Entrepreneurs make billions in sneaker resale market, build collectible kicks empire
Sneaker resale market expected to generate $30 billion globally by 2030
If you’re a sneakerhead, then you probably know there are billions of dollars worth of opportunities up in the "air" for grabs within the sneaker resale market.
By 2030, the industry is expected to generate $30 billion globally, market experts at Cowen predicted earlier this year. Select designs, such as Nike’s 2007 limited-edition "Freddy Krueger" Dunk Lows, can have a resale market price anywhere from $40,000 to $95,000.
Some young entrepreneurs have kicked their sneaker hobby into full gear as the sector outperforms the traditional e-commerce marketplace, fully realizing their investments as a growing "asset class." John Mocadlo, co-founder and CEO of Impossible Kicks, recently added a million-dollar batch of exclusive sneakers into his company’s private collection.
One of Impossible Kicks’ newly acquired sneakers - called the "What The" Air Jordan 1’s, with just 17 pairs made to benefit a children’s hospital in Portland, Oregon - now resale for a whopping $140,000.
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"We're the largest brick-and-mortar resale company in the country. We have 17 locations, it's our first full year open, we're to do more than $50 million in sales," Mocadlo told FOX Business’ Lydia Hu on Monday. "We were so excited to get this million-dollar collection. We're going to be able to bring it to all of our customers who can acquire these asset-class sneakers."
Nike has successfully cornered the sneaker resale market, with their brands making up the biggest share of all global retail sneaker sales at more than 27%. Air Jordan and Dunk Low styles have gained secular "streetwear" popularity, reselling at both affordable and luxury price points.
Take the Nike Dunk Low Retro "Black White Panda" colorwave, for example, which can be bought at a reasonable $167 (MSRP $100). On the other hand, high fashion collaborations such as the Dior x Air Jordan 1’s (MSRP $2,200) or Off-White Dunk Lows (MSRP $170) can resale for more than $15,000. Resale prices ultimately depend on desired shoe size and product line availability.
While some buyers choose to wear and show off their fresh - yet pricey - kicks, others treat the new "asset class" like art, to be displayed in an office or at home. The general rule of thumb is models with the fewest pairs produced tend to be most expensive, according to Mocadlo.
"For example, Nike couldn't get the licensing from Warner Brothers, so [the Freddy Krueger Dunks] had to all be destroyed," the Impossible Kicks CEO said. "So there are some surviving pairs that were able to be existed, and we actually have one of them."
Leading resale platforms such as StockX and GOAT have achieved billion-dollar company valuations by serving as a sort of auction house for not only sneakers, but a variety of asset-class fashion items including purses, couture fashion, electronics and even trading cards.
But Nike previously cried foul over these third-party resellers, going so far as to sue StockX in New York federal court this past February for selling unauthorized images of Nike shoes as part of StockX’s non-fungible token (NFT) line. Nike said StockX's NFTs infringe its trademarks and are likely to confuse consumers. Its lawsuit asked for unspecified monetary damages and an order blocking their sales.
Some sneakerheads have criticized Nike for essentially gatekeeping the supply of its sneakers with small production quantities and selling the shoes at market prices exclusively through its lottery-based "SNKRS" app, which Nike has admitted is infiltrated by bots.
In October, Nike updated its terms and conditions on the app, indicating its keeping a close eye on resellers and the use of bots. According to a Wall Street Journal report, the sneaker giant’s new rules allow the company to cancel orders placed with automated ordering technology, charge restocking fees and suspend accounts it determines are buying the products with the intent to resell.
Nike did not respond to Fox News Digital’s request for comment regarding the company’s efforts to identify and prevent bots and resellers from purchasing apparel on Nike’s website and apps.
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Despite the difficulty and shocking price tags on some of these collectors’ sneakers, the Impossible Kicks co-founder says customers of all ages walk out their door with fresh kicks from all price ranges.
"You'd really be surprised," Mocadlo said. "We have a lot of celebrity clients, a lot of influencer clients. Our clients range from 13 [years old] to 63 and even up from there. People are starting [to buy] anywhere from $200, going all the way to this $90,000 pair of sneakers right here."
FOX Business’ Blake Brittain contributed to this report.