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Is sneaker resale dying? According to OS Group founder Oscar Rachmansky, the secondary athletic footwear market isn’t floundering, it’s merely evolving.
Rather than the typical approach of scoring and selling limited-edition sneakers one pair at a time, Rachmansky’s business model focuses on bulk — supplying independent retailers across the U.S. with in-demand product.
Since founding OS Group in 2019, Rachmansky and his partners have scaled the business-to-business company from $1 million in revenue in 2020 to a projected $50 million by the end of 2025. By carefully curating both its clients and vendors, OS Group has filled a key void in the industry, sourcing bulk product for smaller stores and growing at unprecedented rates.
“I started as a sneaker reseller growing up in New York, literally 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, 23, told FN.
When he arrived at college, the OS Group founder maintained business as a small side hustle. Then came the Covid-19 pandemic. The resulting shutdown sent Rachmansky back home, where he noticed the sneaker and streetwear resale markets were surging like never before. Peer-to-peer marketplaces like GOAT and StockX were thriving, as were more traditional resale operations such as Flight Club and Stadium Goods. In a ’20 report, Cowen Equity Research estimated that the sneaker resale market could reach $30 billion by 2030. More and more resellers were getting into the business, which spelled a growing demand for wholesale product.
Rachmansky went all-in on what set his company apart, building a B2B model designed to service the growing amount of independent stores that were popping up seemingly overnight.
“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 says.
By working directly with other resellers and boutiques who are sitting on excess stock, OS Group brokers wholesale buyouts to procure its bulk inventory. Footwear is procured from an international network of over 800 sellers across 30 to 40 countries by Rachmansky’s team, which has grown from a one-man operation to 25 employees.
And to find its trendy streetwear and accessories, OS Group purchases directly from brands such as Birth of a Royal Child, Jason Markk, Retrovert and Onyx Apparel.
“We help brands get distribution into these storefronts across the country,” says Rachmansky. “If you want to get into all 50 states, what better way than by being in a bunch of stores?”
One such store that’s benefited from OS Group’s unique model is A Sneaker City, a multi-door resale chain with locations in Florida, Illinois, Massachusetts, New Jersey, New York, North Carolina and Texas.
“When I first started working with OS Group in 2020, I was operating a single location in Albany, New York,” A Sneaker City founder Brandon Gutierrez tells FN. “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.”
OS Group’s clients are broken up into roughly 70 percent small independent resale shops with the remaining 30 percent being larger marketplace partners including StockX, GOAT, Stadium Goods, Shein, Walmart and TikTok Shop.
While OS Group’s atypical approach has proved fruitful, profits from traditional sneaker resale have slowed in the years since the pandemic. With more product releases than ever and increasingly selective consumers, there are far fewer opportunities for $1,000-plus flips from weekly shoe releases. There’s an overwhelming feeling among industry leaders and everyday consumers alike that the resale market is in an overall downturn.
According to its 2024 “Big Facts” report, StockX reported that only 47 percent of sneaker releases sold above their retail price, down from 58 percent in ’20. Although they didn’t specify numbers, executives from competitor GOAT Group confirmed that profit margins for sellers had been on a recent decline. And Stadium Goods, with its once-booming NYC store on Howard Street, in January consolidated its retail operations and pivoted to a focus on digital sales.
These market fluctuations have affected everyone in the space, including OS Group. Rachmansky says its sales trends mirror other marketplaces with sneakers such as Air Jordan 1s and Nike Dunks, which once regularly resold for $300 to $400 and are now priced more in the $70 to $80 range. But while prices of those pairs have waned, other brands like Asics, Hoka, New Balance, On and Salomon are on the upswing.
By offering a solution to the throngs of independent resale stores that followed in the footsteps of buy-and-sell pioneers like Round Two, OS Group has been able to carve a lucrative niche in an otherwise crowded space. And not only is Rachmansky’s business allowing small operations to thrive by supplying in-demand product, it’s also helping startup streetwear labels get new eyes on their product.
“OS Group put us in front of 1,000 retailers across the country when we were a lesser known name in streetwear,” Austin Morris, owner of streetwear brand Retrovert, tells FN. “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.”
Because there are a limited number of large B2B resale businesses like OS Group, Rachmansky says the company has little to no competition. In fact, many smaller resellers have become clients and suppliers for the fast-growing business.
With such rapid growth in just five years, OS Group has transformed from a traditional sneaker resale business to a B2B wholesale supplier. Next, Rachmansky hopes to build on this success and establish a wider platform that will allow others to scale their own wholesale operations, just as OS Group has done.
“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.”
It’s an ambitious goal, but judging OS Group’s rapid rise, it could very well represent the next evolution of sneaker reselling.
