Heat, deadstock, NIB’s and beaters. If your teenage sons or grandsons are throwing around this slang and avoiding eye contact with you, don’t be alarmed. They’re not referring to drugs, cults or punk rock groups. Most likely, they’re checking out your shoes.
Your shoe game (or lack thereof) confers the same kind of social status with younger Millennials and Gen Z that a Corvette, Camaro or Mustang did a generation ago. Sound ridiculous? Well, pairs of limited edition sneaks are going for upwards of $20,000 this week. More on that in a minute.
As Saturday’s New York Times explained in detail, resellers of limited edition collectible sneakers generate $1.5 billion worth of sales in the U.S. alone. Much of that total is driven by a legal underground army of re-sellers called “sneakerheads” who camp out overnight or who create fast-bidding software programs (“bots”) to snag new releases of rare models from big sneaker brands. Since many of those high end “kicks” are sold in limited quantities, many sneakerheads quickly resell those shoes on eBay or reseller sites for a substantial profit. Rather than fighting the re-sellers, the major shoe brands have learned to use sneakerheads to create a buzz around their pre-release marketing strategies.
There’s even a stock exchange for sneakers called StockX co-founded by Cleveland Cavaliers owner Josh Luber, where shoe prices rise and fall like shares of publicly traded companies.
In fact, if you visit Stock X, you’ll see a scrolling ticker with abbreviated shoe model acronyms followed by dollar signs…sound familiar? We’ll get to the Cleveland connection in just a minute, but note that Bloomberg devoted an entire podcast last month to the subject–What Sneakers Can Tell You About How Financial Markets Work.
What’s more, sites like Kicksworth.com and SHOEFAX.com let you check prices or get appraisals and verify that a pair of vintage sneaks you’re interested in are actually legit. It’s just a matter of time before the government creates a FINRA or SEC to regulate the sneaker reseller market.
Still think sneaker re-selling is the purview of nerdy adolescents and under-employed 20-somethings still living with their parents. Consider this: Friday, Nike released a total of 23 pairs of Lebron (James) 14s along with another 23 pairs of the Lebron signature shoes from the NBA superstar’s rookie season. Who cares? Turns on plenty of folks do.
When the bidding war for these coveted limited edition kicks ends on Thursday, it will cost you an estimated $3,000 to $25,000 PER PAIR to get a piece of the sneaker world’s latest “initial public offering.”
I have two teenage sons who play sports video games and fantasy football leagues with as much gusto as they play on the real-life field and court. My 13 year-old Michael is especially into the sneaker reselling game. MB.Soles as he’s known in the Instagram world is on the younger side of teen/young adult male target demographic that athletic shoe companies covet. Is he obsessed? Perhaps, but he’s gaining shrewd negotiation skills, doing complex math on the fly, sweating out his receivables and learning to incorporate the latest tidbits of information into his pricing methodology. MB’s also built a larger Instagram following than many companies have and he’s learned some hard lessons about overpaying, under-bidding and doing business with strangers from all corners of the map (i.e. his footwear counterparties). If nothing else, my son is learning the real value of money by calculating how many hours of yard work it will take him to earn enough to bid on a $175 pair of Air Jordan 1 high tops.
As long as he’s not getting ripped off—or ripping people off—and keeping his grades up, then the entrepreneurial lessons that he’s learning from his hobby should last him a lifetime.
Next time you see a teenage boy staring at your feet, don’t be insulted by his lack of eye contact. He’s probably sizing you up for a sales pitch or offering you a chance to get in on the next sneaker-IPO. You might want to pay attention.
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Tags: Sneakerheads, StockX, sneakers as investment, young entrepreneurs, Lebron James, Josh Luber, Kicksworth, Shoefax, Michael Berkowitz
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