Note: The RRA is based on my own sales numbers. This microset of data is meant to inform and I use it to make predictions about the sneaker industry. My ratio analysis consists of data pulled from utilizing third party marketplaces and wholesale relationships. The in-store analysis is my own research and does not reflect requests made by the stores visited. This is part 1 of the monthly report. Charts and analysis of shoes sold will be included in the next parts. – Chris B.
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, the availability was not because of resellers. Consumers are buying when the hot product is in stores. Resellers are not doing very well right now. I know you’re saying, “but you’re a reseller.” True, but I’ve never built my research and sales on backdoor deals. I buy what’s available. Hype resellers are paying a lot for hot shoes right now. It’s very interesting to listen in on conversations in stores.
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.
Why was there such a drastic drop in spending? I didn’t win any raffles on Hibbett Sports/City Gear, but I was able to buy a few sneakers at City Gear because I was doing store visits to check out what was happening. While stores are beginning to get shipments, items that are hot sell almost immediately. City Gear isn’t as promotional as it once was so I don’t think I’ll ever see spending numbers at CG that compare to historical spending at the retailer. Is this on par with what traditional consumers are doing? I’m not certain, but after so many years of promo, City Gear has to be dealing with the adjustment for their core consumer. I think the addition to Hibbett Sports digital is what hides this adjustment. Hibbett Sports is in a fight for its identity.
FootLocker, as I mentioned in previous reports, has really cut back on resale. They have removed any discounts available and they limit buyers to only three shoes of any style. This is a good thing since demand is high and money seems to be burning a hole in the consumer’s pockets. As the world opens up more and recreational spending returns to movies, restaurants and other activities, I think FootLocker’s attempt to prevent resale could backfire on them. Resellers, not hypebeast Jordan 1 and Dunk resellers, will take on a considerable amount of “bad” inventory in arbitrage. Since the restrictions have been put in place, I’ve stopped buying a lot of shoes that I would visit and pick up 5 pair a day in some instances. FootLocker has adidas Pharrell Crazy BYW for 29.99. I can only buy 3. They have over 50 in inventory in three different colors. The average consumer doesn’t care about the shoe, but there is a digital consumer. I can’t buy the shoes. I find that a bit ridiculous, but I understand.
So where did my spending shift? With retail no longer an option for resale outside of Jordans and Dunks, I moved back towards wholesale. I opened my office to bulk sellers and sold to stores and buyers who lost their Nike accounts. In May I spent $26.573.00 on wholesale/consignment sneakers. That number increased considerably. Notice in May I spent over 9,000 at Nike. That’s because Nike allowed military and veterans to visit their Nike doors and use a discount. That ended in June. The money I spent on wholesale/consignment increased to $33,958.00. That’s a 27.79% increase in wholesale/consignment spending. What does this mean? If you have money to spend, it will find its way to inventory. How can brands and retailers capitalize on this information? Is this exclusive to resale?
June HIGHLIGHTS
- Although I sold more in wholesale/consignment I still utilized StockX as an outlet.
- I sold a few pair on Amazon, only as a safety valve.
- In May business income was $42,019. In June business income $49,545. The increase was due to an increase in wholesale and the payout from Amazon who holds funds for almost three weeks.
- 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.
- 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.