Let’s start with a question,
What made you buy your first pair of sneakers in childhood?
- A: Dad’s gift
- B: Friend had it, so should you
- C: Sports
Now, in 2016, what made you buy your new pair of sneakers?
The possible answer can be
- A: Building portfolio for reselling market
- B: Your favorite sports player launched a new shoe (UA Steph Curry 3 maybe)
- C: You’re a SneakerHead
Notice the drastic change in the choices?
All of this started decades ago when brands like Nike and Adidas started collaborating with the best athletes in the business to market their sneakers and build a solid brand identity. That ‘s also how a new tribe of shoe collectors called the Sneakerheads came into existence.
Sneakerheads – people (fanboys) who collect sneakers
Sneaker collecting is a hobby that started in the 1980’s with the growth of hip hop music and the emergence of Michael Jordan and his eponymous Air Jordan line of shoes. These sneakers from various brands are cheap and range in the price of general sneakers, but for the rare ones – there is a whole market for that one. If you want something new, crisp and hot in the market; you need to forget the $100 price tag for the top-of-the-market premium Sneakers.
About 1200 people die over sneakers every year – GQ
The U.S. market has a major influence around the world in deciding what’s “cool” and what isn’t. For many young consumers, that means the brands they see their favorite athletes wearing. Statistically speaking, in 2015 alone, the athletic footwear industry in the US grew by 8%, generating $17.2 billion in sales! Nike’s line of Jordan sneakers alone, which retail for around $100 to $200, boasted $2.6 billion in US sales in 2014!
But how does the Greater fool theory apply to the Sneaker Industry?
Note: For the uninitiated, The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.
Resale Value –
Every shoe has a story. And stories never get old.
2015 and 2016 were the years of positioning the product on premium brands and storytelling over everything else. Check out the 13th edition of NIKE FREESTYLE program that invites patients from OHSU Doernbecher to design footwear and apparel, allowing their creative impulse (and love of sport) to shine.
Here, if the product is limited, it will eventually become a premium sneaker, and if them sneakers were made for a mass buyers, it will have relatively low cost just like any other sports shoe in the market. This is why, in the world of a sneakerhead, date, quality, story attached to it, and its less availability are the deciding factors for premium colleter sneakers.
But, the retro snickers or the vintage ones from 80’s and 90’s are the real deal. In 2013, the shoes that Michal Jordan wore during the “Flu Game” in the 1997 NBA Finals was sold for $104,765. Then in 2015, the earliest NBA-worn shoes of Michael Jordan’s that have never come to market have sold for $71,553. This pricing is can be the reason why sneakerheads hate resellers, as they are the ones who drive marketing, PR, and improve the brand cache.
The market size of resale sneakers is pretty big too. The Financial Times reported that the sneaker resale market has reached an estimated $1 billion in sales.
For example, if you are able to buy Adidas Yeezy Boost 350 Turtledove for the starting retail price of $675 back in 2015, you will have a resale value of $2,715 in 2016. That’s 55% higher than the original cost. But to secure the early bird sneakers from the retail store, people have stayed in line for more than 3 weeks. And the new iPhone launch line you see in the news every year, Nike sneaker lines happen 104% more often times.
So how much Sneakers re-sellers (customers) make?
For this, let’s look at one of the ted talks of Josh Luber, CEO of StockX – The world’s first online consumer stock market for in-demand snickers.
The resale market as we know is approximately 1.2 billion for the year 2015.
According to StockX, Nike and air Jordan comprises about 96% of that resell market of that 1.2 billion sales.
So, that resale profit is 33% of the customers or the re-sellers who collect sneakers.
This means sneakerheads made $380 million dollars on selling Nike and Air Jordan last year.
Now to compare,
Josh Luber selected Sketchers brand which overtook Adidas as the 2 most selling athletic sportswear in U.S for the year 2015.
Their yearly profit was $209 million dollars.
That means that Nike’s customers are making twice as much profit the second most selling brands and their closest competitor.
Enter – Greater Fool Theory
This theory states that buying an overpriced investment that can be sold at an even greater price to a greater fool in future.
Going along the lines of this theory, would you buy $8000 “Back to the future limited edition sneakers” and wait for somebody else to be stupid enough to pay more for what you just bought?
A sneakerhead would, and he will be in profit.
YouTube – The shoutout platform
Sneakerheads don’t need YouTube to reach their resale shops. They have private websites like Flight Club, Stadium Goods, Sole Supremacy, and StockX. In addition to pushing sales online, there are extremely successful eBay stores like Project Blitz, Soled Out NYC and super celebrity dealers like Benjamin Kickz.
But there are many popular YouTube channels with amazing sneakers content where they review, unbox, test and modify sneakers for sneaker fans who want to know what rare sneakers look like.
So, without further ado, here are the best Sneakers YouTube channels as per their viewership.
Viewership – 121,874,657
Subscribers – 714,335
Viewership – 61,481,395
Subscribers – 267,205
Viewership – 59,572,338
Subscribers – 419,641
Viewership – 54,133,514
Subscribers – 366,040
Viewership – 50,732,476
Subscribers – 243,306
Viewership – 41,698,332
Subscribers – 411,327
Viewership – 40,306,858
Subscribers – 198,469
A Sneaker Life
Viewership – 23,216,883
Subscribers – 319,864
MR FOAMER SIMPSON
Viewership – 20,633,021
Subscribers – 194,387
Viewership – 14,616,889
Subscribers – 168,277
Who is the greater fool in the world sneakerheads? Is it even ethical to add this term for sneaker collectors who sell their shoes just like how billionaires collect paintings or stockbrokers selling their stock? Do let us know what you think by commenting below.
Being an artist, movie buff and a media enthusiast, content writing is my career train. I am a proud alumni of Symbiosis Institute of Media Communication (Pune) and currently working for Vidooly.