Fancy a pair of Travis Scott Jordans or Panda Dunks? You might be able to snag them for a reasonable price on the resale market – quite a turnaround from a year ago.
Why is this important: The price drops signal that the moss has exited the market, leading sneaker chiefs and analysts to wonder if the market is crashing — or just normalizing.
By the numbers: Altan Insights, a data and research provider, looked at resale platform StockX’s price data for over 100 popular sneaker releases from the past few years. He found that the average price return in 2022 was negative 7%.
- In 2021, the same sample was up an average of 23% (excluding those released In 2021).
- Select pairs from Nike’s latest collab with Travis Scott are currently selling for around $500. They likely would have been in the thousands had they been released in 2020, says Mike Sykes, author of The kicks you carry Blog.
- On the lower end of the price spectrum, Sykes points to the Nike Dunk in the black and white colorway – nicknamed “panda” – an old regular general release shoe. They fetched over $300 on StockX in 2021, but are now typically $150 or less.
The backstory: Sneaker reselling was hailed as an alternative asset class in the mid-teens, with growing active marketplaces on eBay, as well as startup platforms like StockX and GOAT. We’re not talking about sneakers – these are the limited editions and celebrity collaborations that customers will pay more to own (and maybe even wear).
- In the age of COVID, the market received the same boost that a host of other speculative assets have done (think crypto, NFTs, meme stocks), fueled by stimulus cash and the accommodative monetary policy that made speculators believe markets could only go up .
Zoom out: Sneaker giants like Nike have long operated on a model of scarcity and hype in order to drive demand, but supply chain issues resulting from the pandemic have increased the scarcity factor. (Also, for a while there were no show tickets for enterprising resellers.)
“People saw the headlines on the huge sums of money that sneaker dealers were making in the market, and that brought in more people,” says Dylan Dittrich, research manager at Altan Insights and author of the 2019 book “Sneakonomic Growth.”
- “It got to a point in 2020 and 2021 where pretty much every sneaker released on [Nike’s] The SNKRS app was selling and growing in secondary markets. It didn’t matter what it was.”
NOW: As with most other asset classes, the changing macro environment – rising rates and a general mode of risk aversion – has impacted money flows in the space.
- And those pesky supply chain issues have largely eased: no more shortages.
The impact: Mundane shoes that shouldn’t sell and then hit a 50% premium no longer do. “It’s probably one of the healthiest things to come out of it,” says Dittrich.
The bottom line: Trendy sneakers are still in high demand (just look around every time you step out), and the most sought-after pairs continue to fetch strong bounties on secondary platforms. Dittrich and Sykes say the data so far indicates the market is normalizing rather than cratering.
- Resellers, especially large-scale ones, can still make a profit, but it’s harder for the marginal reseller to make a lot, Sykes says.
- “The climax the market once was in is gone…I think we’re finally starting to get back to a period of normalcy that we once were in, where you can resell sneakers and make a profit – but it’s not going to be that crazy, and it won’t be as profitable,” he adds.