What does a ticket scalper do when concerts dry up? Enter the sneaker market. Interest in rare sneakers as an investment has catapulted since pandemic lockdowns began. Why it matters: Like the Robinhood effect on stock trading, sneaker apps gamified and streamlined buying, while social media added community. Sneaker trading has long been lucrative, but the pandemic brought more people — with more idle time — into the game. - “We’re seeing more and more customers that are thinking about sneakers as an alternative asset class,” says Greg Schwartz, co-founder and COO of sneaker resale platform StockX.
Professional sellers can make a living trading sneakers, Schwartz adds. Eye-popping stat: The sneaker resale market is now worth an estimated $10 Billion research firm Piper Sandler reports. - That’s up from $6 billion in 2019, according to a Cowan report, which included a growth projection for the market to reach $30 Billion by 2030.
Case in point: StockX’s valuation jumped to $3.8 Billion in its financing round last month, up 35% from four months prior. - The pandemic reasons for the interest in the sneaker trade are numerous: People were bored, needed to make extra money, had lost their jobs or side hustles — and just love sneakers.
The big picture: The sneaker market runs on hype, and FOMO when it comes to coveted limited editions, like retro Jordan’s or Yeezys, says Mike Sykes, writer of the Kicks you wear blog. - Collaborations with athletes and celebrities generate the most buzz – and sometimes, inflated sales prices.
- More common trades involve typical Nike limited editions, which sell via lottery for £100-£150 in the retail drop and then rake in 2x-3x in the secondary. It’s a nice profit, but as with concert tickets, you need scale to make real money (enter the bots).
How it works: A company like Nike drops limited releases on its SNKRS app or through local shops. These are highly sought-after moments where fans queue for the lottery and post on social media about doing it. - Most who want to buy, don’t get to — and again turn to social to lament the loss.
- The shoes typically then show up on platforms like StockX, GOAT, Farfetch or eBay immediately after — and even before, if some pairs leaked, said Sykes.
The bottom line: Wannabe buyers can sit on apps for hours a day, and monitor social media announcements, trying to win just one pair. What’s next: Sneaker NFT’s, Obviously. |
