Sneakerheads hate resellers.
These opportunists are seen as nothing more than leeches infiltrating a culture rooted out of passion and nostalgia. The once niche hobby is now the mainstream, operating at a level O.G. sneakerheads could've never imagined a decade ago. It's become a huge business and resellers are going harder than ever just to make a quick come up. In fact, sneakerhead data site Campless estimates that the resell market has reached $1 billion in the last year.
While many purists in the game are calling for the likes of Nike to step up and do something to disrupt this trend, it probably won't happen. Why? Because there's too much at stake if the footwear giant, who had a revenue of $27.8 billion in the 2014 fiscal year, loses the secondary market by increasing supply or raising prices.
Resellers and the concept of hype basically represent a form of marketing for Nike. "They’re exceptionally good at keeping people hungry," equity analyst Sam Poser told FiveThirtyEight. "They understand the cool factor, and they know how to stay cool. And if they don’t stay cool they know this business dries up, because this is fashion."
Josh Luber, founder of Campless, believes keeping select sneakers limited at a strategic price point and allowing resellers to reap the benefits of aftermarket profits is a plan that makes sense for Nike. He summed up the notion on a story he ran on Campless, An Inquiry Into . . . Can Nike Get That Resell Cash?, stating "Nike cannot get that resell cash because: If Nike increases supply, it will lose sneakerhead sales. If Nike increases price, it will lose non-sneakerhead sales."
Luber also told FiveThirtyEight, "They would rather err on the side of leaving money on the table than risk disrupting the secondary market and all the marketing, brand cachet, PR and hype that comes with having a really vibrant secondary market."
