This Side Hustle Spotlight Q&A features Ray Cao, a Gen Z seller on StockX, an online marketplace and sneaker reseller.
Image Credit: Courtesy of Ray Cao
What was your day job when you started your side hustle, and why were you interested in entrepreneurship?
I was a student working as a part-time barista earning about $8 an hour (minimum wage at the time) at a bubble tea store in New York City. My family had gotten into $200,000 worth of debt from speculative investments and gambling. We were desperate to the point where my parents borrowed from relatives to get by. This put an obvious strain on the relationship between them, and my family would quickly become the topic of untoward gossip. I was ashamed, scared and insecure. I eventually cultivated these feelings of vulnerability into action and dove into entrepreneurship.
When did you start your side hustle, and where did you find the inspiration for it?
I started the side hustle in 2015 when I had just turned 18. Sneaker and streetwear culture was growing popular, and demand for these coveted brands trended higher. I heard from my friend that this would be a lucrative business opportunity, and we both pursued it. My inspiration for starting and continuing this business was always my immigrant family.
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Throughout my childhood and adolescence, I grew to understand that I was much poorer than my peers. My parents were seamstresses and worked around the clock to support the family. My mom would tell me that she only earned a dime for each fabric she had sewn together, totaling only $200 weekly. Even my late grandma would spend her days picking up bottles and cans to recycle for five cents per piece. My parents and grandma navigated their lives here through sacrifice, cultural disparity and language differences. To this day, their story continues to fuel my ambitions and keeps me progressing.
What were some of the first steps you took to get your side hustle off the ground?
I joined online communities and forums (Reddit, Facebook, NikeTalk) to conduct research and opened a bank account and card to purchase online drops. Eventually, I bought my first item, Supreme Air Jordan Desert Camo 5s (2015), for $225 and sold them locally for a $400 profit.
What were some of the biggest challenges you faced while building your side hustle, and how did you navigate them?
As college progressed and my finance career came into focus, I didn’t have the energy to grind through the manual labor required for the business (sorting through incoming inventory, shipping outbound orders, conducting quality checks and dealing with returns from purchases and sales). I automated the business through Excel spreadsheets and worked with my parents to facilitate the day-to-day operations. During this time, I also gained access to store inventory at the StockX warehouse. This dramatically reduced my active work time and involvement to 10 hours a month. Everything I needed to manage the business could now be done from my laptop anywhere in the world.
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As my available capital increased, a new challenge sprouted: order sizing. For example, with $1,000 and a hype release, it was easy to size my order — as much as I could afford. When that available capital increases a hundredfold or a thousandfold, things become more complex. I remember placing a roughly $10,000 order for the Nike Blazer Mid 77 Vintage White Black. About the first 30 sold at a 15% premium, but demand dried up as I flooded the market with available pairs. I lost about $3,000 and quickly learned the importance of order sizing and liquidity.
How long did it take you to see consistent monthly revenue? How much did the side hustle earn?
During the early growth stages, monthly revenue trended closely with the amount of capital that was readily available. As the business matured, monthly revenues in the past two years peaked at a little under $20,000.
What does total revenue look like now?
I’ve earned about $1.53 million in total revenue on StockX.
What do you enjoy most about this side hustle?
I enjoy the hands-off nature of this business because it allows me to simultaneously progress my finance career (whether it’s a new business venture or another corporate gig). The network of partners and relationships I’ve built along the way is invaluable, and so is being surrounded by so many smart individuals — special shoutout to the StockX team!
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What’s your advice for others hoping to be successful sellers on StockX?
Invest in your long-term relationships; do not become shortsighted and chase every single transaction with profit in mind. Your network is a major barrier to growth, so take every opportunity to show potential partners the value you can bring them. Good information is valuable and scarce: Conduct your market research within small niche communities and build connections organically. Finally, you need a good accountant to set up your business and keep accurate books and records.