Will Luxury Sneaker Reselling Die in 2024?

pair of white Nike high-top shoes

Michael Beadling interviews Tarik Hussein and looks at the luxury sneaker resale market in Brussels that has exploded since 2020.

Walking around central Brussels in 2023, it was commonplace to see specialised sneaker shops pop-up in and around town; Six Six One, DP Drips and F5 Supply near place de la bourse.

If you weren’t a “sneaker head” or had no idea what these shops specialised in, you could be forgiven to choke or laugh at the sight of a 1500 euro price tag for a pair of Nike SB Dunk Low Pro shoes that were available in Footlocker three months ago for 120 euros.

 How is this possible?

Simple, economics.

 I spoke to an avid collector, buyer and seller of sneakers online, Tarik Hussein. A committed sneaker head, he explained to me that the price of a limited edition shoe can immediately sky rocket to more than 500% of its original value as soon it’s no longer on a retail shelf. “During confinement and the Covid 19 pandemic, I decided to begin buying and re-selling some of my old sneakers and quickly made a 200 % profit on a pair of Air Jordan 5’s I bought pre-covid.

I immediately struck gold and now its my livelihood” said Tarik. Considering the brand’s dominance in the industry, it should come as no surprise that Nike was, by far, the best-selling brand in Tariks portfolio.

Adidas and New Balance were also big sellers, along with UGGS. It’s important to note that Nike still holds the record for the most expensive sneakers ever sold at auction in 2023, when a pair of game worn 1998 Jordan 13s sold for an incredible 2.2 million dollars at Sotheby’s. The business model is not new.

For years, sneakerheads, investors, and fashion enthusiasts have flocked to resale platforms to buy and sell coveted kicks, turning a profit on limited-edition releases and rare collaborations, much to the upset of regular buyers who still go to retail shops like myself.

Today Tarik sources his sneakers from a variety of places and typically pays close to retail price for them using specialised online platforms such StockX. He went on to state that he regularly uses bots and specialised software to complete e-commerce transactions at a much faster speed than is possible with manual checkouts, a contentious issue.

 Reselling sneakers in 2024 remains a big business. Globally, the global re-sale market for sneakers is currently worth 1.5 billion dollars, but that may no longer be the case.

In May of 2024 Together Magazine walked into the same shops in and around Brussels, and prices had plummeted to about 200-300 euros for limited edition releases. I questioned Tarik about what has led to the market’s current downturn.

Tarik explained that market saturation and deliberate overproduction for some limited edition models have caused great anguish to individual resellers and shops in 2024. “Adidas and Nike are eager to capitalise on the resale boom, and so have significantly ramped up production of certain models.

What was once exclusive and limited is now quite accessible. The allure of scarcity, which drove prices sky-high early 2020, has begun to fade as more and more “limited” releases flood the market. It’s BS” said Tarik.

“Collaborations that were once highly anticipated are now routine. Buddies of mine and fellow sneaker enthusiasts started to realise that the exclusivity that once justified the high resale prices was no longer there, leading to a drop in demand and plummeting prices.” he added.

 In an effort to further fight re-selling, in 2022 Nike updated its terms of sale policy to deliberately target resellers. Nike now has the right to decline any sales or automatically cancel online orders from anyone who is suspected to be purchasing merchandise with intention of reselling. This applies to both in-store and online purchases.

According to Nike’s own statistics, every month, the company stops as many as 12 billion bot calls attempting to take advantage of sneaker launches globally, and actively identifies accounts exhibiting bot activity during every launch.

Analysts argue this kind of technological disruption and direct to consumer model of business is a key cause to the markets downturn by bypassing traditional retailers and release channels. I asked Tarik if other reasons, such as an economic downturn or issues with counterfeits could have been a key reason why people aren’t spending right now on such luxury items.

“Its true, we live in tough times and in the midst of an economic downturn, consumers naturally prioritise essential spending over luxury items. No one will be shedding 1500 euros for a second hand pair of Nikes” said Tarik.

“Advances in manufacturing and technology have also made it increasingly difficult to distinguish between authentic sneakers and high-quality fakes. Even reputable resale platforms struggled to maintain the integrity of their listings, leading to a crisis of confidence among buyers” he added.

The Future of the Sneaker Resale Market While the luxury sneaker resale market has faced a downturn in 2024, it is essential to consider what the future might hold. Markets are cyclical, and while the current downturn is severe, this writer does not believe that it is permanent. The industry will definitely rebound if it adapts to new consumer preferences, addresses authenticity concerns, and embraces technological innovations.

It is this writers firm conviction however that companies like Nike or Addidas have no serious intention of destroying the second-hand reseller market. Nike is essentially the De Beers of the sneaker market; it would make absolutely no business sense to suddenly lose any kind of control on the supply or demand of its products.

If Nike wanted to tackle scalpers seriously and crash the market once and for all, they would put out their shoe models and colour patterns on a predictable schedule ie: release a special edition SB DUNK LOW or Air Jordan every 5 years, that way consumers are not incentivised to pay for outrageous resells because they know when the re-issue or issue is coming.

To conclude, consumer fashions come and go. To be ethically conscious and minimalistic is hot right now in 2024, but will soon pass and make way again for the frivolous consumer willing to mortgage his parents apartment to buy 40 pairs of the same shoe.