Like many 16-year-olds, Chase Reed spends his days tied to his iPhone and Instagram account. But you won't catch his dad, Troy Reed, bugging him to get off social media anytime soon. That's because with each "like" the teenager acquires online, the father and son are seeing big dollars. The father and son have opened a pawnshop exclusively devoted to sneakers. Sneaker Pawn USA is based in an apartment in New York's Harlem where the two used to live and have converted into sneaker start-up central. The duo advertise on social media platforms and share their inventory. Sneakers fans from around the world visit their Harlem shop, and shoes can be purchased online. Chase works along side his father to buy, trade and sell Air Jordans and other brands in the store, which opened in June. Troy says his son—still in high school—runs the show. "I actually work for him, and it's probably the best job I've ever had," said Troy, himself a serial entrepreneur. His past ventures included barber shop.
He now works full-time at the sneaker pawn shop. Turning a $30,000 inventory into a start-up The pair got the idea for the business when Chase was 14. Troy, who is divorced, admits he indulged his son and allowed him to amass a basketball sneaker collection worth about $30,000. Troy then persuaded his son to sell the shoes to generate the cash for a physical store. "It was hard to let go of the collection because I was 14 years old with 200 pairs of sneakers, and all of the sudden you have to go back to zero," Chase said. "But it was just part of becoming a young man and an entrepreneur." In 2013, they sold Chase's shoes right out of the trunk of Troy's car on 125th Street. But as word spread, they quickly realized they were onto a big trend. Mom-and-pop pawn shops are ubiquitous, but few if any are devoted to sneakers. The duo now have hundreds of pairs of sneakers in the store. Read MoreYoung entrepreneur 'gloves' his way to $8 million mark The basketball sneaker market is booming.
Market research firm Janney Capital Markets reports basketball footwear sales hit $4.2 billion in 2014 in the U.S., citing data from SportScan, a consumer insights firm. Janney forecasts sales will increase 12 percent to $4.7 billion in 2015. Once considered a fringe urban shoe trend, collecting basketball shoes reached a broader audience when Nike released its Air Jordan I in 1984. The shoe was launched by Michael Jordan. Troy said the markup on previously owned sneakers can be anywhere from 100 percent to 800 percent given consumer demand. For example, Nike's LeBron James "Crown Jewel" sneaker originally retailed for $250. But they're selling the pair for more than $1,200 at Sneaker Pawn USA because of its limited edition status. "This is the new stock market—these sneakers are commodities," Troy said. Troy and Chase won't disclose how much cash they're bringing in per month, but say they hope to attract a private investor in the next year to help them keep up with demand and expand into locations across the country.
In just six months of being open, they say they're profitable. I'm a businessman now' This year Chase is teaming up with a shoe manufacturing company, Relevant Customs in Mount Vernon, New York, and plans to release a high-end line of shoes. Styles will feature exotic leathers with price tags of $10,000 and higher. As for Chase's own private sneaker collection, it stands at around 50 pairs today. He has learned the art of looking cool, letting go and making money—all before his 18th birthday. "If I get a nice shoe in the store, I'll end up selling it rather than collecting it," Chase said. "I'm a businessman now." Read MoreMain Street reaches for a comeback —CNBC's Betsy Cline contributed to this report.Sneaker Pawn UsaPawn shopLocated In New York, New YorkPhoto contributed by Stephan Antonio OrtizShopping & retailHomeMailFlickrTumblrNewsSportsFinanceCelebrityAnswersGroupsMobileYahooSearchSkip to NavigationSkip to Main ContentSkip to Related Content0Mail•January 15, 2015PHOTO: AP Photo/Seth WenigNEW YORK (AP) — A 16-year-old sneaker-loving teen is using the footwear to get a different kind of kick — he’s opened a pawnshop that uses high-end athletic shoes as collateral.
Chase Reed and his father, Troy Reed, opened Sneaker Pawn on Lenox Avenue in Harlem looking to capitalize on America’s multibillion-dollar athletic footwear market and the high prices sneakers can get being re-sold.STORY: Teen’s Inspiring Response to Pal Who Came Out via TextThe idea started close to home, when Chase would ask his father to borrow money after Reed had spent a few hundred dollars on sneakers for his son. Reed would hold onto a pair of his son’s shoes until he had gotten his money back."My son said, ‘Dad, you’re actually kind of making me pawn you my sneakers,’" Reed said during a recent interview at the store. "Once he said that, a light bulb went off."He told his son, “You don’t have no money, but you got all these sneakers. Imagine how many other kids got all these sneakers and probably need cash.”The duo decided to renovate the space in Harlem, where they had been living before moving elsewhere, into a retail location. And to pay for it all, Chase sold his own collection, bringing in about $30,000.STORY: Anonymous Teen Uses Twitter for Good"My father told me, certain things you have to sacrifice," Chase said.
Basketball sneakers can sell and re-sell for hundreds of dollars, depending on the shoe model, how limited the production run was, and how easy it is to find a pair in good condition. Sneaker Pawn carries shoes with price tags of more than $1,000.The shop, which opened about six months ago, offers different options. People looking to just unload their sneakers — specifically basketball shoes — can offer them to the Reeds to be bought outright, or on a consignment agreement which nets the Reeds 20 percent of the final sale price. Those looking to pawn their sneakers have two months to redeem them for the amount of money the Reeds forwarded them plus a storage fee. Shoes that are being pawned are held in storage and not displayed, until the owner either gets them back or gives them up.Chase, as the sneaker aficionado, has the final say on whether they buy a certain pair from someone, and what prices they sell the shoes at. He also customizes sneakers with his own art. Since he’s still in high school, his father handles the running of the store during the weekdays.