Let’s take a step back for a moment and think about what’s truly happening in the market right now. If it is general public information that buying a pair of DS Travis 1 is GUARANTEED to make you money in 6 months, everyone would buy it, right? OK, now let’s just add another component to this equation by saying all the people with money that understand this fact will of course be loading up on this pair with all they got and buying all the pairs they can find at a fair price just so they can sit on it and watch the price go up. With both these contributing points, this leads to a more macro question…are we fictitiously pushing up prices so we can wait for that one sucker to pay a super rape price?
Back in the day of sneakers, there was absolutely no certainty as no one can truly guess what would actually go up in price. Scratch that… back then, not many people really cared about resell price because most things were generally affordable even if we waited and had we missed opportunities of buying a pair, as sneakerheads we’re probably forking out AT MOST double the retail price? Of course some exceptions do apply for shoes like the highly coveted pairs like the Paris and Pigeon dunks. So it’s safe to say, the opportunity cost of missing a pair shortly after release was low because we can always get it back at a much affordable price compared to today’s time.
Right now we live in a time where if we miss a release on certain models like the Travis 1s, we can kiss our dream of owning a pair good bye as prices just seem to keep going up and up and UP! What would cost you $800 to buy shortly after the release would cost you double that in less than a few months. So why is this? Is the demand for the shoe that MUCH that prices would go out of hand like that OR are majority of us just ALL doing the same thing… sitting on pairs in a storage just waiting for prices to go up. Some can argue that there’s a lot of buy and sell happening on StockX…the shoe is moving – meaning there are willing buyers willing to pay current market prices to own the shoes.
Here’s my kicker for the day. We don’t know who the end buyer is. Are the end buyers just re-sellers that think prices can go higher so they are simply stocking up at current prices OR are they truly sneakerhead fans of the shoe paying current resell prices just so they can wear the shoes. If the latter is true, then I think we are living in a very healthy market where people just simply has the deep budget for their sneakers as part of their everyday life. However, what fears me the most is if the prior serves to be true. If we are truly living in a market where majority of the buying and selling of sneakers is between re-sellers with different expectations of prices, then I worry a lot about the state of the sneaker market’s future. Why? Because re-sellers don’t have the interest of what sneakers are on their feet. Their main priority is how much money the shoe in question can make them. If prices are solely based on the fact that sneakers is just a trading commodity that no one ever wears anymore, then I fear a bubble is truly forming. Some may argue that sneakers can be classified as a collectible…but the counter argument is having 20-30 pairs sitting in a storage is not considered a collectible. At the end of the day if there is no ultimate end buyer of the shoes, then is the whole sneaker re-sell game just a game of hot potato? A game where whoever is the last to hold is the ultimate sucker. As a business you can’t just assume what’s going on perfectly today will continue indefinitely into the future. Risk assestment is a very important thing to consider…just food for thought on your lunch period 🙂