Luxury sneaker markets are a preview of Capitalist Dystopia:
Buyers now use bots to automate sneaker purchasing to ensure they’ll get as many pairs as possible to resell on online sneaker marketplaces like StockX and GOAT. Retailers, meanwhile, have sought to guard against such bots through raffles, leading to a proliferation of raffle bots. Raffle bots will automate hundreds, if not thousands of entries. Bots themselves are sold and resold for thousands and created in limited supply to ensure they remain effective in an ever-more competitive purchasing arms race.
Consignment and resale stores are the result of side hustles becoming a primary business — one that’s now profitable enough to exist in retail space. Successful buyers market their own guides on sneaker investing. News articles hold forth on the value of kicks in investment portfolios. Enthusiastic YouTubers giddily sound off on whether or not you should “sit or sell,” claiming to possess insight on the potential long-term value of sneakers.
If you can master the tricks of the trade, it’s highly lucrative. Effective resellers can pocket hundreds of thousands of dollars. The terminology of sneaker resale markets offers a more urban version of the language used by Wall Street banks and investment firms.
[...]
Consumers of rare sneakers range from collectors who will display their trophies and keep them as “deadstock” — industry lingo for shoes that are never worn — all the way to simple enthusiasts and those disparagingly referred to as “hypebeasts” — people who covet, wear, and obsess over every new release as a display of wealth.
The global sneaker resale market is valued at $2 billion and expected to triple in the next few years, reaching $30 billion by the end of the decade. This fall, StockX opened its first Canadian warehouse, another expansionary step for a global corporation already valued at $1 billion.
The problems with the ‘luxury sneaker market’ stem primarily from it not being a *market*; if it was, ‘bots’ would be irrelevant. Sneakers would be sold at the price that clears the market, using an auction if necessary, and ‘sniping’ would be irrelevant. No scalper is going to buy at the auction to then pay shipping and overhead to resell it to a later buyer at a lower price. They all could be wiped out in an instant if the original sellers in question ever wanted to bother. It’s not like it’s some great mystery. ‘My goodness! Some scalpers sniped the new GPUs – again! No one could have foreseen this.’
Just like with Ticketmaster or GPUs, the stable long-term existence of scalpers is solely because they don’t dare sell at the actual price, and rely on non-price mechanisms. Why is that?
Because the psychology of luxury sneaker collectors is anti-market – if Supreme sold its swag at the market price, that wouldn’t be *cool*. And if it wasn’t *cool* you couldn’t lord it over your peers or show off your collection.
It’s not capitalist dystopia so much as capitalist utopia: what happens when people have so much surplus money they’ll pour it into status games. No one needs a luxury sneaker, or is going to starve to death because they were forced to buy an Air Jordan instead of bread.
It’s silly when you look at it from the outside, but people find it of value, and so even the bot operators and YouTube hustlers and ‘exchanges’ are providing a useful service by fixing the markets that the luxury brands are intrinsically unable to be seen to fix lest it dirty and pollute their cool by trafficking with mere grubby commerce. (See for example the Ticketmaster scandal where the pure ethereal artists got a cut of the tickets sold at the actual prices while Ticketmaster – that evil faceless soulless corporation! – took the blame, thereby preserving the artists’ reputation for being about art, not ‘screwing over their fans’.)
$30 billion market in a decade? The developed world economies will collapse well before then.
Happy New Years!
“The global sneaker resale market is valued at $2 billion and expected to triple in the next few years, reaching $30 billion by the end of the decade.”
Wasn’t this said about Iridium satellite phones?
“It’s not capitalist dystopia so much as capitalist utopia: what happens when people have so much access to leverage that they’ll invest it in status games. No one needs a house in a nice neighborhood, or is going to starve to death because they were forced to buy medical insurance instead of bread.”
Exactly.
“No one needs a house in a nice neighborhood”
After your third or fourth break-in in a not-so-nice neighborhood, you might see things differently.
As Steve Sailer put it back in 2009:
“The chief problem with being poor in 21st Century America is not that you can’t afford to buy enough stuff, it’s that you can’t afford to move away from other poor people.”
What’s the difference for stamp collecting or art dealing?