The year was 2019, sneaker botting was just starting to take off, and the world was on the brink of an unprecedented pandemic. Until this point, sneaker resellers were predominantly hustlers who were out in the streets. They would cultivate relationships with the managers of local Foot Lockers to secure pairs, pay people to stand in line for them to cop new releases, and knew the ropes of consignment. They would focus on hand-to-hand sales, securing profits for top dollar and without middleman fees, and their reputation was everything.
A few years earlier, the online marketplaces of Goat and StockX were born, and the game started to change ever so subtly. Some resellers began to shift to online sales, and some stayed in the streets. OGs complained about the middleman fees, and the new breed saw that it allowed them to reach markets far beyond the range of a day's drive. The sneaker game was on the cusp of an evolution and needed a catalyst to usher in a new era. Que the COVID-19 pandemic.
In early 2020, the world was flipped upside down. Virtually everyone was locked indoors, people teleworked, classrooms shifted to online platforms, and sneaker releases took place exclusively online. By this point, a handful of sneaker and retail bots had been created, and tech-savvy resellers began to have success checking out products in mass quantities that manual users could not duplicate. What the pandemic brought about an entire generation of youngsters who grew up in the internet era now being stuck at home with too much free time. This generation grew up with computers, knows their way around coding, and knows how to adapt to the fast-changing times.
The Last Dance
Then came a perfect little storm called "The Last Dance." A 10-part docu-series about the dynasty of the Chicago Bulls and Michael Jordan. Prominently featured in the series was the Air Jordans. The show went into detail about the rise and growth of the shoes and spiked their popularity by introducing many of the younger generation to Mars Blackmon and company. Almost instantly, the resale prices of Air Jordans skyrocketed; pairs just above retail were now going for $300, and pairs already at $300 soon hit $500.
This was it; this was the catalytic event that ushered in today's sneaker game.
Those tech-savvy high schoolers sitting at home with little to do now were interested in sneakers. Sneaker prices went through the roof, and those with an entrepreneurial mindset began to connect the dots. Some started figuring out how to bot, and some began developing their own bots. Combine that with sneaker releases being exclusively online thanks to the pandemic restrictions, and the new world order was here.
Before long, every release of an Air Jordan Retro or Yeezy would sell out in seconds, and the days of standing in line for a pair were gone. Instead of securing a pair or two from an online drop, the botters could now hit clips 20 or 30 pairs, sometimes up to 100. Resellers were hoarding stock and simple supply and demand took over. Those that adapted ultimately controlled the market. Pairs were nearly impossible to obtain for manual collectors, and resale prices hit all-time highs. Goat, StockX, and eBay hit new levels of success by allowing the resellers to reach across the globe for customers, and the sneaker game had effectively evolved.
Now fast forward a few years to late 2022, and young hustlers are making money hand over fist. Every Jordan Retro that releases sells out instantly thanks to new automation software and resellers move products for a substantial margin. By this time, industry titans like Nike and Adidas have caught on. They begin to capitalize by flooding the market with endless colorways. A new Jordan 1 or Dunk colorway releases every other day, and even the once hard-to-cop Yeezys are dropping at a breakneck pace. While resellers initially love this strategy, most fail to realize that this new influx of products would begin to swing the balance of supply and demand in the consumer's favor.
(Botting success from Discord user @Dark$ide)
The Bubble Slowly Starts To Burst
At this time, the pandemic is starting to wind down. Telework arrangements are ending, kids are returning to the classroom, and stimulus checks are a thing of the past. The "Baby Botters" now have homework and college applications to complete. Also, in-store releases are starting to make a comeback, making bottling slightly less effective. Slowly but surely, the combination of market saturation and a decrease in bottling started to bring resale prices back down to earth.
This trend continues into the present day to a point where very few shoes hold any real resale value post-release. GR Dunks barely have retail value anymore. Jordan 1s sit on shelves for weeks. Even Jordan 4s can hardly fetch a cup of coffee these days. Even the Yeezys that are back on the market are available a month after the release. All of these factors combine to make this a sneaker buyers' market.
The young blood resellers who only know the market that allows them to sell at a premium immediately seem a little unsure of what to do. Instead of prices rising steadily post-drop, buyers can sit back and watch resellers undercut each other for the fast money and return pairs to almost retail price. While many resellers claim to be leveraging third-party cash-back apps or other means of buying pairs below retail, a quick look at StockX Ask vs Bids totals paints a different picture.
For example, the recently released Air Jordan 4 "Red Cement" size 10.5 currently has 216 asks and 51 bids (as of 10/20/23) with a price that sits just a few dollars above retail. That tells you all you need to know. Right now, there are more sellers than buyers, which any Economics teacher can tell you ultimately leads to lower prices and stagnant inventory.
The established brick-and-mortar stores are the only resellers that seem immune to this trend. Those who built their name before COVID-19 can still charge a headcrack for pairs. The power of having the shoes on hand to give the customers the chance to walk out with new heat will likely never die and will always be superior to online platforms. While online sales bring worldwide buyers and sellers together, waiting a week for your shoes can't command the prices of in-store availability.
Margin Call
With the online platforms premiums starting to fall, much of their overall success is also. There are more than a few examples of online platform struggles. The first that can be pointed to is the fact that StockX has changed its fee structure four times in the past two years. The updates ranged from changes to minimum fees to instituting shipping charges for sellers. Successful organizations don't often need to make this many changes if their business succeeds. Especially to the tune of lowering their fees, which one can only assume is an effort to attract new business.
Another example of resale struggles is the lack of success seen by Stadium Goods. Stadium Goods was one of the OG consignment shops and was eventually bought out by EU mega-retailer Farfetch for $250 million in 2018. Alas, this success would be short-lived. In August of this year, they updated their fee structure for online sales to include a flat-rate commission for low-dollar sales and raised their withdrawal fee. Their struggles weren’t limited to online sales, as their Chicago location opened in October 2020 and has already closed its doors. When you walk around the streets of Chicago, you see more sneaker heat on foot than possibly any other city in America, and for a brand like Stadium Goods to close doors in that city is a terrible sign for aftermarket retailers.
With the aftermarket sales declining, it was just a matter of time before the "Baby Botters" chits were called in. That day came just this week when Goliath fell. Since the early days of bottling, not many have been able to claim the success of Wrath Software. Wrath dominated the botting scene for years and routinely took stock from nearly every retail platform, including Nike, JD Sports/FinishLine, and Shopify. Wrath's developers made the call to shutdown support and development for the bot citing a "declining resale market" as a main source of their decision.
Another piece to this puzzle is arguably the most critical factor facing the sneaker market. The overall economy in the US is in pretty rough shape. Inflation is through the roof, and consumers have less disposable income than in the past ten years. With the cost of basic human necessities like food, gasoline, and housing hitting people's pockets harder than before, there's understandably less money for sneakers.
It’s A Buyers Market
When you step back and look at the big picture, it's hard to make a case for a healthy sneaker resale market. There are more sellers than buyers, online platforms are in disarray, the best bot in the game just decided to shut down shop, and the economy is in rough shape. It's tough to imagine anyone who doesn't have an already established hand-to-hand local sales clientele succeeding under these conditions.
However, there is a flip side to that coin. It's a buyer's market. Sneaker collectors have a better chance at copping their kicks for retail now than at any point in the last five years. Resellers are dropping like flies, and bots are having less and less impact. Nowadays, full-size runs of new releases can be found on store shelves days after their release. Some releases are even available at a discount shortly after release day. If you're an actual sneakerhead, it's an excellent time to be alive.
With a lot of the manufactured hype dying down, a question can be asked; are sneakers still cool? The answer is simple. Abso-fu$&ing-lutely.
Sneaker culture is alive and well, and in fact, it's better than ever for actual aficionados. Manual copping is again possible, resale prices are in the gutter, and the rise of "Sneaker Twitter" has brought so much information to our fingertips that we have months to get excited about upcoming releases.
Don't get it twisted, though; resellers will always have a place in the sneaker world. Resellers and Collectors can co-exist, and we're starting to reach that common ground. Savvy resellers can still make their money, and collectors have a fair chance of copping their pairs. There's a delicate balance between supply and demand and we may be close to reaching that point. This is a good thing. This means unequivocally that sneakers are still cool and they always will be. 馃槑
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