on what they do best, selling millions of shoes.”

THE BUSINESS
Traffic Kicks is a website-driven business that has an Instagram following that just broke the

7,000 mark, a YouTube page—under the name JG Sneakers—that has more than 7,000 subscribers, and even a Snapchat account. Although many shoes sell for amounts that approach and even surpass quadruple digits, Gold deals with the lower end of the market, although he has recently increased his presence in the pricier models. His price range is typically anywhere between $100 and $200 shoes, which approximately nets Gold $20 to $40 profit per shoe. On average, he makes $2,000 a week in sales and $400 in profit. For a full year, that would end in a little over $100,000 in sales and $20,000 in profit. In a large market, Gold has been able to find success through his range of shoe selection, low prices and customer service, according to one buyer, senior Victor Salas, who has bought six pairs of shoes from Traffic Kicks.
“No matter what kind of shoes you like, Grant has something for everybody,” Salas said. “Jordans, LeBrons, whatever. He always has shoes for a really low price, and he is very reliable, as you receive the shoes really fast. M

ost people come back and buy from him because they know that he treats them well.”
Salas is not a rarity; Gold said every day he sees about two or three people who are wearing shoes they bought from Traffic Kicks. His Instagram has grown exclusively through word-of-mouth advertising. Growing the business has forced Grant to make some sacrifices, particularly in the amount of time he spends on his phone.
“I’m always on my cell phone, which I personally don’t like – I like to just live in the moment without my phone – but part of the business is that I have to be on my phone, making deals, responding to customers, updating my Instagram, so that part isn’t the best, but it has to be done and it’s definitely worth it,” Gold said.

SCHOOL VS REALITY

Gold said he has learned a lot from his time working on his business, lessons perhaps CHS could never teach him. Gold said he has gained an advantage in the business world because of his experience, particularly in negotiating.
“There is a lot of negotiation that you can’t learn in the classroom,” Gold said. “I learned a lot of tricks along the way of just basically how to get people to sell to me for the price I’m going to buy it for.”
Reid said he agreed with Gold in that the business world has things that CHS simply cannot teach.

“You can’t provide students with opportunities to be responsible for their own actions in a business or to experience what it really means to have risk vs. reward, and what that’s going to feel like. You can talk about those things ‘til you’re blue in the face, but until students actually have that hands-on experience, they’re not going to really get it,” Reid said.
However, Reid also said the business department really does allow students to gain a great advantage. There are 13 teachers in the department, many of whom have real-world business experience, with a wide variety of course offerings, allowing students to learn business from multiple aspects. Gold has taken advantage of this, taking IB Business Management and Marketing in order to further his business education, and he has acquired skills like instituting an accounting spreadsheet to keep track of everything he sells, or using business analytics as a result..

“(I’ve implemented) a lot of things, for example the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. I’ve always known them, but I actually wrote it out after learning about it in class for my own business and it really painted a clear picture of stuff I need to improve on, stuff I need to exploit, my strengths and all these other things that I can apply to my real business and that really helped me out,” Gold said.
Reid also said in addition to instruction, teachers try to find ways to give students a way to implement what they learn in a more hands-on way. Gold is part of DECA, a business club, and is using Traffic Kicks as the foundation for the business paper he is sending to the DECA state competition on Feb. 28. Other examples of real-world experiences CHS tries to replicate include the Carmel Café and Market, a business run by the DECA leadership team, and a program that  puts accounting students in charge of the books at CHS clubs.

“I think that’s one of the cool things about the Carmel Café and Market, is that students that are
on the (DECA) leadership team do have a chance to experience some of the frustrations with business,” Reid said. “How do you manage your staff? What happens when you forget to order stuff? How do you maintain inventory and have good relationships within your supply chain? So I think we try to prepare students the best we can through those types of experiences, but nothing really replaces real-world experience.”

BUSINESS EDUCATION
The logical conclusion for a person who wishes to run his own business is to go get a business education at a university. John Shi ’08 is the co-founder and CEO of Hillflint, a luxury college clothing company. He started the company upon graduating from Dartmouth College in 2012, where he majored in economics and philosophy. Even though the assumption would be Shi has been helped greatly with an economics degree from one of the top universities in the country, he said it’s actually been his other major that has greatly helped him run Hillflint.
“Philosophy has helped me a lot in business because it’s helped me empathize with people,” Shi said. “Most people tend to think of business as you negotiate the best deal with the best facts, but it’s actually mostly people-based. Do I like you? Does he like me? At the end of the day, that’s how deals get done.”
Gold said he plans to obtain a bachelor’s degree in a business-related field, one of the most popular majors every year. Many students have misconceptions, however, of what they will learn at a business school, especially for those planning to become—or already are, in Gold’s case —entrepreneurs, according to Shi.

“The Kelley School (of Business) is an excellent school for business at the undergraduate level; (the University of) Michigan has a great business school,” Shi said. “Those things are all good, but those business programs prepare you to be an excellent corporate operator and a corporate citizen of big companies. They don’t do as good a job preparing you to start your own thing.”
According to Shi, the best way for a person to prepare for entrepreneurship is to participate in many extracurricular activities and take a variety of classes to broaden a person’s horizons, in academia and developing people skills. As such, Shi said he is a big proponent of liberal arts colleges because he said they teach a person to think creatively, which is critical when starting a business.
“When you apply rigid modes of thinking and get trapped in situations, you think, ‘Oh, well, according to so-and-so, if this happens, then that will happen.’ Rarely does it happen that way,” Shi said. “It’s, ‘This happened and a bunch of other stuff happened,’ and the thing you thought was originally going to happen never happened. To have liberal arts training and to take a broad set of classes that maximizes and stretches how you perceive the world is more important than getting all A’s as a business major.”
Shi said taking HiLite his sophomore, junior and senior years at CHS is a perfect example of an extracurricular activity that prepared him well. According to Shi, HiLite taught him how to operate in an organization, how to deliver feedback, how to be detail-oriented, how to manage people and how to be managed. But he said this doesn’t mean business classes are unnecessary. Both Shi and Reid said without a solid business knowledge foundation, becoming a successful entrepreneur becomes nearly impossible.
Reid said, “If you are going to be running a business, there is nothing that replaces learning
accounting in college and learning how to run your own financials and understanding all aspects of business. I mean, there are plenty of people who have created great inventions and great products, but they don’t know how to run a business and it’s failed. I think that there is a lot to learn in business that you can pick up along the way… but at the end of the day if you don’t understand business, it’s going to be hard to be successful in the real world.”
In the end, balance is the key to getting the best possible business education, according to Shi. Students should take business classes, a variety of other classes and extracurricular activities he said, but perhaps the most important is they should also learn to develop relationships and good social skills.
“The best class isn’t on the academic side. Being social and making friends and learning how to be like a ‘normal’ person, that gets a lot of people,” Shi said. “There are so many people that are really robotic. I think the temptation with any field is to learn the content of the field at the expense of the people relationships, but the interpersonal aspect is really, really important.”

LESSONS LEARNED

Succeeding in owning a business is not easy, and Gold said he has suffered through challenging times before Traffic Kicks got to the point where it is today. However, he said he is not satisfied and is always looking for ways to create a better business, like adding a subscription fee to be able to access the Traffic Kicks website, something Gold said he will be looking to implement in the next year. It is that advice, to never give up and to constantly find new, better ways to do business, that Gold would say is the most important idea. “Stick with it. If it’s not successful at first, you’re obviously doing something wrong, so change your ways in a way that works. So it’s a lot of experience, it’s a lot of trial and error. Don’t quit if it’s not working, fix it so it will work,” Gold said.
Gold’s realization of his entrepreneurial instincts is something Reid said will become, if it isn’t already, a new trend in the business world.

“I think the numbers are pretty indicative that millennials in general are more prone to start their own business,” Reid said. “The things they value most are autonomy, purpose and mastery. I think they want freedom and they don’t want to be told how to do things. They want to explore. They want a chance to do something special themselves, and I think you’re going to see more and more of that.”
Despite the amount of effort, time, trials and tribulations that come with owning a business, Gold said he has never regretted his decision to start Traffic Kicks, and hopes to sustain it for a long time, possibly even opening up a physical store in the future. But, Gold said he doesn’t run Traffic Kicks for the money. Shoes are Gold’s passion, and he reflects that passion through Traffic Kicks. To Gold, that is the key to success in not only business, but life.
“Go into something that you actually enjoy, because there’s nothing worse than selling, say, toilet paper rolls,” Gold said. “It might be profitable, but in the end you might dread going to work. I really enjoy what I do, and if you can find something that you enjoy that’s great.”