The Sneaker Reselling Market
As a student studying Economics, I am engrossed by the subject where I hope the subject can positively change my decision making along with helping me become a more knowledgeable member of society. Personally, I am intrigued by stocks and markets, technology and entrepreneurship. However, I never thought about what introduced me into the concept of markets and stocks.
What started this interest?
A passion of mine is fashion; I consider myself to be an aficionado in the fashion world. Little did I know, this would act as a catalyst into making me fascinated with the global market and Economics. As someone who loves fashion, I also consider myself as a sneakerhead. A sneakerhead is someone who enjoys collecting, trading, selling shoes or is generally intrigued by shoes.
A little after I joined the trend where collecting and wearing expensive shoes became popular. I saw my friend trading/reselling shoes on an online marketplace platform for a higher price. He told me that he made £1000 from selling the shoe he bought for £150 for around £1150. I was interested in this so I did some research into the sneaker market. I found out people were buying shoes from limited releases and inflating the price significantly.
Sneaker Reselling
As mentioned before, sneaker reselling is the act of buying a limited and popular shoe and selling it again to other people for a price mark-up. The global sneaker resale market is estimated to be worth around $6 billion by the end of 2025 (Cowen & Co).
You may think, why are people even considering paying a couple hundreds pounds just to have a shoe. But it all links back to the basic concept of supply and demand. The low supply of the shoe makes the stock extremely limited and low. However, the demand of these shoes, elevated by social influencers and celebrities, escalates the demand for these shoes. This has lead to reselling platforms such as StockX and Goat where you are able to sell your shoes depending on the general price it is sold for.
StockX — A gamechanger in the sneaker market.
- StockX is mainly used to buy and sell shoes, clothes and has even expanded into luxury handbags and watches.
- The company acts as a middleman between the buyers and sellers in order to ensure safe transactions and to prevent scamming
- StockX also provides data such as the current market value: how much the items are being bought and sold for and how many of the item has been sold.
- It also shows useful data showing the profit percentage of the shoe along with the potential loss of gain from buying/selling the shoe. This can help the consumer assess the situation and make the right decision e.g. if the seller was not sure if he was overselling or underselling.
What I like about StockX is that it manages to bring the concept of a stock market into my hobby of collecting shoes. The website can be used to even predict values of shoes that will be released in the future where you can look at prices for previously released shoes . What makes StockX different from your average e-commerce website such as eBay, is that by posting a specific price for your shoe, you notify the rest of the world that this is the general price you are willing to sell the shoe for, hence influencing the market of that exact shoe.
There are some concerns about sneaker reselling, especially ethically. People who exploit and take advantage of the basic economic concept of supply and demand in order to make money for themselves. However, are they the ones to blame? The fault may lie with sneaker manufacturers such as Nike or Adidas. who deliberately lower stock, in order to create hype and publicity for the product.
Furthermore, products in the sneaker market are over-the-counter. This can be a problem because the buyer will never know the true market price where the price of the item is mainly determined approximately by how popular the shoe is.
