You See Sneakers, These Guys See Hundreds Of Millions In Resale Profit

[skills]

mcsd31

I don't see the bubble bursting to the point that sought after past releases will be worth less than retail. But I think Nike will try to eliminate the surplus resellers eat off of in the future.

Pretty soon nike is just gonna cut the "middle man" out all together. They steady raising prices cause of what they see happening in the resell game.

I agree. The price increase plus the bundling of these 'packs' (Brazil 6 & cp3), (Pantones XI, XX9) will phase out some resellers. 160? vs 250 per shoe. And no holding cost from the CP3 & XX9. I'm not saying Nike will bundle every kick but I wouldn't be surprised if we see it more in the future.

 

[Brownstone]

Meh, certain shoes will always have appeal. But for the most part, the market is oversaturated. I mean come on, you guys see the garbage Nike releases every weekend? For every 5 pairs they drop, 1 looks decent.

And those ugly releases STILL sell out, everywhere. Sure there are certain J's that reach the clearance rack, but those sell out eventually too. Still for far more than they are worth. The market replaces itself, the smart collectors hold on to the gems of their era and sell it to the next generation of schmucks ready to give their checks to them. 

 

[Mr Dink]

My man I came across a pair of AJ I Retros Blk/Blue on eBay the other day and the asking price is $1k and change. The average re-sell pair is asking $450-$600. There are quite a few shoes that get up to this price now where as 10 years ago the only shoe that sniffed that 1k price range was the FLOM dunk. The Nike SB craze was insane and didn't have the aftermarket prices that we see today. When people say the bubble is going to burst it sounds a lot like wishful thinking instead of reality.

Like I said, a handful. Yes, Broyal/Bred 1s go for a lot, but Infrared 6s, Black Toe 14s, and many many many others can be had for 25 over retail, if that. For every shoe that dropped that resells for a lot, I would say 10 can be had for close to retail.

 

[superblytrife]

Of course the bubble is going to burst--it always does.

But I don't think it'll burst any time in the near future. 

One thing I don't think a lot of folks realize is that these kids who are buying $200 pairs every weekend aren't paying that out of pocket.  They're just selling off "old" stuff that isn't the newest wave, or that they couldn't resell, to fund the newest/latest purchase.  It's all one big cycle to be fly for IG, Twitter, NT, etc.  Look at eBay and see how many "worn 1x" pairs you see on there now--and a lot of them just dropped weeks ago.  

Thankfully I'm not really into a lot of the shoes that seem to by hyped.  I could give a damn about a LeBron, KD, Kobe or Jordan these days.  #teambelowretail  

 

[mcsd31]

@skills You trying to get me into this conversation? lol..ok...

The question of a sneaker bubble is very complicated because the sneaker market is not like an free market that we have seen burst - dot com, housing, US economy, etc. The sneaker market is not a free market at all. It is highly regulated by a biased third party - Nike (and to a lesser extent other brands) - who benefit directly from the existence of a secondary market. And these third party regulators have gotten very, very, very good at manipulating the secondary market and then leveraging it to benefit on the retail side

The 538 article which sparked this conversation was an excellent look at a complicated question. But if you really want to get into the details of this question, I suggest you read our full analysis on the subject - the deep dive into Nike's business model as it relates to the secondary market - which is actually the reason 538 did the article on us in the first place.

Also, as a quicker read, the article we need comparing sneakers to stocks and drugs will help further explain why the sneaker market doesn't have the same characteristics as markets with "bust"

All that said, if 60% of the sneaker collectors wake up tomorrow morning and say, "Why the hell do I have 300 pairs of sneakers. I'm selling my collection today." ...then we'll see a big market correction and the secondary market will collapse. But that has to be a mass, independent event, which is just not likely when you have Nike continuing to push its agenda, and you have consumer who are largely young and not sophisticated buyers.

But it sure is fun to examine...

 

[capital sb]

 
She's a stupid mom

Lol I told her she was tripping and was doing too much.

@mcsd31  Great post. I agree 100%

 

[thunderchunk69]

hype kicked in around eggplant to copper foams when NIKE killed MANY, MANY mom & pop accounts.

they now have more control now.
footco chain stores, boutiques, they all have to do what they say.

Nike built this market and the best they can do is restocks to take some profit from resellers, but at the end of the day, they created this monster and don't mind it.

 

[outlaw8413]

this ****'s a bubble. gonna be a lot of bag holders in the future.

I really hope that's true

 

[xilegacy]

The bubble is not popping anytime soon

 

[skills]

Nah, mcsd31 , I was saluting you for being on FiveThirtyEight, lol. Trying to break in that world of data myself... what are you using for visuals? Nice graphs in that post.

I'm going to have to give that blog post a read. I skimmed through it and agree, lots of good points were made. The way Nike handles varying demands of Jordans almost weekly is really admirable.

 

[poscogrubb]

FiveThirtyEight article and Luber got an episode in NPR's Planet Money podcast.



I think Campless is contributing a lot to sneakerhead culture & the game, so y'all @mcsd31  deserve this spotlight.

 

[rillo561]

dudes would camp out and wait in line for some $200 chancletas if they were limited and had a swoosh/jumpman logo

Or supreme

 

[picasso swerve]

I dont get it. Youre wasting all those days in line that you coudve been working and making money anyway. You'd need to scoop up a couple pairs to for it to even make sense.

 

[poscogrubb]

I've never camped for sneakers. Arrived early the morning of? Yes. But camp? No. The potential profit is not big enough to justify waiting in line that long.

If my kids end up being teenage sneakerheads, there's no way I'd let them camp for shoes. They would be productive and busy doing more meaningful things than waiting in line.

 

[mcsd31]

Nah, mcsd31 , I was saluting you for being on FiveThirtyEight, lol. Trying to break in that world of data myself... what are you using for visuals? Nice graphs in that post.

I'm going to have to give that blog post a read. I skimmed through it and agree, lots of good points were made. The way Nike handles varying demands of Jordans almost weekly is really admirable.

Thanks man...really appreciate that. Most graphs are just done in PPT, but sometimes we have our graphics guy do some cool stuff.

 

[mcsd31]

FiveThirtyEight article and Luber got an episode in NPR's Planet Money podcast.


I think Campless is contributing a lot to sneakerhead culture & the game, so y'all @mcsd31
 deserve this spotlight.

That is very, very nice of you to say. Thanks.

 

[mcsd31]

If anyone has a lot of experience collecting baseball cards and wants to help us with an in-depth analysis examining whether the sneaker market is in a bubble and if it will burst, email me at [email protected]