StockX is accused of selling fake Jordans. Nike sued the marketplace over their release of an NFT series of Nike shoes, accusing them of using the company's trademark without permission.
Conspiracy theorists in the sneaker world have begun to theorize as to why the sneaker brand has entered litigation with the resale marketplace. Nike is building a foundation for its own platform.
The idea of a Nike-owned resale marketplace specifically for Nike products is very intriguing. It has the potential to disrupt the sneaker aftermarket and is beneficial for the brand.
Sneaker brands have been around for up to 50 years. The explosion of the sneaker business in the last six to seven years would not have been as strong without the likes of Flight Club and Stadium Goods. Sneaker brands are able to impact their businesses in two ways: flood the market with products and bring down demand for shoes, or establish their own secondary marketplace.
Nike has everything in place to launch a secondary marketplace of their own that could bring great benefits to both the brand and consumers, from warehouses to the team that would build that technology.
Nike called itself a tech company with the development of Nike Fit, a scanning solution to find the best shoe fit. Intervex is based in Tel Aviv. Nike went on to purchase the company and expand their digital talent, thus having highly specialized personnel to add a marketplace to the range of digital products.
A Nike-owned resale marketplace could be an extension of the Nike app as a place to buy and sell used or dead stock. It would be more similar to GOAT or eBay than Stadium Goods.
The data is the greatest benefit of establishing the secondary market. Gerald Flores is the former editor in chief of Sole Collector and senior creative strategist at Bleacher Report. The value of the sneaker is what drives the resale. Is it just numbers, or is it done by a specific designer or athlete, or is it on this silhouette?
With the majority of profits off of products being made on the initial sale, this data could help them understand how much to produce or re-release and fine tune products for optimal initial sales, but also dial back on products that just sit.
The initial Yeezy releases sold out quickly and at times for more than a thousand dollars on the resale market. In order to allow for more people to purchase the shoes at retail, West and Adidas released larger runs of the shoes. The resale value is just above retail even though new releases sell out occasionally.
Nike would have hard data to do this across multiple silhouettes and have footing in the resale market without completely killing the demand for their sneakers.
With Nike having a reputation for superior storytelling in the sneaker space, this could easily be spun into avenues for branding around sustainable practices. It would be possible to tie historical Nike stories into viral moments that drive hype and drive resale that the resale platforms aren't doing.
They’re wholly missing out on a multibillion-dollar industry that may not be sustainable without them.
It isn't often a real-life event or pop culture moment that moves the needle in the marketplace. The sudden and unexpected passing of Kobe Bryant, the airing of the Michael Jordan documentary "The Last Dance," and the husband wearing Dior Jordan 1s to Joe Biden's inauguration caused substantial volatility in the marketplace.
The release of the doc increased stockX sales by 40% and Jordan sales by 40%. Kobe Bryant sneakers that were going for $750 on the resale market were being listed at $12,000, while the Dior Jordans saw a 200% increase in bids.
smart and successful companies are only going to let others profit off of them with little benefit for themselves for a long time.
Nike may benefit from the hype built around their products on these resale platforms, but they are missing out on a multi-billion dollar industry that may not be sustainable.
They could make more money on the initial release by using the data. Nike doesn't need to make a lot of money from resale transactions. All of the other marketplaces have transaction fees that are higher than Nike's.
How StockX became the stock market of hype
If Nike were to announce their own resale marketplace, they might wonder if they will be marked as sold out and listed on a resale platform. It could make consumers think that the brand would always make money.
He says that they will get mad for a second and then they will get over it. Users come back over and over again despite the unpleasant experience of getting a hold of high-heat products via the SNKRS app.
Consumers stand to benefit from Nike not having to approach this marketplace for financial gain as much as it is to gain more control and understanding of their place in the market. The shoppers could see a decrease in total resale prices on a brand-owned marketplace.
Shipping costs could be lowered with Nike's existing network of warehouses. If the brand chose for a smaller percentage than StockX, Stadium Goods or GOAT, the brand would make more money on each transaction on the marketplace.
Which would you trust more to sell you authentic sneakers for resale — a platform that has to figure it out or the brand that released the shoe?
The greatest benefit for both buyers and sellers would be the ability to verify their purchases. Flores said that you wouldn't get a fake pair of shoes.
StockX said they have a 99.5% success rate, but that.5% still makes the community suspicious. They have had to develop a 100 point checklist for their authenticators that is constantly evolving for each brand and each silhouette, and other resale platforms have to take on this challenge alone.
Scott Cutler, the CEO of StockX, criticized Nike's manufacturing and reinforced his team's practices in an interview with CNBC. Over 41,000 Nike products were rejected last year due to manufacturing defects. We're looking for products that meet our higher standards.
Is it better to sell you authentic sneakers or not? There is a platform that has to figure it out. Buying and selling on the platform are concerned that the platform is selling fakes.
It will be a blow to the other resale markets. The broker in the middle is being cut out in order to make them more trustworthy.
It could bring Nike consumers unfamiliar with the resale world into it because of their reach through other digital Nike spaces.
I buy directly from the Nike app nine times out of ten. Flores said that he uses the Nike running app, SNKRS and the Nike training app. There is benefit for the consumer in that it is all within the same system.
If Nike were to establish themselves as the only place to resell Nike gear, platforms such as GOAT, StockX and eBay would suffer a lot of business.
The snapshot of the prior year is released by StockX. Four out of the top five sneaker silhouettes were sold by Nike and Jordan Brand. The most popular sneaker brands on the platform were held by both brands.
While retailers like Foot Locker and FarFetch buying into the space via GOAT and Stadium Goods, respectively, seems like a smart move as retailers get their foot in the door of the resale market, it hasn't changed the consumer's experience Since the commodification of reselling sneakers pushed the sneaker industry into a $79 billion industry, a brand-owned secondary marketplace is the most disruptive.
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