Instead of rewriting the wheel, I’m going to begin this month with how I started last month. I will add this at the start, the hype and interest in resale, the money flowing into startups and people touting that they have the next big thing, all of it is false. Resale is flat and I don’t see any way for it to bounce back as long as adidas can’t challenge Nike and as long as general release pairs aren’t garnering any interest at all. The only, and I mean the only, people reselling are those who are running bots and hitting on multiple pairs of major releases from the big brands that are hot. When I can’t walk into a mainstream retail store and buy a pair every day, the market is in trouble. This doesn’t mean that retail is struggling. Resale, however, isn’t adding new sellers and only those who have been in this business for a long time, or who are very close to Nike stores can resale with considerable margins. Everyone else is buying on resale sites to resale at what they hope is a higher price.
Last month’s introduction with an addition:
In June I made a hard shift back into wholesale. Allotments of shoes at retail weren’t readily available. Every major release had to be won through a raffle. While I did win a number of raffles,
Let’s compare May to June:
MAY 2021 I spent $2,508.00 at FootLocker and Footaction locations, $593.00 at City Gear and $362.00 at Hibbett Sports. The majority of the money spent was to Nike and that total was $9,735.00.
JUNE 2021 I spent only $1,572.00 at FootLocker and Footaction locations, $1,076.00 at City Gear and nothing at Nike or Hibbett Sports.
JULY 2021: I spent 473.00 at FootLocker, 159 at Champs and 220 at Footaction. $852.00 spent at FootLocker. I spent 1569.00 at City Gear locations. I didn’t spend anything with Hibbett Sports or Nike.
How can I write this report if I didn’t do any shopping? I visited every store and what I’ve found is that the raffle system works, for resellers. The average consumer walking into a mainstream sneaker store will hardly ever land on a Retro or Dunk. The raffle system is utilized by smaller resellers to grab the pairs releasing. In fighting resale, retailers have removed the ability to get the average consumer bigger releases. It’s a problem driving the average consumer towards resale sites, which is frustrating for that consumer. This consumer has begun to adjust by buying other brands. You won’t see that in this report. Since mainstream sneakers stores are tied to Nike and the Nike wall, consumers who do choose Nike are piling into the Nike digital system because Nike is doing a fantastic job of “restocking” major releases and carrying product on their own platforms. It’s an interesting thing to watch. Once again, this isn’t a complete analysis, because people are still shopping. For mainstream retails, the margins are thin because the high dollar sneakers aren’t really there. The customer is settling for promo items and cheaper footwear. I think this is getting too confusing.
Where is my money going? July 2020 I spent 4,880.00 at FootLocker. July 2019 I spent 2284.00, July 2018 I spent 1158.00. When I write these reports I have to remind myself that I’ve been saying for the last 5 years resale has been trending down. This is a matter of supply and demand. As more resellers are born, the amount of pairs diminishes. There shouldn’t be a surprise when I don’t spend at retail. Because I’m not hunting the hottest shoes and I never have (my research has always informed my writing), I don’t make it to the store before the more active resellers. The data shows that my purchasing increased over the last three years. What has to be considered is that FootLocker was always my primary mainstream point of purchase. I was able to use my military discounts and VIP coupons. This meant that I was able to by all kinds of brands, not just Jordan. In 2020 FootLocker limited the military discount and reduced it to 15% and it can only be utilized 4 times a month. Resellers were visiting stores and standing around waiting on any Jordan 1, which was the only shoe that could be flipped, and they were bringing teams. 2020 was a reopening month after quarantine. There were so many promos, I didn’t need a discount. 2020 is an anomaly. This month is the reality. None of this answers the question, where is my money going? In July 2018 my consignment payouts were $15,648. In July 2019 my consignment spending was flat at $15,666. In July 2020, my consignment payments were $28,046. In July 2021 my consignment spinning was $86,340.
You read that correctly. I almost spent 100,000 in consignment payments. The world has changed. This information should be eye-opening to everyone involved in the sneaker industry.
July HIGHLIGHTS
- July and August always shows an increase. It’s back to school, and this year the Olympics are taking place. Add Space Jam 2 into the mix, and July turned into a very good month.
- Sales on StockX in May were $38,600. Sales on StockX in June dropped to $27,917. That’s a -27.68% drop in sales on the platform. This is expected at the end of a school year where most students stayed at home. With mask mandates in place and schools reopening, StockX followed the retail market and increased considerably. Sales on the platform hit $60,818 before fees. After fees net was $53,901.18
- “I sold 292 pair through StockX compared to May where I sold 348. I predicted a slow down in resale and this two month decline can’t be taken as evidence of all of resale, but with general release, especially for sellers who don’t have access to Dunks and Jordans, I have to guess that things are slow across the board.” I wrote this last month. What I failed to add was that it was the end of the school year. July is the start of BTS. I sold 469 pair.
What does all of this mean? It means I’m going to have a very difficult time breaking down July. There is a lot going on and all of it is important to the marketplace. This report would be better served as a Q&A. On to part 2.
