Source: The State of Resale 2024 – StockX
Whether the sneaker industry will admit and whether sneaker culture likes it, StockX is the measuring stick for the business of kicks. The site provides a bevy of data on trends and is capable of supplying real time indicators of brand heat.
This doesn’t mean the platform is immune to shifts in the market. StockX can’t come outright and say that their business is facing considerable headwinds. The brand has to position the business as continuing to grow in different ways, because at some point all investors will look for an exit. The site will eventually have to IPO.
Right now, StockX hasn’t really been discussed as Nike and other brands have shown a slowdown in sales. I’ve always made an effort to utilize resale as a tool for discussing the industry. This post continues the trend. There are a few key points to consider when looking at StockX. The amount of information available is overwhelming and would require a livestream or chat for questions to be asked. Here, I’ll deliver a few notable adjustments the ecommerce site implemented to offset the cooling resale landscape. Some of these changes aren’t improving resale, but they will provide new revenue streams for StockX beyond being the interface for transactions.
StockX Adjustments
As resale cools, StockX has implemented guardrails to generate revenue. Without information from the brand on the performance of these new tactics, it’s hard to know just how well the changes are working. What is evident is the company is taking a playbook from traditional e-commerce in an effort to satiate new users who are more familiar with the speed of shipping from brands and platforms like Amazon.
Not Quite Fulfillment by Amazon but StockX Pro FLEX Expedites the Buying Process
1. Flex and StockX Xpress Ship
StockX Flex Program – While not exactly linked to Xpress Ship, the Flex Program is StockX’s version of FBA (Fulfillment by Amazon). Flex allows a seller to warehouse their products with StockX. The seller can adjust inventory prices just as if they are FBM (Fulfillment by Merchant), but there are penalties for removing products from StockX’s warehouses. The warehousing of products allows for a decreased ship time to patrons of the site. That’s a good thing.
Xpress Ship is easily overlooked as a small icon on the page design of select products on StockX. The small rocket ship identifies items which have been pre-authenticated and will ship in a fraction of the time of a traditional StockX order. Traditionally, when a consumer makes a purchase:
- The seller ships it to StockX (2-3 days).
- StockX authenticates the product (2-3 days).
- StockX ships the sneaker to the buyer (2-3 days).
6-9 days is a long time for a buyer to wait for product especially when 6-9 days are on the short end. A seller gets up to 48 hours to ship with the opportunity for an additional 24 hours, which could extend the shipping time of a purchase.
Where StockX shines and improves on Amazon’s FBA, is Amazon’s Fulfillment doesn’t distinguish between products and the items are not authenticated or double checked when returned by a consumer. This leaves sellers using FBA in a compromised position when a product is pulled from a pile indiscriminately. If an FBA merchant has damaged or counterfeit goods, a consumer is at the mercy of FBA’s system. Since StockX is authenticating all sneakers and returns are not accepted, Flex offers more protection.
2. StockX Ads
Much like the advertising program at eBay and Amazon, Sponsored Products should allow listings to be amplified. Here is the interesting aspect, unlike eBay and Amazon, StockX is a “shared listing” marketplace. One listing represents all sellers. This means the person advertising with the lowest price will earn the sponsored amplification listing.
Trying this program requires serious A-B testing as highlighting a product which gets a bevy of impressions and clicks will undoubtedly run the price up on how much a seller is paying for the ad. For example, using adidas UltraBoost to test the Sponsored Ads program from August 27th to August 31st provided the following data (pictured below). adidas UltraBoosts have a horrible sell through rate on StockX. The lowest asks on 10 different styles may sell 3-6 pair in a month if the seller is seeking to turn even a small profit. The UltraBoost has to be priced at cost and below to sell quickly. What does this mean? Sellers could take a bigger hit on older inventory using Sponsored Ads. The data below was for UltraBoost in the Sponsored Ads program:
55 Clicks isn’t a bad number at all, but there weren’t any sales. When margins are razor thin and UltraBoost sneakers sell at a slow rate, over the course of a month a seller could incur additional costs and if the seller isn’t vigilant about checking the program page, the “set it and forget it” aspect could come back to bite the seller since payment is automatically deducted the following month. This program, with the right sneaker could help a seller move dead product, but the risk may not be worth the ad spend. StockX Ads is definitely a new revenue stream which StockX can tout when discussing revenue, but how many sellers will “set it and forget it” will probably be a tough ask by StockX.
3. StockX Cross Category Bulk Shipping
On May 31st certain sellers (not for all sellers) will specifically be enabled to create and ship cross vertical bulk shipments — sneakers/shoes, apparel, trading cards only. On StockX PRO a seller can do 12 sneakers, or 12 apparel, or 6 of each, but they can’t do 12 of each. IF trading cards (even 1) is added, the max total the bulk shipment can contain is 6. The system will not allow you to go over your limits.
I did a fairly good explanation of Bulk Shipping on StockX in the article above. The difference with the e-mail to sellers above is StockX corrected a major issue with how bulk shipping worked.
An example for context is needed… Jordan Brand created a monogram bag which looks a lot like high end Gucci or Coach bag. This bag became a solid seller. The issue with the bags were shipping. They were much bigger than a box of sneakers and as sales slowed a seller could have 3 sneakers in a bulk shipping box and then they would have to place one bag sold in a different box. This created expenses for StockX as a larger box incurs a heavier shipping rate. The e-mail above solves this and is another notch in recovering revenue for StockX. You can now place different categories of products into one shipping box. As apparel becomes more popular, along with bags, this is a good thing.
4. StockX is now using Google AdSense
AdSense allows publishers to generate revenue with ads delivered by Google and its partners. As ad blockers have become more effective at removing the ads, AdSense is no longer as effective as it was, but that doesn’t mean revenue isn’t still capable of being made… especially when a site locks down 20-35 million visits per month (and ad blockers aren’t truly effective on mobile). Up until recently StockX had no way to monetize lurkers and daily visits. Now that the platform is featuring AdSense those impressions are now revenue generators.
There is an uncomfortable truth which arrives with the use of AdSense for StockX. In the image above, it’s obvious I’ve been shopping for a high jump pit and landing pads for high jump and long jump. AdSense is very good at utilizing cookies to target browsers. StockX understands when it takes multiple visits for a buyer to finally make a purchase. The multiple visits by potential customers was a good problem for StockX. A customer could browse the site, and they would eventually make a purchase. With resale slowing down, lurking eventually leads to conversion, but the bounce rate becomes a bigger issue. StockX, in the past, had nothing on the homepage or landing pages which funneled away from the site. StockX’s content directs a visitor internally. Reading an article? Links popped to products within the site.
With Google AdSense, when a visitor clicks an ad, it takes them away from the site. In a cooling resale environment capturing revenue on 30 million visits per month isn’t a small thing. According to the AdSense Revenue Calculator
Estimated Annual Revenue:
AdSense: $748,800
StockX could generate an additional 3 million dollars a year from Google AdSense. To be fair, StockX’s growth has always been astonishing. I’ve documented the rise over the years and StockX website traffic, as it relates to sneakers, is industry leading only trailing Nike.com. Which moves this discussion from StockX’s guardrails to the slowdown in resale. This post was initially going to discuss an opportunity StockX has failed to capitalize on, but it’s more important to understand why StockX had to implement these support systems. Why has resale slowed?
Continue Reading this Series
StockX Adjustments in a Cooling Resale World – Part 1
The Death of FOMO in Sneaker Resale – Part 2
Made to be Discounted and the Arbitrage Snitch -Part 3
How the Year over Year Reports on Resale Provided Hints of the Reality – Part 4
The Decline of New Releases in Sneaker Resale – Part 5
