The surprising increase in aftermarket sneaker sales during the pandemic
By: Christopher Claxton
Hyped up sneakers are now for everyone and not just those who are in the now. A few years ago you pretty much needed to eat, sleep, and breathe sneaker knowledge to get a pair of highly coveted sneakers; but, due to the growth of the internet and sneaker culture, it’s much easier to gain access to the most popular sneaker releases of the month, which are very likely to resell for much higher prices.
Sneaker collecting is growing in commonality resulting in a robust resell market. Right about now you’re wondering “What is Sneaker Reselling?” It’s a global market to resell new high-demand sneakers for more than what you paid. It’s a market valued at $2 billion and projected to hit $6 billion by 2025, according to Cohen & Co, an independent-minded investment bank.
Starting back in March, sneakers stores across the globe began to shut down. The COVID-19 Pandemic hindered sneaker stores from remaining open and in return halted in-person sneaker sales.
Nike lost around $790 million, a 38 percent drop in revenue due to store closures. The closing of retail stores had little to no effect on the sneaker resell market, “While Nike stores were closed, online sales increased by 75 percent” (Sawyer).
Major brands like Nike have been releasing sneakers online day by day, continuing to put products in the hands of resellers.
Sneakerheads, (a term used to describe sneaker enthusiasts) mostly use marketplaces like StockX and GOAT to resell footwear. StockX took sneaker reselling by storm when the app went live in 2016, allowing the sales of unworn sneakers also known as “deadstock,” or “DS”.
Deadstock once meant stocks of sneakers that weren’t sold to the public in unworn conditions and will no longer sell because there is no demand. Nowadays, it means any new pair of sneakers. StockX also allows a user to sell popular accessories, clothing, and collectibles.
GOAT launched before StockX in 2015 and allows users to sell new and used pairs of kicks along with apparel. Both platforms authenticate the products beforehand so both parties are satisfied with the transaction.
You would think the resale market would slow down during a time like this where nearly half the U.S. population is jobless, but you are definitely mistaken. “May and June of 2020 were the biggest months for sales in the history of StockX” (Dunne).
This uproar in sales beat the companies largest selling month back in December 2019. It is assumed that the increase in sales is due to the slight drop in resale prices. Resellers can now move more products due to unemployment benefits and stimulus checks.
At this moment in time, many have more cash on hand then they normally would and Sneakerheads are not ready to stop acquiring sneakers on the aftermarket.
Right now is actually the best time to buy sneakers on the secondary market since there’s not much to do, and as previously mentioned, prices are lower than they have been in a while. To some resellers, the sneakers they have piled up are their version of a savings account; if they don’t have enough capital at the moment to continue to move product at the same pace they have been before the pandemic, they start to panic-sell so they can have a little more money to play around with, which explains the lower prices.
In addition, the lower the cost, even if not significantly lower than the trending prices, results in more sales. An increase in sales at a slightly lower price equates to more money made then you would at your normal asking price, since now consumers will be buying more.
As of now, the sneaker resale market is doing pretty well and there’s much confidence in it.