By Ajhada Gabriel
In the words of a 2003 Steve Jobs, “there are sneakers that costs more than an Ipod”
With the recent economic catapult of the sneaker-reselling industry, Job’s 18-year-old jab at the essential fashion staple costing more than his Apple product—---one of the most in-demand technology brands of the past decade, couldn't be more true.
Sneaker reselling has transformed into a rather lucrative business and not just for high caliber brands and A-list celebrity endorsers, but for a large population of the common man: college-aged students and young adults.
In 2019 the United States sneaker resale market was estimated to be valued at $2 billion with the global market at $6 billion and it’s only going up from there.
Jacob Holtz, a senior at the University of Miami, managed to rake in six-figures after joining the sneaker reselling world in 2019, with his sneaker, vintage clothing and streetwear online boutique, Thrifitted.
And he’s just one guy.
“People’s ability to create a revenue stream for themselves by selling items that they enjoy, and people wanting to shop online, wanting to get involved, contributed to the rise across the industry,” said Collin Lee, a senior at the University of Miami and venture consultant at UM’s student entrepreneurship center, the Launch Pad.
“As the world is looking for more ways to financially monetize themselves. I think the rare valued shoes will continue to escalate there,” continued the entrepreneurship and marketing major.
Deeming sneaker-reselling as an art and even defining it, seems outlandish in itself, but it’s no secret that the industry has become more than walking into a store or placing an online order. It requires time, skill and tactics. It is indeed an art and there are millions of Pablo Picasso’s taking commissions.
The What, How and Why
Sneaker reselling is a complex business that can however, be summed up in four words: Buy low, sell high.
The main objective for a seller is to buy rare, scarce, or limited edition shoes and due to the demand of those pairs, sell them for more than the retail price.
Depending on how much a consumer is willing to pay, sellers can receive thousands to millions of dollars in revenue on just one pair of shoes. Prices can vary based on colorway, size, and demand.
Holtz divulged about once selling a vintage 1985 pair of Air Jordan 1’s for $2,000 dollars after buying it for what he described as “dirt cheap” at a yard sale.
“That’s been the most notable shoe that we sold,” Holtz said of the sale.
Though ten years ago it was more feasible to buy a sneaker for retail price on release, the sneaker reselling industry is now fueled by hypebeast culture, a phenomenon that spread over the last two decades, making resale a huge business.
The culture is defined by wanting what is popular and the satisfaction of being able to own something that is scarce and in limited quantity.
Popular sneaker brands release shoes in these minimal quantities creating rarity and fueling a demand. The reason this works among consumers is due to the spread of the aforementioned hypebeast culture and the infiltration of sneaker-wearing, lauding and appreciating in current society.
“From a marketing standpoint, they [sneaker companies] are creating the image of scarcity, '' said Ogden Toussaint, a marketing major at the University of Miami and student Adidas brand ambassador.
“So people know automatically okay, ‘you got to buy this before it sells out.’ People have that rush and drive to buy something that they feel is so exclusive and so rare before the prices go up.”
It was 1985 when NBA basketball legend and champion, Michael Jordan, released the first Air Jordan through his partnership with Nike, birthing the rise of sneaker culture.
Today, the Air Jordan remains a staple sneaker brand with silhouettes that are still as prominent or even more, as it was in its early days.
At the time of the brand launch, Jordan was a sight to see on the court both with his dazzling basketball moves and for rocking his own kicks. His brand became synonymous with the integrity of the game and of the player.
Every basketball fiend desired to sport the same shoe as their favorite player, whether it was to prove their loyalty, embody their moves, or just simply be trendy—-either way, it all contributed to manifesting the hype culture that we see today.
Currently, the sneaker industry is dominated with recreations and adaptations of the classic Jordan silhouettes, through influential artists and designers like rapper Travis Scott with his Cactus Jack collection, late Virgil Abloh with his “Off-White collection,” and many others.
Along with adding to the hype, these adaptations and collaborations encourage fresh ways to keep Jordan’s in demand besides it being nostalgic. Sometimes Jordan would even re-release an old colorway in limited stock creating further hype and demand.
This is not to say that sneaker hypebeast culture has not branched out beyond Jordan, in fact rapper and entrepreneur, Kanye West has an on-the-route-to-becoming-iconic brand of his own named Yeezy.
Currently one of the most sought after shoes on the market, Yeezy sneakers are a hot reseller and well on its way to becoming the Jordan of the late 2010s and early 2020s.
Nostalgic sneakers, and other celebrity endorsed or designed shoes are also dominating the market as of now.
Newbalances for example were brands once overlooked, but because it’s suddenly in demand, the prices went up for stock regarding it as a reselling target.
Nike SB dunk lows and dunk high as well as Pumas are also in this category, celebrities like Pharell, Travis Scott, Virgil Abloh, Jack Harlow are collaborating with these shoe companies and launching collections with a modern twist, reminiscent of their debut in the early 2000s.
A shoe could be just a shoe, but if a celebrity endorses it, hype is attached and as previously mentioned, shoe companies aid in the demand by releasing these collections in limited quantities and deeming them as rare.
“You have different shoe makers like Adidas and their Yeezy partnerships, everything about their Yeezy partnerships is meant to have high resale value,” said Lee.
“They are re-selling them in limited quantities, really the only way you can get them is by ordering them from third-party services.”
All in all, this is what the resale market feeds on, if there’s no hype, there’s no demand.
Holtz of Thriffited concurs that the industry is fueled by celebrity influence.
“It's definitely the celebrity culture in general, if you see your favorite celebrity wearing it, you’re going to want it,” said Holtz, owner of sneaker, vintage clothing and streetwear online boutique, Thrifitted.
“Fashion industry, it’s what’s hype that’s why it's called HypeBeast, it’s what people want, it’s what people are going to drive themselves to,” he continued.
In another regard, the rise in re-selling emerged in the advent of ecommerce sites like ebay in the late 90s and sneaker news’ forums like ISS, now NikeTalk. This platform and many others were staples for sneaker knowledge and for selling sneakers as well as nostalgic artifacts.
Nowadays, sneakers are a huge contributor to the demand for nostalgic pieces.
These sites contributed to the exponential growth of sneakerheads—one who collects and trade sneakers— now turned flippers and re-sellers.
With Holtz being one of them, the launch of his online sneaker and vintage wear boutique in 2019 stemmed from an organic love of shoes. He saw the opportunity to capitalize on his hobby, and took it.
“It was always a passion,” said Holtz “I was able to turn my passion into a hobby, then a hobby into a business, which is a good thing.”
“I started just before senior year of high school, around that age the only way I was making capitol was through a nine to five job, so I was working to build my capital through a nine to five job, only moving five pairs of shoes a month at that point, but it was the point of stacking and reinvesting into myself,” Holtz continued.
Modalities
Buy low, sell high is the bread and butter or reselling and with the popularity of shoe companies releasing shoes in limited quantities, the ability to do this is more feasible. However access to shoes has declined because the market is overwhelmed with sellers pursuing the same agenda.
For sellers sneaker purchasing modalities take disparate forms, one of them being camping outside of sneaker stores before a shoe release.
A little over a decade ago this was a common trend as a new pair of Jordans would come out every Saturday, coining the popular phrase “Jordans on Saturday” to exude something that is highly anticipated.
But the motive then was different, consumers camped out to be the first to have the hottest shoe obtainable. Now, the market is dominated by hungry sellers who onced utilize the tactic of camping out, to be the first to not only have the shoe, but also sell it.
This however, is phasing out across both groups and is rapidly being replaced by re-selling platforms like StockX, GOAT, Stadium Goods, social media marketplaces, Ebay, Grailed and Holtz’s favorites Offerup and Letgo.
These platforms serve as marketplaces where consumers and sellers can feasibly buy, sell, trade, place bids and ensure effective communication with buyers and sellers.
“The sellers can set a price but consumers can also set a bid. If you’re not willing to sell your shoe for what the consumer is willing to buy and vice versa,” Lee said. “Then nothing is going to happen, so the market is always going to equalize itself out, that’s why StockX is one of the leading platforms people do that on.
Holtz, who’s had his fair share of camping nights in his early days of flipping shoes, says in store purchasing for sneaker-reselling is nearly unethical in today‘s market.
“In store is ruined for sneaker-reselling because it's only one per person, that’s why majority stock goes online so you're seeing 20 to 30 thousand pairs online per release, per 100 sites, cause there's obviously so many different foot sites.”
He added that camping out no longer made sense for the growth of his business.
“There were times where I would bring other people so I can get more than one pair, cause it’s limited to one per person and we would camp almost 24 hours for one pair of shoes you know what I mean?'' Holtz said. “Now that I've grown more into the business, I understand that it's not worth it. Waiting 24 hrs, working 24hrs for a $50 profit.”
Holtz found it challenging to establish individuality and consistent clientele in a market that is so saturated but quickly learned that . Sellers who aren't utilizing social media to brand themselves will find it difficult to get a leg up in this industry.
“I think to prove yourself to the top, it’s social media, if you’re not using social media, you’re behind,” Holtz said.
For the young entrepreneur, Instagram, Facebook marketplace, sneaker reselling sites and sneaker fairs are where it's at as he can communicate with consumers directly.
“In general a lot of people are going to relate to stock X and GOAT as the top two market places because of the ease of access. But for me personally, to buy and sell trade, it’s still going to be the main social media, FB, INSTA, OFFER UP, Letgo,” Holtz said.
It doesn't stop here however, the latest in online re-selling in technology are online bots. They increase the chance of a reseller scoring a shoe on release, for retail price.
“These ‘bots’ would pretty much run the site for you, it’s like you but times 1000, or a million,” said Holtz, who has purchased bots in the past.
“You buy these bots which are priced in, and there’s a market for bots as well, so those prices will fluctuate for the bots depending on how well they do. If a bot does really well on a release, the price of that bot will go up, if it doesn't get that many shoes on release the bot price goes down,” Holtz continued.
According to Complex, there’s Nike bots, Adidas bots, Yeezy Supply Bots anda more. The price of a bot ranges from $500 to $20,000.
On the seller’s end, scoring sneakers for as low as possible is the general concern. But for consumers, it is the battle between legitimate and illegitimate. There are companies who make inauthentic replicas of popular shoes, sell them for cheap, and some dishonest re-sellers attempt to sell them for an inflated price.
According to Marketing major and Venture consultant Collin Lee, sites like Stock-X not only make sneaker selling and purchasing feasible but aid in developing consumer-seller trust through authentication measures.
“Stock X does a great job of letting the consumers lead what they are willing to pay for these shoes,” Lee said. “The biggest fear would be buying fake shoes, so the value that StockX has created is the verification of the shoes, the ability to do everything in one place, that’s kind of the value they’ve created for the consumers.”
Holtz, a Florida native from Port Saint Lucie, has constructed his LLC, Thrifitted from the ground up over the past three years.
From selling five pairs of shoes a month to having a consistent rotating inventory of over 500 pairs and daily sales. He built his capital through a minimum wage job and kept on buying, saving and re-investing, crediting his determination as well as the implications of Covid for granting him the time to build the brand.
“I was working to build my capital through a nine to five job, only moving five pairs of shoes a month at that point, but it was the point of stacking and reinvesting into myself, ” Holtz said.
“You can start off with a hundred dollars because that’s the retail price of a shoe. Most dunks resell for $100, they can re-sell anywhere from $200 to $300 depending on the color so that’s double your money right there, that’s 100 percent profit,” he continued.
“Last year we did over six figures in sales last year, profit wise if we just separate sneakers alone. Holtz said. It’s about 32 percent of return on investment, so about $30 for every $100 dollars that I spend.”
Holtz often buys over a 1000 pairs of shoes at once when purchasing
“We buyout collections, we’ve had collections that we’ve rotated through inventory that are worth well over $40,000.”
To keep control of his stock, Holtz stores his inventory at his home in Port Saint Lucie, his college apartment in Miami and in storage units.
Aside from hosting an online Instagram presence, bots and re-selling websites. Holtz continues to rack up his rotating Thrifitted inventory by attending weekly trade shows for shoes, both near and far.
At these shows, Holtz brings a team, with the aim of buying, selling, trading and networking. Using experience as his teacher, Holtz has achieved the goal of many resellers, the bread and butter: not purchasing a shoe for more than retail.
With all of this monetary success, Holtz says however he is more grateful for the networking he was able to carry out. He has had the opportunity of selling to big name celebrities including rappers Kodak Black and YG, as well as NFL places like Miami Dolphins’ wide receiver Albert Wilson.
He’s also made deals with astute businessmen from people who own Rolex chain companies to the creator of the windows for Hilton Hotels.
“Seeing over time how the growth to start from like five pairs of shoes in my closet, flipping my own little personal sneakers, to see the kind of inventory I have now, to see the people that I've worked with and sold to. I don't want to say mind-blowing because that’s an understatement but the growth is legitimately immaculate, it’s crazy, ” Holtz said.
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