Behind the scenes of reselling in the sneaker industry
You have probably heard of someone buying a limited edition pair of sneakers at retail price, and then they sell them at higher markup to another person. That is called ‘reselling’ and the person who does it is called a ‘reseller’. Nowadays, we don’t only seek out individual resellers of sneakers, but we now visit websites that are dedicated to reselling sneakers. This trend started in the early 2000’s when resellers decided to use the novelty of the internet to their advantage. Forums, such as “Nike Talk”, became a place for resellers.
Currently, almost everyone goes online and visits reseller sites to buy high-end sneakers, regardless of the markup price. Cowen, an investment firm, has estimated that the global resell of sneakers was valued at $6 billion dollars in 2019. The most famous website StockX, a sneaker reseller website, is currently worth $3.8 billion dollars.
This is a solid indicator that the reselling of high-end and desirable sneakers is rising sharply. A prime example of this is the Yeezy Boost 350V2 Pirate Black from Adidas. Around 310,000 pairs of Yeezy 350V2’s were traded in 2019. It was the most traded sneaker in StockX’s history. The original retail price for Yeezy 350 V2 was $220 dollars; the highest resell price is at $800 dollars.
Jordan 1 Dior
Another example that we can highlight is the Jordan 1 Retro High Dior. Due to its high-quality materials and premium leather, and a limited production of 8,500 pairs, this was a perfect recipe to major resell price surge of 400% of its original retail price of $2,200 dollars. Currently, the average resell price of the Air Jordan 1 Retro High Dior is $11,333 dollars.
However, the question you may ask is: ‘What drives up the resell value of sneakers?’ The first thing to factor in is popularity. When a newly-released sneaker is highly sought after (e.g Yeezy 350 V2), people are more eager to get their hands on a new pair. This is fueled by hype and heavily influenced by celebrities wearing them. Since celebrities have a huge following on their social media accounts, the demand for such sneaker goes through the roof because their fans also want to wear them, too!
Secondly, high-end sneakers usually are released in limited qualities. This means that the supply and availability is scarce, especially if it’s released in select stores
or through a raffle system. When people fail to get their new pair upon the release date, people will find resellers and are willingly to pay more for it. In basic economics, when the supply is low and demand is high, the price of a product will go up. That is exactly what happens in the world of sneaker reselling. Of course, not all sneakers have a high resell value.
Have you ever tried to buy the first original pair of Yeezy’s 2016? Have you noticed that the resell price is a lot higher than the recent released models? Older sneaker models tend to retain their value and have higher resell prices. This happens when rare sneakers with high profile collaborations are released; for example, the Louis Vuitton Kanye West x Louis Vuitton. Its original price, when released, was $1,140 dollars and now has a current value of $30,000 dollars.
What is your foot size? The bigger your foot, the more it will cost you. However, that isn’t always the case. For instance, sneakers that come in rare sizes are the ones that have the highest resell value. For men, sizes 16 and 4.5 often tend to sell at two times greater than the retail price. While for female sizes, 10.5 and 11.5 tend to sell at 1.5 time greater than original retail price. Overall, the most popular sneaker sizes are 9, 9.5, 10 and 10.5.
The sneaker resell industry is projected to keep growing and there isn’t any sign of slowing down in the future. As more rare high-end sneakers are set to be released in the years to come, and if people want them, the demand will be great while exclusivity and access will be scarce. We will continue to see the world of sneaker reselling do its thing.