Business

The booming business of Sneakers and why customers find investing in them better than gold

It all began with the buzzword ‘athleisure’ when Sneaker culture was an underground street culture. After the track pants became a popular sight at workplaces, it was followed by sneakers. You would spot many CEO’s sporting a pair of a sneaker with a formal suit and looking chic. Social media influencers blurred the lines between aesthetics and performance and that’s when the sneaker culture became a worldwide phenomenon. Fast-forward to a few years later, it has become a full-scale mainstream business. The sneaker industry is Projected to be worth $95.14 billion dollars by 2025. This sneaker mania has to lead to an even faster-growing resale market. Kids as young as 15 years old have made a fortune from getting their hands on high-demand, limited-edition sneakers and are flipping them for profit.

When it comes to investment, sneakers is definitely not the first thing that comes to anyone’s mind. But according to research, some sneakers may have a better return on investment than gold. Some limited edition sneakers have a resale value more than 50 times their original price. For example, Air Yeezy 2 Red October retailed for $250 in 2014 and are now worth somewhere around $5,600. Who knew a shoe could beat the return of America’s top companies.

The trick is to get your hands on them at cheap retail and later sell it for an inflated price when the demand goes up. Brands like Nike and Adidas make the limited editions available through a raffles system as they randomly select lucky buyers who purchase the shoes at the introductory lower price. Because everyone wants to make profits on their sneakers, they go out of stock in no time. This also leads to increased demand for sneakers. People are willing to spend 4 days, camping outside sneaker stores and making connections with store managers to make him save a pair for them. People even go to the extent of writing computer programmes to hack online store systems on release days.

Because of this massive rise in the sneaker culture, Hip-Hop stars such as Kanye West, Pharrell Williams, Rihanna made the jump from merely representing sneaker culture to actually designing and marketing their own signature sneaker lines. Pharrell Williams collaborated with Adidas originals and Rihanna, on the other hand, came out with her Fenty collection with Puma.

Kanye, who’s designed sneakers with Louis Vuitton and had a successful run with Nike, but finally chose competitor Adidas to have his full-fledged sneaker line. Adidas gave him much more creative control. His Yeezy collection has been the most wanted since it has been released. The resale price of  Air Yeezy 2 Solar Red is $4002, which was originally $250. The return on investment on this particular shoe is around 1501%.

Other than reselling sneakers, people like The Shoe Surgeon are re-inventing the classic sneaker. The Surgeon studio was Founded by Dominic “The Shoe Surgeon” Ciambrone. Built to inspire creativity, further the industry and push the unique and timeless craft of custom shoemaking and design. Dominic reinvents sneakers using exotic leathers, knits, gold foils, etc to make a one of a kind shoe for his clients depending on their demands. His clients include A- list celebrities like Justin Beiber and DJ Khaled. His shoes can cost somewhere around $3000 – $7000 depending on the design. Since his shoes are one of a kind, the resale value is unimaginable.

As we’ve seen, the resale market has gone from a niche, sneaker collectors, enthusiasts-only space to a multi-billion dollar market and with so many marketplaces available to list products, the sneaker-craze is here to stay.

 

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