Last month in September I continued with my reopening of my Amazon Seller Central Marketplace account. By the end of October, I was shutting it down again. Although the numbers above show that I made $20,255.49 on 193 pairs shipped, this doesn’t tell the entire tale of Amazon as a marketplace. I continued using eBay and StockX, but both of those channels remained flat. I considered opening a Grailed account and even looked at The RealReal, but realized that neither could accomplish what Amazon did. My profit margin on Amazon is 3 times as much as it is on any other platform, but Amazon is quite frankly, the worst selling platform for a third party business (at least in sneakers). On the chart above it shows 23 refunds or a 22% return rate. A small business cannot sustain with a 22% return rate especially when the sales platform does not disburse the funds in a timely fashion. The return rate jumped from 9% in September. StockX and eBay should sit down with me to ask serious questions about why one SKU can sell for so much on a platform and not sell at all on their platforms (or sell very slowly and nowhere near as close to the price).
eBay: eBay has squandered its position as the established brand in resale. I can’t move new product with boxes and selling items without boxes by offering deals, isn’t very effective. If a seller has a product that attracts a considerable amount of attention, with or without a box, that product will sell. My numbers there do not inspire me to take on inventory to operate a store full time. It’s very interesting to see StockX, as a new platform with more fees, be able to provide sellers with sneakers sold at all pricepoints. That’s not a bonus or a good thing for StockX, as the site and its Dutch auction format generates a race to the bottom. One of the main reasons an everyday person can’t really participate in resale, outside of hyped products, is that the sellers on StockX, and other platforms, are fueled by some of the best prices for the acquisition of footwear: Free 99. After speaking with store managers at Finish Line and Foot Locker, the theft of goods remains a serious issue. The theft is happening in store and via delivery services. Those shoes are entering the market and setting a terrible baseline for pricing. All it takes is one sale of an item below retail to kill the market for a particular item. I used to write about how much I spent at Foot Locker and retail stores. The majority of my sneakers acquired arrive via consignment from people with access to heavily discounted sneakers.
My eBay stats are as follow:
Amazon: I killed a 20,000 a month cash-cow. I left Amazon in 2016 and said I wouldn’t return. Due to circumstances, I returned. In two months I realized why I left. Amazon appears to be getting rid of third party sellers. The company implemented a new policy that saw my return rate rise over ten percent in one month! While this chart shows some incredible daily sales, the other pictures here show the returns which you can place on the average sale price of 111.38, or a loss of $2,561.74. Inventory rings up at right around $11,000 dollars. Amazon fees and shipping are about 15% plus 8.88. That’s about 24 dollars in fees and shipping, or $4,632.00 dollars. This means that 11,000 + 4632 = $15,632.00 add in the returns and that cuts the 5000 profit in half. Half of those returns resold. Half of those returns could not be resold and because of the new plan to keep third party closely aligned with Amazon’s rules, sneakers became problematic almost immediately. Take a look at the chart and you’ll notice a dip in pricing from the dates of 10-19 to 10-26. Amazon allowed new sellers on to the platform who began vying for the Buy Box by dropping the prices almost immediately. This reduction is price coincided with a new “Refund at First Scan” policy that compounded the “Automated Returns” from the previous month. Consumers are wiping out third party sellers. The consumer on Amazon is used to free returns. They by without thought and return just as quickly. Look closely at the end of the month. There was a 100% return rate for any shoe that sold. That is insane.
StockX
StockX is the king of sneaker resale. Every other platform is playing catch up. This sounds good until you realize that almost every sale I made on the platform, 354 sales… this takes me too far ahead. Sales on 354 pair came out to $31,306.37. Once again all three platforms generated over 50,000 in sales, but StockX is a consignment channel for me. I may not be spending money on that inventory, but the numbers are way down for how much each item is selling. StockX through the use of its Dutch martketplace system is folding in on itself, for sellers. The site itself has insulated itself with its fee structure, but it’s becoming much more difficult for new sellers to be born on the platform unless they are selling the usual suspects of Yeezy, Jordan and Dunks. Shoes are sitting on shelves at retail and a place like Foot Locker is collapsing under the weight of the Nike wall. This means that retail is also collapsing.
I’m just getting started on this report, but it will be much darker than the $50,000 in sales will show.