Selling Sneakers and Swooshes

EconTalk Extra
by Amy Willis
Josh Luber on Sneakers, Sneake... James Heckman on Facts, Eviden...

Are you a sneakerhead? Have you organized a portfolio of your collection? (Did you even know you could???) This week, EconTalk host Russ Roberts sat down with the foremost expert on the secondary sneaker market, Josh Luber. They talked about the process of data collection, "deadstock" and the composition of this multi-million dollar secondary market.

As always, we'd like to hear what you took away from this conversation. So please share your thoughts with us in the comments, and let's continue.

1. Luber talks about his process of transitioning to full-time work on Campless, and his plans to launch StockX. What does he mean by a "stock market of things?" How does this comport with the traditional idea of stock markets? Can you think of other "things" that might benefit from a platform like StockX?

2. Luber notes the market power of Nike, even in the secondary market, 96% of which consists of Nike shoes. What gives Nike such cache? Should Nike be considered a monopoly? Why or why not?

3. What's the difference between "sold for" and "listed for" in markets like StubHub and eBay, a distinction Russ found fascinating? Have you ever been tricked by this difference? How? (Bonus: How does Luber suggest that StockX will rectify this, and to what extent do you think they'll be successful?)

4. I found this episode fascinating...What about it most fascinated you? (I'll share in the comments, too!)

COMMENTS (3 to date)
Onlooker writes:

I'm still truly mystified that Nike can't more closely match supply/demand/price and therefore make more money. But I also realize that they're not neophytes and have surely not left such easy money on the table. Very interesting phenomenon here.

And I found it interesting how Josh made the argument that the sneaker market won't implode like so many others have done. I'm sorry but it sure sounded like some self-delusion by a person caught up in a bit of a craze. He sounded a lot like the National Association of Realtors spokesman in 2005. :-)

Mike F. writes:

My nephew bought three pairs of sneakers with the intent to sell them on eBay a year or two ago. I thought he was crazy. I had never heard of this. He sold one of the pairs within a few weeks. I think he got stuck with "excess and obsolete" on the other two. I thought it was strange that Josh referred to the sneakers that had been released long ago as "seller's market" given the lack of liquidity. It seems to me like you need to turn your sneakers around pretty quickly, or you are stuck with them.

Trent writes:

As a frequent watcher of "Pawn Stars," I wasn't surprised by too much in this podcast because similar theme recur in the show.

For example, the difference between "sold for" and "listed by" on eBay. On almost every episode, a person tries to sell an object that he claims is going for $X on eBay, so they expect to get $X from the pawn shop. After a brief lecture on the difference between retail/wholesale prices, the pawn shop dealer (usually Rick) explains the difference between "sold for" and "listed by" - people can ask for anything, but what is this item actually selling for?

The pawn shop even has its own shoe expert, Chumlee (who is depicted as not having knowledge about much of anything else, by the way). They deal in the secondary shoe market on a regular basis - as I recall, there was an episode where the Las Vegas Shoe Museum was closing, and the shop had the "opportunity" to buy out the inventory at what seemed like an overvalued price...they passed.

As for the other questions, no, I wouldn't consider Nike a monopoly because there are too many other shoe companies out there (e.g. New Balance, Adidas, Sketchers, etc.) to keep them in check. It's certainly not like the local water company, for example, where you only have one company to buy from and no other options (it's not legal to drill a well where we live, nor are cisterns easily installed).

Lastly, I'm not sure about the future of StockX, given that it's getting its start on the tennis shoe collecting fad - for a while, baseball cards were the hot item, then comic books, then Beanie babies, etc. So perhaps it's a clearing house for fad items....but then why not just sell your items on eBay? It seems to me that the real service he's selling is identifying arbitrage opportunities for sneaker collectors on eBay...maybe his StockX fees will be lower to entice collectors to buy/sell on his site?

Of course, StockX could emerge into something else. After all, eBay has changed. It started as an auction site, and now the vast majority of items are 'Buy It Now' at a fixed price...more of a classic storefront/Amazon model.

All in all, another very interesting podcast to listen to/think about.

Comments for this podcast episode have been closed
Return to top