January 2022 Sneaker Resale Report & Analysis – ARCH-USA
The year-on-year comparison finally reflects the reality of what I would call Unassisted resale vs assisted resale. What do I mean by URS versus ARS? Without assistance, the process of acquiring sneakers through legitimate methods: retail purchase and arbitrage, using sneaker apps to earn elusive and more coveted pairs, buying in bulk, all legitimate without undermining the system with technology, it’s URS. ARS is using bots to seize an excessive amount of inventory of coveted sneakers. I’ve never been an ARS shopper, but while my resale numbers reflect Nike at retail, I have to express that I have access to more shoes than the average person. This is due to my involvement in reselling and strategy development for over 12 years. The average consumer in all likelihood can’t hit the numbers I can and looking at these numbers year over year from January 2021 to January 2022 it becomes apparent that I can’t hit my traditional numbers anymore either. The reasons are important for all of sneaker retail, not just resale.
Decline in sales year over year
I will certainly forget to list many of the factors that explain why the decline was so steep. It’s always better for me to report in a class with questions asked. I will do my best here. In recent reports, I argue that there are not enough new sellers to continue driving resale growth. This statement is not entirely correct. I specify that the resale decreases because I can no longer go to the points of sale and buy pinball sneakers. That doesn’t mean there aren’t new sellers, it just means there’s less inventory to carry. There are a ton of new sellers. Everyone sees the resale of sneakers as the goose that lays the golden egg. The problem is that the goose is sterile. What I have to say is that the wholesaler is dead. Before, I could walk into a store and walk away with ten pairs of sneakers a day. The same policies that have limited me to retail arbitrage have limited others. There are no less sellers. There are more sellers selling fewer sneakers, which will ultimately result in fewer sellers overall, but that’s not the point.
I saw a 72% drop from January 2021 to January 2022. January is notoriously slow, but this January in resale has been brutal. I only sold one non-Nike/Jordan Brand sneaker, the ASCIS Noosa Tri 13. I could have sold more, but policies prevented me from buying multiple pairs. There were also fewer sneakers that could be resold in stock. The consumer spends. Don’t confuse availability with declining sales. People are buying, but inventory is low on the resale and retail side. Remember I say low inventory ONLY on sneakers that are resold at retail. Stores have more than enough products. They don’t have as many Nike and Jordan branding, but the walls are filled. The stores, according to store managers, are doing well. Why is resale slow?
- Store policies limited the number of shoes that could be purchased. Regardless if the shoe is on sale, shoppers are relegated to one sneaker, one style per purchase. Dealers compensate for this when a sneaker is hot by walking out of the store and returning with cash to make more purchases. (I agree, it’s clunky. DMs and auditors review the transaction to make sure managers are adhering to company policies.) Resellers also work as a team to compensate for this.
- In-store raffles on apps weren’t as plentiful, and with more stockists trying on sneakers that will be resold, winning a raffle is more miss than success.
- Fewer “resale” styles available means fewer sales. The shoes are not on sale. Those using the arbitrage model cannot find enough profit even on the few markdown shoes.
- Store managers allow their employees to buy sneakers that are not picked up in the raffle. Dealers fight employees for sneakers. (I’m adding a section below titled PSX, before StockX to explain how resale has changed due to employee purchases.)
- Sneaker stocks readily available last year are extremely low this year. In the next section I’m going to list my best selling sneakers and it will be obvious that even with the connections I have to buy (Memphis has a lot of people trying to resell and failing so I get a ton of consignment) the availability of sneakers even in my consignment chain, is low. It’s because there are even more people buying the same way I always have. I could say it’s a symptom of my hope to be able to build a version of Stadium Goods or Flight Club. I trained many people Pre-StockX. These people learned and instead of sticking with me to help build a multi-million dollar business, they left to build their own thousand dollar businesses. Over the years I have spawned at least 20 dealers, the teaching has come back to haunt me in this business.
January is for fitness
The post-holiday sales model is still skewed in favor of fitness shoes. While larger analysts view classic Nike shoes like the Huarache and Air Max sneakers as casual, the reality is that the everyday consumer uses these shoes for fitness. That’s not to say the usual suspects haven’t shown up. The Air Jordan 1 in its variety of flavors remained the top-selling sneaker, along with the Blazer and the Air Force 1. After those three pairs, the entire roster was built on performance.
Average selling price/pre-stockX Discussion
This is perhaps the most interesting section. Because trendy sneakers were not readily available, I used a different strategy on StockX. This strategy allowed me to be more patient on sneakers that no one would usually associate with resale. The resale price has been trending down for years, but I have to wonder now if it was because I had access to more products? It’s not rhetorical. The answer is yes. For me, when sneakers are plentiful and easy to get, my strategy is all about speed. When inventory isn’t as readily available, the strategy is patience, even on unhyped sneakers. I understand this because I had been on Amazon for so long, but never really gave StockX a chance to see if it could be more like Amazon. What do I mean by that? At retail, shoes are stored and when people shop, they buy. Pre-StockX reselling was built around searching when you couldn’t find the product that was selling fast. While I said the consumer on StockX is changing, I did so based on speed and the assumption that the StockX consumer would not spend retail on unhyped sneakers.
Average sale price January 2022: $120.95
versus | eBay, Amazon, or StockX RRA September 2021 Part 2: Number of Sneakers Sold and Average Price – ARCH-USA
Last fall, when I used Amazon for a short time, my average price went up. You can find this number in the link above. Why is this important? Amazon resale prices are much higher, but selling there takes risk and patience. Pre-StockX using eBay and Amazon generated higher resale, but after this January I see StockX really becoming a bigger platform with some consumers similar to Amazon. The StockX buyer will buy sneakers at retail, around and above on sneakers you wouldn’t expect. In the top 10 shoes sold, I have the Pegasus listed with 4. Another sneaker that sold 4 pairs was the Jordan MA2. I also sold the React SFB Carbon Low, the Little Posite One and the Jordan Series .01. Based on my yearly breakdown of price tiers, if I were to predict where I sold the most sneakers in January by tier, I guess it was between 100 and 150:
My guess was correct. With an average price of 120, that’s obvious, but compared to 2021 overall, it bodes well for margins and to be honest, it bodes well for StockX as a market. The problem is that I am a single seller. My inventory is not built like most people who go into resale or most people who buy wholesale for their stores. Most stores, without Nike accounts that operate on consignment, will never accept the top 4-10 sneakers I have on my list. They just don’t want it. They only want Air Force 1s and Jordans. This may be a space I only operate in for StockX, which is why I was able to work this way.
There are several ways to process this data, but it would require specific questions to dig deeper into the numbers. If you would like to request a consultation to review the information in more detail, here is my consultation button:
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