Are sneakers like stocks? Can you actually buy low and sell high? Popular media and resell platforms like StockX would have you believe that you can apply the same rules from Wall Street to the secondary market. So I decided to see if that was possible. Here’s my journey.
From buyer to Buyer
Before I started my journey, it would be essential to set expectations. I don’t have a bot, nor do I want to spend an enormous amount of time trying to cop a day one drop. So that means I would have to make my money after the initial resell day. This will run counter to most stories you see on the web. Everyone loves to highlight day one resell. When a shoe is released on Saturday for $220 and sold for $1200 the next day. But that type of success doesn’t work for everyone. Day one resell is like cashing in on an IPO(initial public offering). I would have to make my money the traditional way – buying low and selling high.
Go Big or Go Home
If sneakers are like stocks, then the Yeezy 350 Boost would be a smart place to start. It’s one of the most popular shoes on the market with enough product and time to see trends. I decided to focus my initial research on the ‘Zebra’ version of the Yeezy 350 because it’s a popular colorway. And the shoe has restocked multiple times in the market. Looking at the data, I could see the high initial sale price at around $1500. Everyone gets hype about day one resell, but we never talk about the day two drop off.
Researching lowest sale date, November 16th, 2018, confirmed that restocks can drastically drive down the price of a shoe. Now $220 to $1500 is excellent, but since I can’t make that flip, could money still be made? The answer is yes. If I had bought a pair online during the news of the restock for $280 and held, I could have sold them for $402 on April 7th. A profit of $122. So popular shoes, drop dramatically during restocks. But what about rare kicks that don’t have a restock? I decided my next stop would be to research the ‘core black’ Yeezys.
A limited supply, means less of a dramatic day one drop in price. What did affect the price however, was the release of newer, limited sneakers. When the core blacks had their lowest sale date, it was due to the release of the Union LA Jordan 1s and Rookie of The Year Jordan 1s dropping the same week. So in one way, sneakers behave somewhat like stocks. Their price can be negatively affected by the news of the day. Restocks and new rare releases can make a shoe drop in value. But where sneakers differ is a market price – which would become the damming piece of evidence to halt my journey.
Smoke and Mirrors
StockX likes to promote itself as the stock market for things. But the one thing a stock market has is a market price. For example, If I wanted to buy or sell a stock of Apple, I only have to look at the market for the price. It doesn’t matter if I buy the stock through Robinhood or Merrill Lynch. If the price is $80 a share, I’m paying $80. This is what gives stocks their power and the ability to play with the market because you have a base value to work with. Sneakers, on the other hand, lack this vital feature.
You know the graphs I’ve been using? Well, they are just trends, when a shoe sold and for how much. StockX is not helping to set an actual market price but just giving me some sale data in a nice graph. The ticker symbols are just accoutrements. So it looks like a stock market without actually behaving like one. Using our previous example, that’s like me going to buy some Apple stock and Robinhood saying the value is $80 and Merrill Lynch saying its $800. And that’s not even including the size of the shoe! A size nine could go for less than a size eleven, even though they’re the same damn shoe. Without a standard number, the values begin to shift, and for someone who is a conservative investor like myself, it is a red flag. Not only is there no standard price, but the fees for ‘trading’ on StockX is wild. 12.5% of your sale is going for fees, which adds up quickly over time.
And this is where my journey stopped. High fees and too many variables were enough to let me know it wasn’t worth the time. The short answer is that sneakers, while fun to wear and talk about are not worth the time as a serious hustle unless you can get a day one resell.