Photo: Jon M. Fletcher"What makes them so valuable is their rarity," says Mitch Drake, co-owner of Genetic Soles, a sneaker consignment store in Jacksonville.
Athletic shoes and the billion-dollar resell market
When Juan Osorio was in the fifth grade in Jacksonville, he fell in love with a sneaker, the Nike Air Jordan 3 — in “fire red” — and persuaded his parents to get him a pair to wear to school. They cost $140. “I remember seeing celebrities and athletes wearing the shoes, and I wanted a pair just like them,” he says.
Since then, he’s been crazy about sneakers. “I wasn’t super into clothes. I was solely focused on shoes,” he says. “I could be wearing sweats, but I needed to have a different pair of shoes on every day.”
In middle school, Osorio began reselling sneakers to classmates, hoping to make enough money to feed his shoe habit. He’d camp out in front of stores to buy the latest models of in-demand sneakers and even paid friends to come with him and help him circumvent the one-pair-per-customer rule.
By the time he got to high school, Osorio’s passion had become an avocation. He persuaded employees at stores to reserve sneakers for him on release days. He’d keep some for himself and resell the rest. He accumulated enough stock that a guest bedroom at his home became a sneaker closet. At 16, he used his earnings to put down $12,000 toward a new Dodge Challenger.
“If I could buy something and sell it for more, why not do it?” he says. “I’ve always been about making money.”
The secondary market for sneakers has been growing since Nike came out with the Air Jordan 1 in 1985. When sneaker companies release a new, exclusive model — typically branded with the name of a hot artist or athlete — they intentionally limit the supply as part of the marketing hype, hoping to drive up demand and prices. Scarcity also lets companies manage risk, since shoes don’t always go up in price. In 2016, Nike launched a futuristic, self-lacing basketball shoe called the HyperAdapt as a limited run for $720. Although Nike did not disclose production or sales numbers, the shoe appears to have been a dud, based on the fact it resells for less than the original price.
The companies’ marketing strategy has contributed to the growth of the secondary market — comprising thousands of sneaker resellers like Osorio — that experts estimate is now worth more than $1 billion.
Osorio, 23, figures he has sold more than $300,000 in sneakers and pocketed $100,000 in profit over the past decade. He considers it an easy way to make money while he studies for a bachelor’s degree in finance at the University of North Florida. He relies on a national network of personal connections and computer savvy to find and buy sneakers and then resells through a variety of channels, including websites and local consignment shops.
“I buy in bulk. There are releases where I’m picking up 150 to 200 pairs from numerous stores and online,” he says.
Much of the sneaker business — both new and resale — is conducted via the internet. Today, most new sneakers are launched and sold online, in limited quantities that sell out quickly. Resellers like Osorio use sneaker-buying bots to snap up pairs the second they go on sale. The bots, which cost up to several hundred dollars, enable buyers to speed through the online checkout process by automatically selecting items and entering pre-loaded billing and shipping information.
Sites such as StockX offer a way to make money from the resale market. A pair of vintage-looking Off-White Air Jordan 1 Retro high-tops in black and red, which initially sold for $190 in 2017, now costs more than $2,000 on StockX.
The secondary sneaker market also includes a number of traveling expos with names like Sneaker Con and Sole Fest, which make money from admission fees (typically $20 to $25), vendor fees and corporate sponsorships. On a recent Sunday, more than 2,000 people packed an exhibit hall at the DoubleTree hotel near Miami International Airport for something called the Sneaker Games. Like a gun or coin show, the event was both social gathering and swap meet.
Attendees, many of whom appeared to be in their teens, browsed vendor booths stacked with Air Jordans and Yeezy Boosts (Kanye West’s sneaker line for Adidas) as a DJ played hip-hop music at full volume. Some attendees, carrying boxed and unboxed sneakers, shuffled about trying to make a sale or trade. There also were video game stations, free sneaker authentication services and tutorials by shoe care company Crep Protect on how to clean vintage shoes.