Average Sold Price
In previous RRA’s I haven’t broken down my profit. I’d like to do that here, but it will be confusing. I’ll try to make it as clear as possible. First I’ll give you the Average resale price of the shoes sold on StockX which was $112.62 before fees. After StockX fees, the average resale price was $98.79. Sales dipped to under 100 dollars, but this was a matter of the style of shoes sold, and the fact that hardly any of the shoes sold garnered SRP. (This needs a full explanation, but only in a consult as the information is more complex than I can explain in writing.)
StockX Gross: $32,886.00
Net After StockX Fees: $28,845.51
I have to be very specific here. In Part 1 I explained that I made Gross $49,945 for June. The Amazon payment from May, which paid out in June was $7,539.33. This means that if I factor in consignment payments (most of the sales on StockX are from consignment), consignment payments were $33,958. That leaves profit at $15,987 – Amazon (since the sales took place in May and payout happened in June) leaves $8448.00 as profit. If you notice that consignment is more than the StockX Gross, it includes wholesale shoes purchased from sellers. I have to find a way to isolate my data to breakdown the wholesale purchasing.
Policy Changes Are Stopping Wholesale
I typically place a chart here to show StockX averages, but what I need to do instead is look at the breakdown of shoes that sold. All shoes except two were Nike or Jordan. I sold two Reebok Kamikaze, but as I stated before, FootLocker now limits the purchase of shoes to two to prevent resale. In Part 1 I gave you how much I spent at retail stores. Most of those sales happened because I won raffles. In previous years, I spent 20-30,000 dollars at retail stores on all types of shoes. As more resellers were born, policies changed that shaped how real business people operated in resale. The new resellers visit stores every day looking only for Dunks and Jordan 1s. Those buyers never purchase other brands. They don’t help the stores. The items they buy sell themselves. The policies created stopped buyers like me who helped stores. It’s an interesting discussion. Sneakerheads have wanted to slow down resellers and they have, just not on the shoes that sneakerheads want, lol.
This is where I want to move in this discussion. At any Nike store you can purchase five of the same shoes, unless it’s heat. They don’t stop you from buying that shoe the following day if it’s still there. This has led to buyers utilizing Nike doors for resale, as every retail store chain prevents the purchase of multiple sneakers. When you factor in the ease of StockX and how every store manager understands the value of the hot shoes, there is a battle in stores between resellers and store managers. This is leading to fights at retail stores and all kinds of problems.
The limitations on all shoes is a matter of policy. This makes sense if a chain is trying to prevent resale on popular shoes, but the issue is the Kamikaze was on sale at FootLocker for 69.99. As I’ve mentioned before, the Crazy BYW is on sale at 29.99. I would buy every shoe, although no one shopping wants the sneakers, but I can’t and I don’t break the rules by having multiple people visit and buy pairs for me. Instead of FootLocker getting an extra 20-30,000 from one buyer, they’ve limited discounts and purchasing and I’m only buying 1000 dollars in kicks on raffles. I recently visited a City Gear store and for the 4th of July they were doing a 50% off sale on sale items. Since City Gear aligned with Hibbett Sports, these types of sales are few. They used to be a lot more consistent, but this was a rare occasion. I was able to buy a stack of Space Hippies and NMDs, but the reality was even at 34.98 a pair there was barely any resale value in those shoes because the shoes had been out for so long.
Prior to Covid-19 I was writing that resale was slowing down. This didn’t have anything at all to do with supply chain issues. The sneaker industry isn’t very healthy when it comes to retail. DTC is doing so well that retailers are fighting the brands. There are deals to be found in your inbox every morning if you are signed up with the brands. adidas doesn’t have any brand heat that drives resale (Yeezy isn’t readily available) and the brands outside of Nike that hit resale are limited collabs. Those shoes don’t make it to general release/wholesale account holders. Those shoes hit boutiques and specific stores in different regions. Resellers are more mobile than they’ve ever had to be. As stores limit quantities to purchase and only Nike is capable of being resold consistently, at this moment there are more places to sell than there is inventory.
Resellers are fighting over the same shoes. Arbitrage is non-existent and StockX has created such a simple selling method that the site controls the market, limiting opportunities, but gaining all of the engagement. StockX is now functioning as a buy and hold wholesale marketplace fueled by sellers like me capable of selling below SRP. But it’s a gamble for people to buy and hold as Nike is doing restocks often. I’m not placing any charts in this post, only a very serious warning. I said it in part 2. Resale cannot continue to grow in this fashion and investments into this area, into GOAT, StockX, and all e-commerce built around sneaker culture is built on wooden legs in lava, unless it’s the brand doing the selling, or the ecommerce is getting fantastic deals on inventory. Resale is broken, but it doesn’t matter. The same shoes are selling over and over again inside of the sneaker resale arena. In Part 2 I discussed whether a business wants a customer who is buying a 100 dollar sneaker to wear 18000 times, or a reseller buying and flipping the same high priced shoe 30,000 times. I ask that question again.
