December 4, 2013 in Daily Bulletin

Adrian Uthayagumaran and Steven Lo at the always excellent Ivey Business Review took a look at the secondary market for sneakers:

  • Today only 15% of sneakers are sold for athletic purposes. The rest are bought by customers looking to keep up with fashion.
  • To maintain an air of exclusivity to their brands major sneaker companies keep the supply of their shoes low.
  • The undersupply means that sometimes prices surge to incredible amounts in the secondary market. In 2012 a shoe that Nike sold to customers for $245 was then sold on eBay on the same day for $90,300.
  • In fact the average pair of sneakers on eBay sells for $250 – more than double the $104 that sneakers cost in stores.
  • Prices are driven by a community of hobbyists known as “sneakerheads”. An entire industry has sprung up to serve them – from annual conventions, to boutique sneaker stores that verify the authenticity of shoes.
  • Estimates suggest that sneakerheads could be a $3.6 billion market.

Find out why this is an incredible opportunity for Foot Locker, and how it can take advantage of it, as well as how Fight Club, a boutique sneaker store, operates and more details about sneakeromics over here.

Source: Ivey Business Review