
Buy Low-Tops, Sell High-Tops: StockX Sneaker Exchange Is Worth $1B - NN88
https://www.nytimes.com/2019/06/26/technology/trading-sneakers-stockx.html
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jasode
I wonder if most people buying sneakers as "art collectibles" realize that the
shoes suffer inevitable disintegration and crumbling called _polyurethane
hydrolysis_ [0][1].

I just learned of this phenomenon last month. I had some brand new unworn
shoes that I had meant to donate to a children's home but I forgot about them
in a closet for 5 years. When I finally dug them out, the soles were
disintegrated. A complete waste of $150.

Unless you store the shoes in a special climate controlled jar, it really
seems the only use for buying is to _actually wear them_ before the ticking
time bomb makes them worthless.

[0]
[https://www.google.com/search?q=shoes+polyurethane+hydrolysi...](https://www.google.com/search?q=shoes+polyurethane+hydrolysis&source=lnms&tbm=isch)

[1] some Nike Air Jordan examples (open in new tab to not break the Back
button): [https://solecollector.com/news/2016/10/worst-sneaker-blow-
ou...](https://solecollector.com/news/2016/10/worst-sneaker-blow-outs/nike-
air-force-180-high)

~~~
will_brown
Maybe Satoshi should have built in such a feature into bitcoin (you don’t use
it you lose it). That would have been a much more interesting dynamic (maybe)
insofar as the original concept of P2P cash which morphed into digital
gold/store of value (ie no incentive to spend, create a market/economy).

~~~
chipperyman573
Because bitcoin is inherently anonymous, it'd be very difficult (impossible?)
to prevent someone from making a new address and just bouncing the coins
around. It's an interesting idea, though.

~~~
petronio
I think that's fine, because then you know that at least the wallets still
exist. I wonder how many bitcoins are forever gone from the early days when
they were literally cheaper than dirt. I know I had some and failed to backup
the wallet properly.

~~~
mhh__
There's several million £s worth in a landfill site in England somewhere

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alistproducer2
Shoes were never engineered to be collectables. After a couple years the glue
fails and your "investment" is worthless. I had a friend who was really into
this and he had a huge collection. Needless to say he was pretty pissed when
he opened the boxes and found his shoes falling apart.

~~~
xzel
I mean he doesn't sound like much of a collector if he didn't know how to
protect the shoes. Sealing them airtight helps and so does removing water as
discussed in other comments. Almost everything that people collect needs some
amount of protection.

~~~
alistproducer2
We're not talking decades so I don't think he was being unreasonable. Most
people would expect a product that has been kept in a box in climate
controlled conditions to, you know, not fall apart after a couple years. Get
off your high horse.

~~~
xzel
Yeah they don’t fall apart after a couple of years. After 20 though those
earlier plaits weren’t made to the same standard with the same material. Get
off your ignorant horse?

------
forthwall
I think another interesting market to come out of this is an easy place to
find second-hand trustworthy unused shoes at prices lower than retail.

Take for instance these Nike Gyakusou Zoom Pegasus 35 ($200)
[https://www.nike.com/t/gyakusou-zoom-pegasus-35-turbo-
mens-s...](https://www.nike.com/t/gyakusou-zoom-pegasus-35-turbo-mens-shoe-
krvlzj)

On StockX you could purchase them for 120$ [https://stockx.com/nike-zoom-
pegasus-35-turbo-gyakusou-fir?c...](https://stockx.com/nike-zoom-
pegasus-35-turbo-gyakusou-
fir?currencyCode=USD&size=6.5&gclid=CjwKCAjwr8zoBRA0EiwANmvpYF_Wh6TkLncQ-
FnlkTnF_X2QhtE7mHbLgMLvNB6Nasz3xx_BKkT_HxoC8CcQAvD_BwE)

I definitely do not think this was the intended use of StockX but I feel like
this is an unique value proposition for bargain hunters.

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acconrad
Collectibles are a tough market because you can't predict what will continue
to be valuable in the future (i.e. art, sculpture, watches) vs what is
ephemeral (i.e. Pogs, Yu-Gi-Oh cards).

I genuinely don't know: were people trading sneakers in the 80s? Or is this a
recent (read: temporary) phenomenon?

~~~
benj111
I would predict toys become collectible roughly 20-30 years after their
heyday. Ie when the kids have grown up and want to relive their childhood.

So that would make pogs due imminently.

Mistakes (on coins and stamps) is a reliable indicator, actually my dad has a
blue thunderbird 2. Most tvs were black and white, so they didn't know what
the colour was, or didn't think it mattered.

Then you have the famous flops. That ET Atari cart is probably quite valuable,
same for the Sinclair C1.

~~~
whermans
The Atari ET cart is an oddity: it was a huge flop, but _vast_ amounts of
carts were produced before that was apparent, so you can still get a good one
for under $20.

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rambleraptor
It's really cool to see a unicorn come out of Detroit. The area isn't known
for tech, despite having the largest concentration of engineers in the
country. Hopefully, more startups like StockX and Duo Security will shine
light on the area as a tech hub.

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mooreds
I enjoyed this podcast with the founder of stockx a few years ago:

[https://www.econtalk.org/josh-luber-on-sneakers-
sneakerheads...](https://www.econtalk.org/josh-luber-on-sneakers-sneakerheads-
and-the-second-hand-market/)

~~~
pizzabearman
Really good podcast, you thanks for recommending

------
gen3
I'm not a sneaker head, but love a good deal. I bought a pair of Adidas for
80$ less then retail from stockx and they are my favorite pair of shoes!
Overall I was a pretty happy customer, I hope they can maintain quality.

------
whalesalad
Got a tour of their office in the Compuware building a while back while
interviewing for a position at Quicken. Pretty cool place, but probably a
brutally chaotic environment to actually program or get shit done.

~~~
ralmidani
I applied for a web dev position there after a very enthusiastic
recommendation of me from a bootcamp cohort colleague. When I interacted with
their recruiters, they were very polite.

I was given a few days to complete a take-home challenge, and went above-and-
beyond to include persistence and real-time functionality. Weeks would go by,
and when I would inquire about the status of my application, I would be told
nobody got a chance to look at my code/application. I don't blame the
recruiters, but it does seem like your suspicion about the place being
"brutally chaotic" is spot-on. My colleague left after a few short months to
work as a freelancer.

~~~
jahlove
Those take-home tests are bullshit. You put all that work in it for free, and
they can't be bothered to follow up. Maddening.

~~~
harry8
They'd be fine if employers paid for the time. Then they waste your resource
as their expense. Right now they have no incentive at all to treat applicants
resource with any respect. So you get this, which is utter and total contempt.
Failing to look at it is actually fraud or theft. The deal they strike is you
do this unpaid work to help us hire you. If they don't look at it they have
broken that deal and should face consequences.

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lotsofpulp
And I’m over here searching old emails for names and sizes of shoes I’ve
already bought so I can buy them again, to avoid having to shop for shoes.

~~~
jonlucc
Beware. I've done this recently. I purchased a previous pair of Merrills from
their own website. I recently re-purchased the same model, color, and size
only to find that they are uncomfortably tighter now. I'm not sure if they've
changed the process in some way or there's just that much variation between
shoes of the same sort.

~~~
lotsofpulp
Yes, I’ve experienced a lot of products with cuts in quality and volume in the
past few years as input costs and labor costs are rising. Not saying Merrill
is reducing quality, but things are in flux.

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dmix
Seems like a whole lot of selling high.

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blantonl
1B valuation for a clearinghouse marketplace for sneakers. Jeeze...

Is this our generation's cabbage patch kids and beanie babies hype enabled
with a little less friction due to technology? Because if it walks like a
duck, and quacks like a duck...

This clearinghouse better be vacuuming up a ton of nickels to eventually give
investors a return on their investment.

------
benj111
So what's to stop shoe manufacturers basically flooding the market with
collectibles, or china, or wherever catching on and producing fakes of the
originals.

This doesn't seem to have the traits you'd want from an investment.

~~~
Pavarotti
Nothing, This is currently quite a common thing with factories in china
producing these on mass. Check out the subreddit repsneakers the
fakes(Replicas as they call them) even come with StockX tags for reselling
online as authentic.

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xenospn
Hey remember 1999?

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googoogaga
>The hobby took off and this year, he expects to move 10,000 pairs of shoes.
His anticipated take is a 25 percent profit from over $1 million in sales.

$250K profit, $1M in sales, $1B valuation. Lol. Can't wait until this useless
company fails miserably. Obsession with thousand dollar "streetwear" and
"sneakers" is beyond pathetic. Usually you'll find the people most interested
in this dogshit are the people who can afford it the least. Obsession with
consumption-based "hobbies" like this is the mark of a cookie cutter.

~~~
changdizzle
You realize this is talking about one of the sellers on the platform right?
Not the platform itself.

Looks like GMV is actually ~1.2B/year and even at a conservative 10% profit
margin, they're pulling in at least $120M/year.

"The company said its revenue more than doubled in the last year, with gross
product sales topping $100 million a month. It has expanded into streetwear
and luxury goods like handbags and has more than 800 employees."

~~~
knd775
The transaction fees on sneaker sales (by far their largest segment) are
between 8% and 9.5% depending on seller volume. Since StockX authenticates
every shoe, that eats up a bit of that fee. The point of your comment mostly
still stands, but I wanted to mention some real numbers.

[https://help.stockx.com/articles/478556-what-are-stockx-
sell...](https://help.stockx.com/articles/478556-what-are-stockx-selling-fees)

