Imagine flipping a humble $1,000 birthday gift into a thriving business empire worth $50 million in just five years – that's the incredible journey of Oscar Rachmansky and his company, OS Group, in the wild world of sneaker resale. But is this market gasping its last breath, or is it simply shedding its old skin for something bolder? Let's dive into the story that might just redefine how we think about buying and selling kicks.
Far from fading away, the secondary market for athletic shoes is undergoing a transformation, according to Rachmansky, the visionary behind OS Group. Instead of chasing after rare, limited-edition sneakers one pair at a time – the classic hustle of flipping for quick profits – his approach zeroes in on volume. Picture this: supplying entire batches of sought-after sneakers to independent retail shops across America. It's a game-changer that caters to the growing demand from smaller players who can't always snag the big drops.
Since launching OS Group back in 2019, Rachmansky and his team have propelled their business-to-business operation from a modest $1 million in sales in 2020 to an eye-popping projection of $50 million by 2025. For beginners wondering what B2B means, think of it as companies doing business directly with each other – no middlemen like retail stores for end consumers. By handpicking both their buyers (clients) and sellers (vendors), OS Group has stepped into a crucial gap in the industry. They source large quantities of inventory for boutique shops, allowing these underdogs to expand without the hassle of hunting down products themselves. And the growth? It's been nothing short of explosive.
Rachmansky's roots in this space run deep. Growing up in New York, he kicked off his sneaker resale adventure with that birthday money, turning it into a high school side gig that netted him $30,000 to $40,000. 'I started as a sneaker reseller with $1,000 in birthday money, and through high school as a side hustle. I basically made about $30,000 or $40,000, and I used that to fund this business,' Rachmansky, now 23, shared in an interview. Even during college, he kept things low-key as a minor venture. Then, the COVID-19 pandemic hit, forcing him back home. What he witnessed was a resale boom in sneakers and streetwear that few could have predicted.
Peer-to-peer platforms like GOAT and StockX were booming, alongside established spots like Flight Club and Stadium Goods. A 2020 report from Cowen Equity Research predicted the sneaker resale market could balloon to $30 billion by 2030. With more people jumping into reselling, the need for bulk wholesale inventory surged. Rachmansky doubled down on what made OS Group special: a streamlined B2B setup to support the wave of new independent stores sprouting up everywhere.
And this is the part most people miss – the real magic behind OS Group's strategy. 'We said, 'Hey, look, you’re a business owner. Instead of running around and trying to source shoes from your local mall and then put them in your storefront, why don’t you come and buy from a real organized distributor?' We came in as this one-stop shop supplier, doing the dirty work for these small businesses so that they could focus on scaling the parts of the business that are important to them,' Rachmansky explains. Essentially, they handle the sourcing and logistics, letting shop owners concentrate on customer service, marketing, and growth. It's like being a superhero sidekick for retail entrepreneurs.
How do they pull off this bulk sourcing? OS Group partners with other resellers and boutiques that have surplus stock, negotiating wholesale purchases to build their inventory. Their team, which has ballooned from a solo operation to 25 dedicated staff members, taps into a global network of over 800 sellers spanning 30 to 40 countries. For trendy streetwear and accessories, they buy straight from brands like Birth of a Royal Child, Jason Markk, Retrovert, and Onyx Apparel. 'We help brands get distribution into these storefronts across the country,' Rachmansky notes. Imagine a fledgling streetwear label wanting to reach all 50 states – partnering with OS Group is like unlocking a nationwide retail army.
Take A Sneaker City as a prime example. This multi-location resale chain, with spots in Florida, Illinois, Massachusetts, New Jersey, New York, North Carolina, and Texas, owes much of its success to OS Group. Founder Brandon Gutierrez recalled, 'When I first started working with OS Group in 2020, I was operating a single location in Albany, New York. Today, I’ve expanded to 12 locations nationwide, from Massachusetts to Texas. Over the years, I’ve invested millions of dollars with OS, and they’ve remained my preferred vendor every step of the way. They’ve been instrumental in enabling me to scale this quickly.' It's a testament to how reliable bulk suppliers can fuel rapid expansion.
OS Group's clientele is diverse: about 70% are small independent resale shops, while the other 30% includes bigger players like StockX, GOAT, Stadium Goods, Shein, Walmart, and even TikTok Shop. Their unconventional method has paid off big time, but not without navigating industry headwinds.
But here's where it gets controversial – while OS Group's model thrives, traditional sneaker flipping profits have dipped post-pandemic. With endless new releases and pickier shoppers, those $1,000-plus flips from weekly drops are rarer than ever. Experts and fans alike sense a market slump. StockX's 2024 'Big Facts' report reveals that only 47% of sneaker launches sold above retail price, down from 58% in 2020. Competitors like GOAT Group hinted at shrinking margins for sellers (without specifics), and Stadium Goods even shut down its iconic NYC store to focus on online sales. Some argue this downturn is inevitable as the market matures – but is it a temporary dip, or a sign of oversaturation? What if the real issue is that consumers are wising up to hype and demanding value over exclusivity?
These shifts hit OS Group too. Rachmansky admits their sales patterns echo the broader market, with staples like Air Jordan 1s and Nike Dunks, once fetching $300 to $400 resales, now hovering around $70 to $80. Yet, brands like Asics, Hoka, New Balance, On, and Salomon are gaining traction. By filling the supply needs of indie stores inspired by pioneers like Round Two, OS Group has carved out a profitable corner in a competitive field. Plus, they're boosting emerging streetwear labels.
Austin Morris of Retrovert puts it best: 'OS Group put us in front of 1,000 retailers across the country when we were a lesser known name in streetwear. They’re a real partner who cares about the same things we do, like protecting our brand and building lasting demand. Working with them feels like having a thousand retail partners at your fingertips.' It's a win-win, giving small brands exposure without the grind.
With few major B2B resale players like OS Group around, competition is minimal – in fact, many small resellers have become clients or suppliers, creating a symbiotic ecosystem. In five short years, they've evolved from a basic resale outfit to a wholesale powerhouse. Looking ahead, Rachmansky envisions an even grander platform to help others scale their wholesaling efforts.
'I want to connect the brands and the resellers that we deal with directly with our retailers and do so in an ecosystem that’s tech first. Nobody’s really done this in the category yet. What I think we can do is organize our industry and turn ourselves into something like a B2B version of Farfetch. Once we build that, I think we can provide a ton of value, whether it be kind of like software service offerings, financing, or logistics.' Ambitious? Absolutely. But given OS Group's meteoric rise, it could herald the next chapter in sneaker reselling. Will this tech-forward revolution level the playing field for everyone, or create new barriers for smaller players? Is the resale market truly evolving toward sustainability, or are we ignoring the risks of another bubble?
What do you think? Do you see OS Group's approach as a clever evolution of the sneaker world, or a sign that the glory days of flipping are over? Could this lead to fairer opportunities for brands and shoppers, or might it stifle innovation? Share your opinions in the comments – let's discuss!
