Nike singlehandedly created an artificial commodities market for sneakers by controlling supply and distribution. The secondary market for rare and limited-release sneakers is now estimated to be worth a cool $1.2 billion. A few years ago, Nike alone, including the Jordan brand, comprised 96% of the resell market. At that time, Adidas – which now comprises about 60% of the market – was only 1%.
So, what happened? In part, we can thank the launch of the Yeezy brand for offsetting Nike’s dominance of the market. But, something else happened that lost Nike its crown. Josh Luber, CEO of StockX, speculates that Nike’s problem is rooted in overproduction, which stems from a lagging production timeline (factoring in manufacturing time needed) that simply didn’t anticipate the arrival of the Yeezy line, along with other competitors. The more shoes that are released, the less cool the shoe is. Nike has since addressed the problem by managing the exclusivity of their styles and colorways. It’s supply and demand, my friend.
With so much going on in the industry, it’s actually an amazing time to be a sneakerhead. Key figures like Kanye West and Virgil Abloh, with his high-end streetwear brand Off-White, are setting trends in the industry. Every week, a new sneaker is released by one of the major brands. In our last article, we discussed the use of bots in copping the latest kicks, but now we turn our focus to the resale market, which is the vital backbone of the sneaker culture.
The Resale Market
Consider the fact that profit on the secondary market is about 33%. By limiting the number of sneakers that these companies release, they have effectively driven up demand for any particular shoe to an almost insane degree. People line up days in advance of a hot new drop. For most people, getting their hands on a new shoe is much more difficult (and expensive) than simply going into a store and picking them up at retail price. In most cases, the only option is to go to a reseller.
From a consumer standpoint, playing the market for sneakers is a time-consuming science involving precision of timing and careful analysis of the trends. Sneakers are an investment, and care should be taken to ensure you are making the best investment. Fortunately, there are plenty of online resources to help sneakerheads make these purchasing decisions.
Sneaker resale sites like StockX, GOAT, Stadium Goods, and Flight Club (a recent merger between GOAT and Flight Club promises to make for the world’s largest sneaker marketplace, though the two still operate as distinct brands) offer the tools needed to make an informed decision. StockX, for example, indexes the major brands by the amount sold in the past 24 hours and offers historical data for each shoe, including resale price by size, the total number of sales, and the price premium over the original retail price. Staying informed about the latest sneaker trends and keeping the pulse of the industry has never been easier.
Something to keep in mind about StockX: the site seems to be experiencing the issue of shoe boxes becoming damaged during shipping, or at least they did. I’m sure the company is taking measures to ensure the problem doesn’t persist. A damaged box can make reselling the shoes very difficult. It’s also a blight on a meticulous collector’s pristine shelf.
Smaller sites and online communities offer sneakerheads additional ways to buy and trade shoes. Forums like Retail Tuesday and Sole Collector offer an online marketplace for collectors to buy, sell, and trade. Subreddits like r/Sneakers, r/streetwear, r/Repsneakers, and r/sneakermarket provide users a place to interact and discuss sneaker collecting. Sneakerheads can also get their hands on rare kicks through sites like eBay, where global communities like Stadium Goods conduct drops. Be careful though; eBay is notorious for sneaker scams (more on this below). This is all evidence of a truly democratized market for sneakers, with transactions taking place on a myriad of venues.
Release Calendars and Industry News
Another important resource for sneakerheads is Sneaker News, a website that offers release date information and previews of upcoming projects. The site prides itself on its strong relationships with the major brands, bringing you inside access to product debuts and launches. Kicks On Fire is another good resource for release dates. They feature an app that you can download on your phone or mobile device to get the release calendar for the big brands.
The Downsides of an Unregulated Market
Although the market for sneakers is democratized, and that’s a decidedly positive thing, there are issues that arise when such a market is unregulated. There’s a dark side to the sneaker culture that needs to be addressed. We hear stories of teens being robbed or even murdered over a pair of shoes. Counterfeits, or fakes, run rampant. Getting scammed is a possibility. Being able to identify fakes is a skill worth acquiring, even though the major resale sites, like StockX, authenticate the products prior to shipping.
According to Antonio Linares, known as @fake_education to his 600,000 Instagram followers, spotting a fake comes down to examining the craftsmanship of the product. Checking things like the stitching quality and font styles on the inside size tags and on the boxes are keys to identifying fakes. There are plenty of online guides to spotting fakes, as well as YouTube channels devoted to the topic. The art of spotting fakes has launched entire careers for people like Yeezy Busta, a 19-year-old medical student from Los Angeles, who runs an Instagram account that “busts” celebrities and average consumers for wearing counterfeits.
Despite these negative aspects of the industry, the overall story of sneaker culture is a positive one that has united people of all ages and backgrounds. Sneakerhead passion is palpable. Just visit any of the abovementioned online forums to get a sense of people’s excitement and dedication. One of the main positive characteristics of sneaker culture is that, because of its democratization and lack of regulation, young people can participate and learn various aspects of a business that normally wouldn’t be open to them until years down the line.
Being a sneakerhead means educating yourself about an industry that is booming. It means learning salesmanship and saving, profit maximization and negotiation skills, digital marketing and economics. It’s more than that, even; being a sneakerhead means becoming immersed in a culture that is open and accepting, provided you know your stuff. The culture respects integrity and know-how. Anyone can be a sneakerhead, regardless of age, gender, race, sexual orientation, or background. You just need to be passionate about sneakers. Being a sneakerhead is, in a word, a lifestyle.
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