The Sneaker Black Market
Not long ago sneakers like Nike and Adidas came at an affordable price. But things have changed dramatically with a pair of limited edition Jordan sneakers setting you back hundreds, even thousands of dollars. But what happened to inflate the market price? Was it something deliberate done by the brand or by resellers? And finally, what are the ethical concerns and repercussions of these expensive limited edition shoes?
It all started with the creation of Air Jordan’s, a sneaker collaboration between Nike and famous basketball player, Michael Jordan. Jordan’s opened up a frenzy of sneaker connoisseurs now known as ‘sneaker heads’. Fans of basketball players would purchase Nike Jordan’s, Kobe’s or LeBron’s as a way to show exclusivity and power within the ‘sneaker head’ community. Decades later, the hype for NBA collaborations is still thriving, but as new generations enter the world of sneaker head collectors, the game is changing and so are the reasons for collecting.
Source: ‘Wings’ (Music Video), YouTube Video (click photo for link)
Sneaker Con in New York City houses the biggest convention for sneaker heads to buy, sell and trade sneakers. One seller, Brandon Booskenera, 12, stated in ABC New’s video, “It’s a cycle. Buy, sell, trade. It’s kind of a hobby… An addiction. More of an addiction.” The notion of a new generation collecting sneakers for financial benefit rather than for personal enjoyment is questionable but also a reality where ethical issues arise. As an original sneaker head with over 2500 sneakers collected, DJ Clark Kent believes new generations aren’t collecting for the same reasons his generation did 35 years ago. According to him, “these kids today don’t seem like they want the shoes. They want the “thing” that goes along with having the shoes. Somebody found out there’s money for a pair of sneakers, because of the hype”.
Source: ‘Sneakerheads: Inside the World of High-Stakes Sneaker Trading’, ABC YouTube Video
Nike’s marketing tactic for keeping the hype alive for new shoes is based around their Saturday launches. Every Saturday, Nike releases a small quantity of a particular shoe design for sneaker heads to fight over. People were able to line up at participating stores and attempt to purchase a pair of the newest sneakers. However, the hype behind many launches surpassed Nike’s control and riots broke out at local malls. Thousands of sneaker-heads were injured, arrested and trampled over, just for a pair of new kicks. In some instances, teenagers are shot, stabbed or robbed for their new pair of shoes while they’re walking or catching transport home. An issue familiar to many in the sneaker head community, even artist Macklemore releasing a track ‘Wings’, depicting a negative image around sneaker envy to the point where his “friend Carlos’ brother got murdered for his (Jordan) 4's”.
Ethical issues arose against Nike for the way they carried out supplying limited sneakers to the public. Many claimed the actions of the murders stemmed from Nike’s failure to supply the demand of a limited edition shoe. So what did Nike do? Well, you can’t get hurt clicking a button. Today, many (but not all) of Nike’s hottest Saturday launches are sold online, where it’s even harder to score a new pair of sneakers, making them even more valuable. Rather than wearing limited edition Nike’s, many sneaker-heads are buying limited edition sneakers to resell for double, triple or quadruple the retail price. Sneaker analyst Josh Luber, 32, says as soon as Foot Locker launches the newest Saturday sneakers country wide, thousands of pairs appear on eBay the next day.
Source: FiveThirtyEight, ‘You See Sneakers These Guys See Hundreds of Millions in Resale Profit’
It’s Saturday in Harlem, New York and more than 100 people have been waiting in line outside Footlocker, with hope to purchase the new release of LeBron 11: What The. According to site FiveThirtyEight, 22-year-old Shirod Ince, an avid sneaker head had been waiting in line since Wednesday to purchase a pair. However his intentions weren’t to wear them. Like many sneaker-heads today, Ince is an entrepreneur that collects sneakers to sell online on sites such as eBay. With a price tag of $250, its considered chump change for many resellers. On eBay, a new pair of LeBron 11’s was selling for AU$850 — That’s a mark up of 240% and a profit margin of $600. However, this is considered an average profit. Air Yeezy 2 Red October’s, designed by Kanye West retailed at $250 but sold out worldwide in 2 minutes with only 2000 pairs made. Only one pair remains on eBay Australia and for that very reason it is selling for $6,734. That’s a mark up of nearly 2700%! This ridiculous mark-up would be unheard of for any other type of ‘hobby’, but in the sneaker world shoes never depreciate.
‘LeBron 11: What The’ on the left, ‘Yeezy 2 Red October’ on right (click images for link)
After researching this topic, I admit I have become somewhat of an admirer of sneakers. However, the sneaker head community still baffles me. The most concerning factor is children as young as 12 years old buy, sell and trade shoes for thousand’s of dollars, all in the name of addiction. But as I researched, I understood how smart and savvy these children are becoming. They learn first hand at events, such as SneakerCon, how to handle customers, create sales pitches to potential buyers and ultimately, build their confidence with each sale they make. Although the mark up is astonishing, Nike has created a multi million dollar resell market place that has created a new generation of sneaker heads. Whether you believe this is a positive approach for it’s educational angle or negative approach for the unethical Saturday launches, the fact stand that unless sneaker heads band together and say “I’m not going to let you charge me that much for shoes”, nothing will change. It’s a vicious cycle of greed and envy, buying to sell and selling to make more money. I’ll leave you with this last question: If the resale value of sneakers did not increase, and instead depreciate, would the new generation of sneaker-heads still camp outside Foot Locker for Saturday launches?
