I’m currently working on a project for work that analyzes the sneaker resell market. After a couple of months of research, I realized that it’s a “jungle” of an industry. In the last year, the sneaker resell market topped over $1 billion in transactions (which is only a tiny fraction of the $55 billion global sneaker market). eBay is the biggest organized market and brokers about 25% of sneaker transactions, leaving the remaining 75% a fragmented mess scattered across social media, forums, Craigslist, and word of mouth channels. One of the biggest learnings for me was that the 96% of the sneakers found on the secondary market are Nikes. This ultimately sparked some curiosity on why Nike was leaving so much money on the table.
High Snobiety and Campless teamed up for a pretty insightful editorial on this dilemma and discusses why Nike SHOULD NOT try to capitalize on the inflated prices of its shoes. Check out the full article here.
“The secondary market Nike has built for itself is a strange one, and very similar to the trade in illegal drugs in many ways. Supply is highly limited and controlled by one agent – in this case Nike, but Latin America’s cocaine cartels do much the same – and at the other end of the market there are no barriers for entry. Like your local dealer, no overheads or qualifications are required for budding resellers to enter the market; just purchase some stock, line up a few potential customers and you’re in business. And much like the trade in narcotics, prices for deadstock kicks are not officially set and people will go to extraordinary lengths to feed their purchasing addiction.”