Press "Enter" to skip to content

How NPD’s Matt Powell Could Be Wrong About Sneakerheads

Share In-Depth News from AHN

Most of the information regarding sneaker sales on this site comes from Matt Powell when I’m not using my own research, or my shop as a microcosm of the market. In his article Sneakernomics Matt Powell had to triangulate the numbers based on Campless data (now StockX) to account for the number of sneakers sold in the resale market. Here lies the inherent flaw in the analysis,  Campless only looks at the value of “sneakerhead” shoes on eBay. This data does not factor in marketplaces that exist such as Kixify and consignment boutiques like Flight Club (not a large percentage, but it definitely overlooks the online marketplace of retailers that are smaller boutiques as well. RIFF, Burn Rubber, Packer, KITH etc.).

Most important this data never includes information on Amazon. Amazon has long been a major player in the resale of shoes, yet the company has been completely overlooked in most analysis. More important, it overlooks the fact that the resale of sneakers by sneakerheads extends to low end items as well. Matt Powell’s stats are based primarily on Jordans which ignores the running shoe collabs and other styles that are sold to sneakerheads, which also influences the style and colors of brand’s other general releases. “Total sales of sport footwear in the US last year were $22 billion. This makes the sneakerhead portion about 5% of the total US business.” By only analyzing eBay and Campless’ data this 5% number is possibly incorrect. Here are a few facts about the third party marketplace on Amazon:

“The Seattle company said Monday third-party merchants were responsible for 2 billion items sold last year, double the total in 2013, even as the number of such businesses held about steady compared with the prior period at “more than 2 million…Those merchants sold more than 40 percent of the items Amazon unloaded last year, according to a statement, suggesting a total of at least 5 billion items sold.”

L2 states that Amazon controls over 50% of online transactions. There isn’t any way to breakdown how much of this is in sneakers. The 5 billion items sold information, from 2014, is in regard to all items on Amazon and there isn’t any way to narrow down the exact number of shoes sold on Amazon, but when you consider the retail/resale market also includes Zappos which was acquired by Amazon for 1.2 Billion another story begins to take shape. Since there isn’t any way to pull data from Amazon, I have to make the study smaller. If we look at my shop on Amazon as a microcosm of the sellers there we can get a better grasp of the comparison to eBay and Campless’ data.

This is a list of the top sneaker resellers on eBay via Campless. https://stockx.com/sneaker-blog/top-25-ebay-sellers-and-131k-more In this article which Matt Powell used to estimate the resale market the top two sellers made 2.7 Million, and 1.7 Million respectively. The third place seller in this year earned only 300,000 dollars. My store on Amazon is one of the smallest stores. As I said I don’t have a count of how many third party shoe sellers are on the platform, but I very rarely win the buybox for the last 5 years and when I do there are at least 100 other stores listed. I can’t triangulate, but if the data from Campless has 1300 sellers from eBay, Amazon has possibly three to four times as many sellers with revenues that are much higher. How can I say this? From 2012 to 2013 the ARCH Online Shop, one of the smallest on Amazon earned almost 1 Million dollars. If the ARCH Online Shop had been included in Josh Luber’s Campless data from 2014, I would have been the third place seller on the list with around $350,000 in sales:

In math we can do a ratio to make an estimate. If my one man shop would have been included on this list, then the biggest shops on Amazon possibly earned 3 times as much as the top two shops on eBay. This is all guess work, but here is a statistic about Amazon’s growth in comparison to eBay:

EBay Inc.’s once-loyal merchants are moving more of their business to Amazon.com Inc., saying they get more for their money by selling merchandise via the Web retailer. Amazon’s pool of merchants climbed to more than 2 million in 2014, while the number of sellers on EBay has remained flat at about 25 million in the past two years. Businesses that at first set up online storefronts on EBay say they’re surprised how quickly sales surge on Amazon once products appear on both sites.

Chris Matsakis, president of daily-deal site DealGenius.com in Chicago, said that as recently as 2013 sales on EBay exceeded those on Amazon’s marketplace. Last year, his revenue via Amazon grew fivefold, and are now four times greater than sales on EBay, he said.

“We’re seeing significant growth on Amazon where EBay has sort of plateaued,” Matsakis said.

I know a comparison of different products being sold is not a way to make a comparison, but all I’m doing is offering an opposing theory to Matt Powell’s suggestion. If we can consider that Chris Matsakis’ growth was 5 times. and we apply that to Matt’s 5% the number could possibly change dramatically when we analyze resale.

I think the error in estimates derives from the fact that Campless only assigns value to Jordan Brand or “hyped” shoes. Even on their own platform StockX, they are missing a considerable part of the market because there isn’t any way for the site to sell to the average customer. Cheap shoes aren’t listed at all, only hyped reseller shoes, but sneakerheads by “beaters” also. If you consider my shop as a microcosm, I very rarely sell Retros, but I’m a sneakerhead and so are countless other third party sellers on Amazon.

Matt ended his Sneakernomics article by stating that sneakerheads aren’t influential, “Within the echo chamber, the voices of sneakerheads are loud, but those voices do not carry.” The running shoe market and footwear in general has very little to do with the sneakerhead community but yesterday I posted this “Are Sneakerheads Really Influential“. My reason for doing so was to establish that sneakerheads influence is much larger than it appears. When you read my article you will find that Hypebeast IPO’d. A sneaker blog had an IPO. Complex, basically a sneaker and fashion blog was in talks to be acquired by Verizon/Hearst. GOAT an Apple App for sneakerheads garnered a 12 million dollar investment and even Campless earned an investment from Cleveland Cavaliers owner Dan Gilbert.

Are the articles on Sneaker sites redundant? Yes. Do they dig in and do any real studies or share information not about hyped shoes? No. Is it basically an echo chamber? Yes, but Matt Powell might be wrong about the sales and the reach.

Update:

I was asked by Matt what my estimate of the resale market is so I wrote some e-mails and did some more research.

According to IBISworld, online sales of footwear between Amazon and Footlocker is 12 Billion.

L2 states that Amazon controls over 50% of all online sales. While the 12 Billion appears to be split between 50/50 I’m making a guess that Amazon controls about 60% of this market based on third party and Zappos and a better sales machine. This means that Amazon is possibly taking in 7.2 Billion in footwear. Since the sales on IBISworld list Amazon against Footlocker, I can reasonably assume that this is athletic footwear being analyzed.

According to the articles above 3rd party sellers are right at 50% on Amazon. This means that 3.6 billion of sales could be 3rd party sellers. 

If Amazon has around 3 Billion in resale, added to the 1.1 Billion from eBay, the resale market is no longer at 5%, it could be between 15-20%. 

I’m not great with numbers so let me know if I’m off. This is good for the dialogue either way.