Sneakers resell madness
The resell :a real job?
Making a living selling "simple" sneakers?
Key players in the growing community of the sneakerscommunity, resellers are increasingly active in a period where the sneaker has never seemed so popular. In addition to this new notoriety, the persistent thought that these resellers are responsible for many of the plagues of the medium: shortage of products or sometimes exorbitant prices that are practiced at the resale. Can we blame them for everything?
Where to start...
It is clearly not with your last pair of sneakers or even with your best pair of luxury shoes that the market of the " resell "is ready to open its doors to you.
The reseller's job is becoming more and more popular among a community of young entrepreneurs ready to do anything to make themselves known. Indeed, to obtain these pairs of sneakers, each one rarer than the other, they do not hesitate to use all possible means such as registering on a draw list called " raffle "download all sorts of applications or wait in line for several hours to get to the hours hoping to be among the first to arrive.
After surviving all this, there are several sales strategies: some buy in large quantities and resell instantly while others wait for the pair to get bigger and bigger. rare on the market keeping them intact and new while they increase in value and sell them at a much higher price.
The goose that lays the golden eggs
All this seems absurd? Here's the good news: you don't have to be a sneakerhead to succeed in the marketplace. "Today, sneakers are considered a commodity in their own right", says Ron Raichura, founder of Crep City.
For the most discerning collectors, the resale of sneakers is a real career in itself - and it pays well. "You can make a living selling sneakers"says Jasmin Miller, spokesperson for the shoe resale association GOAT. "In 2017, our top sellers each sold over $2 million worth of sneakers. By the end of 2018, those same sellers had each sold more than $10 million in total. There is a very large market continually looking to buy these objects of desire that are sneakers, and this one is only growing".
"There are at least a handful of shoes throughout the year that immediately sell for 5 to 10 times the value of the so-called "retail" purchase price, and many more that sell 3 to 5 times more expensive. These are usually the ones that many people attend "raffles" for or camp out for the entire weekend sometimes. But if you get your hands on it, it's like winning the lottery".
The tips from a reselling pro
Sam Kersh, aka @sneakersocialite, is one of the sneaker resellers most popular on Instagram, with over 150,000 followers: so his advice is worth listening to. "Rare sneakers can be found in all sorts of ways: at widespread releases, from retailers, industry suppliers, events and so on." he says. As for how he makes his living, it's all about using the tools already at your disposal:"I mostly use Instagram, eBay and Facebook groups to sell my items " he says.
A continuously expanding market ...
It has now been just over a year since Cowen Equity Research ranked the sneaker market as an emerging alternative asset class. Since then, these surreal consumer products have made a real place for themselves in the minds of passionate consumers of all ages. multi-scalar consumers, but the market itself has become a player in the the global economy. Analysts at Cowen Equity research estimate that it could reach $30 billion by 2030.
In 2019, the total global sneaker market was estimated to be $100 billion. The speculative resell market market alone has an estimated total of $21 billion, or more than 25% of the global sneaker sales market!
A breakdown inperiod of crisis?
Covid-19:An exponential market even in times of crisis ...
John Kernan, an analyst at Cowen, told Yahoo Finance that the resale market for sneakers accelerated during the pandemic COVID-19.
"I think that the sneakerheads became more involved as COVID-19 grew" he said. "There are new customers. They are acquiring new consumers. That's a big first. I think when you talk about market value pricing, it's not just a trend. The "trends" strictly speaking are being affordable and even good cheap or focused on generalized trends. They cannot be contained within a category of items sometimes costing up to several thousand dollars: c's a way of life."
2020 : The emergence of new markets
The resale of sneakers creates new markets and services including online markets and e-commerce platforms such as StockX StockX : founded only 3 years ago by two sneaker enthusiasts, this application is the incarnation of the stock market within the speculative world of sneakers. They recently announced a major turning point marking the beginning of a new page: indeed, the company has just been valued at over d'1 billion dollars following a fundraising of 110 million dollars subsidized by 3 large "capital development" companies. This impressive growth should continue in the years to come. At least, this is what the new management of the company wants. Indeed, it is none other than the ex-CEO of E-bay : Scott Cutler who has just taken over the chains of management and deploys his ambition "to expand the reach of the platform and expand its offer to more users in order to get access to an authentic, transparent and anonymous market".
The principle of supply and demand
An example of this transition is the upcoming release of the Nike SB Dunk Low Grateful Dead adorned with the famous dancing bears and psychedelic colors of the legendary rock band. These kinds of exclusive releases called "Drop" are released in quantities limited quantities, so they are certainly not the most profitable for Nike directly. However, they keep the excitement of the brand at an all time high: this is what we call "Hype".
"Their biggest challenge is to control supply and demand. If a product is ever too accessible and you over-produce the market, the resell and the whole sneakerheads no longer consider the release in question with the same attention.
A business that benefits everyone
Added value for the biggest sneaker brands:
It turned out that the scale of many brands have benefited from this new market that is the resellbut how?
An annual report has been made over the last 5 years concerning the correlation between the resell and the so-called "primary" market of sneaker sales. Thus, the observation is such that (especially with the big heads of the market that are Nike and Adidas), the latter have experienced a progressive and almost exponential expansion of their brand both in terms of notoriety and money.
Thus, with its memorable Comma, Nike has known an increase of more than 50% of its turnover over the last 5 years. Through these numerous collaborations and events organized, the sneaker giant has been able to impose itself to the benefit of this new market that is the "resell".
The brand with the three stripes does not fail to the rule: after many years in financial decline, Adidas has managed to completely reinvent itself thanks to its collaboration with the American rapper Kanye West and his famous "Yeezy" declined in many colors, now known by all. In this, since 2015, Adidas has given us a new face, forged on the basis of this emerging generation.
A new format:e-commerce
A new source of profitability for the entire sneaker market
The conversion to an online sales format is a source of prosperity for both the resell and primary markets. Many analysts believe that Nike, Adidas and others will generate faster growth as units are sold directly on their e-tailer platforms. As a result, this type of format could represent 31% of the swoosh brand's sales by the year 2024 and up to 54% by the year 2034.
While this sometimes seems like a race between the big two of Nike and Adidas, the market shows that other brands can also make their mark. Kernan says that the brand New Balance is starting to gain value from this wave of excitement: which shows that sneakerheads are responding to the growing speculation about the return of some brands and collaborations that were originally not assigned to this market.
"The online shopping format is also making its way into the sneaker world and could account for more than half of total sales within 15 years.
Art and sneakers
Art at the service of sneakers and streetwear
The simple pair of sneakers has come a long way. In the last century of its history, it has gone from a pair of shoes suitable for running on the school stadium track to an object of art beyond all expectations. However, one thing is remained the same: sneakers have always been about hype and there is no better way to generate hype than to get a great artist behind your brand.
For example, the adidas Superstar would not be the legendary shoe that it is today without the mythical band Run DMC having themselves titled one of their single " My Superstar "as a tribute to her.
Today, thanks to this expansion, there is an incredible number of collaborations between great artists and sneaker and streetwear brands. In the musical world, we remember the collaboration between the American rapper Travis Scott and the brand with the swoosh or the sculptor and graphic designer Kaws who has been associated with the Air Jordan subsidiary for many years. Finally, we can mention more recently the collaboration of the eccentric Japanese genius Takashi Murakami and the well-known New York brand Supreme in the fight against Covid-19 through the release of an exclusive T-shirt.
A continuous evolution:the benefit of a new turn
The tenfold growth of a market that leaves many dreaming...
Kernan points to an expanded consumer base and a well-managed offering as some of the catalysts for growth in the sneaker industry and the market for " resell ».
"The number of sneakerheads continues to grow: There are many more at this time of year than there were last year"he said.
"New customers are coming into the market every day. Thanks to this new marketing analysis, brands have figured it out: an ever limited supply, in the face of growing demand, leads to an increase in the desire for scarcity, which in turn leads to speculation in market prices called: "Resell”"
Article written by Solal Fima.