Nike OFF Whites are the New Yeezys – What Does it Mean for Nike?

FD4CA4F3-A042-44B5-AA71-2AC170488CB0

If you think Nike was feeling the pinch when Kanye jumped ship to Adidas…think again. Agreed Kanye did make a mark for a few years in the market as there was 2 years it did seem like Adidas did have a chance of overtaking Nike for the top spot, but keep in mind Nike has been in this for many years and they got the track record to prove it. The Kanye effect at Adidas was substantial as it brought synergy to various other Adidas products like the NMD and Pharell Human Races, but over the year it has shifted quite drastically. As re-sellers, we are typically the first ones to spot trends because we deal directly with the aftermarket demand and supply on a larger scale. Retailers isn’t the best gauge because all the decent hype stuff gets sold out instantly or get snatched up by resellers anyways. Best example would be the Yeezy Powerphase, its sold out at retailers, but all the re-sellers have trouble moving it.

The Nike Off White trend right now is definitely off the charts. Needless to say, the Jordan 1 Off white Chicago’s is the best example. Released just last year and the resell price on them shot up almost 10x the retail value. Keep in mind this happened in only 9 months and even at a high re-sell price, people are still buying pairs which is a sign that people aren’t just asking for sky high prices and pairs are just sitting. Even the not so great models such as the Zoom Flys are slowly creeping up. Had I known I would have copped a few more pairs when prices were almost half when many pairs were available when they first released. Needless to say now, any off white pair you can secure on release date is almost a guaranteed profit.

From Nike’s perspective, they’re not here to make money from just the Off white hype and demand. They are hoping this demand from consumers would translate into other models that they make vastly available to the public (ie. General releases). The amount of money they make off limited releases is minuscule because they can’t make vast quantities of it and at the same time they have to remain in line with a reasonable retail price. From a bottom line perspective their margins are similar to GRs, but they can’t benefit from the volume. In turn, they’re hoping that if the end consumer can’t get the Off whites, they will settle off their other general releases where volume is limitless. The Virgil touch on the Nike vapormax is a good example. The vapormax is a relatively new model introduced in the last few years and one of the hardest things to do for companies like Nike is earning consumer demand for new product designs. Nike looks for collabs with artists on new models to bring energy and recognition for their new products. As the vapormax becomes more adaptable by consumers, Nike comes in and pumps many different GR colourways to the market and non-hypebeast consumers start buying because now they recognize. Ladies and Gents, there you have it….Nike’s business model in a paragraph.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s