Brett Nilsen
The resale market for sneakers has been rapidly growing in recent years, fueled by a high demand for exclusive and limited-edition sneakers. However, this market is plagued with inefficiencies that make it easy for resellers to find price discrepancies and arbitrage opportunities, resulting in easy profits. One significant factor that contributes to this inefficiency is the lack of a tool to syndicate product listings across multiple channels.
Local sneaker resale boutiques often become successful by building their brands in their local communities, but they do not typically access other sales channels to address wider markets. Instead, they only hold their inventory in-store and MAYBE on their Shopify site, too. Moreover, they often do not manage each of their products individually to update their prices as the items’ market values change. This approach to pricing results in items that are not so popular in their local regions sitting on shelves for extended periods of time at the same price, while the general market value for that item continues to appreciate. This inefficiency on the storefront’s side provides a great opportunity for resellers to take advantage of price discrepancies and arbitrage opportunities.
For instance, one of my favorite Buy/Sell/Trade sneaker stores is ColaKicks in South Carolina. They have a cult following in the local community and get new inventory daily. They recently listed a brand new pair of Fragment Jordan 3s for $320 (a not-so-popular shoe in the Columbia, SC area). However, the market value for the same sneaker has risen to $350 and has very recent sales at that price, too (as seen on StockX). Furthermore, that item is currently selling for over $450 on Stadium Goods and can be consigned for $435 by anyone right now (after Stadium Goods’ 20% commission, these would clear $348). In that case, a reseller can purchase the sneaker at the outdated, undervalued price of $320 and then resell it on the wider market for the current market rate of $348, thereby making almost a 10% profit with very little effort.
These opportunities are extremely common across many small one-off locations to larger 5 location sneaker stores, but very few resellers look for them because resale shops have a reputation for pricing their products well over the market. And 99% of stores do overprice products, but sneakers will still appreciate over time, and eventually, that overpriced item will become wildly underpriced as it continues to sit.
This inefficiency in the sneaker resale market is further exacerbated by the fact that local sneaker resale boutiques often lack the resources to keep up with market trends and adjust their prices accordingly. This lack of resources means that they may not be aware of the changes in the market value of their products, resulting in outdated pricing and missed opportunities for profit. A perfect example of this is the sudden “overnight success” shoes (the ones that get featured in a viral TikTok, get worn by Travis Scott, etc.) and all of a sudden pop in value. The majority of sneaker stores do not have the manpower or technological sophistication to manually or automatically update items’ prices to align them more with the market value when these price jumps occur. Instead, these items will be ignored by the store (and sometimes even ignored by the local in-store visitors), leading to savvy resellers coming in and finding a Jordan 1 Low SE All-Star still sitting for $150 2 years after the release (I bet you didn’t know either they were that high).
In conclusion, the sneaker resale market is inefficient, and this inefficiency makes it easy for resellers to find price discrepancies and arbitrage opportunities. A lack of a centralized pricing mechanism and the inability of local sneaker resale boutiques to list their inventory across all markets contribute to this inefficiency. To address this inefficiency, we developed a tool that will sync resellers’ inventory across not only their in-store POS system and website but also with online marketplaces with eBay (and you can list everywhere in just 15 seconds).
