image: StockX.com
Everyday we get to chat to a couple of customers who wonder about why the shoes are "expensive" which is a pleasure since we get to understand how customers feel about the sneaker market.
What expensive means to them is anything above retail because if you think about it, if you aren't really into the idea of the resell market then you would be thinking "why does a pair of Adidas cost more than a Gucci handbag?"
Well it all comes down to three words... supply and demand (particularly an excess of demand)!
As investopedia.com puts it, "as consumers have to compete with one other to buy the good at this price, the demand will push the price up, making suppliers want to supply more and bringing the price closer to its equilibrium".
The thing is, to create demand or "hype" around the brand, companies aren't willing to produce more of the products except through 'restocks' or 'retros' which puts pressures to push prices up.
In such an unregulated and decentralised environment such as the resell groups on Facebook, the price is ultimately determined by the consumer based on social media engagement with sales posts and feeling out how quickly other sellers in the group are able to sell their pairs.
Let's use the example of the Yeezy 350 V2 Zebras: Retail price is $350 AUD yet the demand to pay for them at that price exceeds the limited supply of 100 pairs in the Australian market. This has a direct effect on the resell market which pushes prices to up to $2500 in some case.
If we did stock Yeezy 350 V2 Zebras at retail price, we guarantee that we will have a long queue of keen sneakerheads from George Street all the way to Pitt Street looking to get in on the deal therefore most people would miss out.
This is similar to our previous drops like the Nike x Atmos Safari Air Max 1 where we sold them at retail and people lined up overnight then the resell price on Facebook groups went up to $600 in a matter of 24 hours.
When Adidas then restocked the Zebras mid-July, it increased the market supply of the good with more pairs available in Australia than the first release, which pushed prices down to $700-850 AUD in the resell market.
Compare this to the Yeezy 350 V2 Black White which had close to a million pairs on the market, the resell price stayed at $600-700 AUD ever since the release and continues to lower.
You can apply this theory to limited edition goods in general such as old comic books or luxury cars; there's not enough made in the world to meet the steadily high demand.
You can also apply it to Adidas NMD's and general release Ultraboost or even Jordans at a much smaller scale where prices go up and down at around $25 increments or even larger depending on events in the sneaker world such as a famous celebrity caught wearing a certain shoe, basketball games or anything happening in the sneaker market really.
In essence, it's helpful to learn about the resell market because it helps you gauge not only the sneaker culture and what people like, but also helps you form your own opinions of what you like as well.
Are you part of the "hype" crowd? Or do you believe there is more to sneakers than what the resellers are pushing?