8 ms·

Buy Low-Tops, Sell High-Tops: StockX Sneaker Exchange Is Worth $1B

70 points by NN88 7y ago

whalesalad 7y ago
Got a tour of their office in the Compuware building a while back while interviewing for a position at Quicken. Pretty cool place, but probably a brutally chaotic environment to actually program or get shit done.
- kookoopuffs 7y ago
  Why?
  - deleted 7y ago
    [deleted]
  - whalesalad 7y ago
    Well, it's just like every other googamabooksoft company with open floor plans, brightly painted walls, demos of all the crap Dan Gilbert is doing all over the rest of Detroit like new football helmets on display to prevent injury, candy machines everywhere, mock buildings, etc... Not to mention you are in the same building with other properties like Quicken and Bedrock. Fun for a visitor, obnoxious for an employee.
- ralmidani 7y ago
  I applied for a web dev position there after a very enthusiastic recommendation of me from a bootcamp cohort colleague. When I interacted with their recruiters, they were very polite. I was given a few days to complete a take-home challenge, and went above-and-beyond to include persistence and real-time functionality. Weeks would go by, and when I would inquire about the status of my application, I would be told nobody got a chance to look at my code/application. I don't blame the recruiters, but it does seem like your suspicion about the place being "brutally chaotic" is spot-on. My colleague left after a few short months to work as a freelancer.
  - headcanon 7y ago
    I interviewed for a backend position there, and they got back to me with an onsite request within hours after submitting the take-home. Such a disparity in interview experiences can happen often in large high-growth companies like this one. It might have helped in my case that the team I was interviewing for was small.
  - jahlove 7y ago
    Those take-home tests are bullshit. You put all that work in it for free, and they can't be bothered to follow up. Maddening.
    - harry8 7y ago
      They'd be fine if employers paid for the time. Then they waste your resource as their expense. Right now they have no incentive at all to treat applicants resource with any respect. So you get this, which is utter and total contempt. Failing to look at it is actually fraud or theft. The deal they strike is you do this unpaid work to help us hire you. If they don't look at it they have broken that deal and should face consequences.
googoogaga 7y ago
>The hobby took off and this year, he expects to move 10,000 pairs of shoes. His anticipated take is a 25 percent profit from over $1 million in sales. $250K profit, $1M in sales, $1B valuation. Lol. Can't wait until this useless company fails miserably. Obsession with thousand dollar "streetwear" and "sneakers" is beyond pathetic. Usually you'll find the people most interested in this dogshit are the people who can afford it the least. Obsession with consumption-based "hobbies" like this is the mark of a cookie cutter.
- changdizzle 7y ago
  You realize this is talking about one of the sellers on the platform right? Not the platform itself. Looks like GMV is actually ~1.2B/year and even at a conservative 10% profit margin, they're pulling in at least $120M/year. "The company said its revenue more than doubled in the last year, with gross product sales topping $100 million a month. It has expanded into streetwear and luxury goods like handbags and has more than 800 employees."
  - knd775 7y ago
    The transaction fees on sneaker sales (by far their largest segment) are between 8% and 9.5% depending on seller volume. Since StockX authenticates every shoe, that eats up a bit of that fee. The point of your comment mostly still stands, but I wanted to mention some real numbers. https://help.stockx.com/articles/478556-what-are-stockx-selling-fees https://help.stockx.com/articles/478556-what-are-stockx-sell...
- bluedino 7y ago
  Hey, they could pivot to selling something else. After all, eBay was started to sell to collectors of ~~Beanie Babies~~ ~~Pez Dispensers~~ broken laser pointers.
- detaro 7y ago
  The first two numbers are for one dude using the platform to trade.
- dang 7y ago
mooreds 7y ago
I enjoyed this podcast with the founder of stockx a few years ago: https://www.econtalk.org/josh-luber-on-sneakers-sneakerheads-and-the-second-hand-market/ https://www.econtalk.org/josh-luber-on-sneakers-sneakerheads...
- pizzabearman 7y ago
  Really good podcast, you thanks for recommending
dmix 7y ago
Seems like a whole lot of selling high.
jasode 7y ago
I wonder if most people buying sneakers as "art collectibles" realize that the shoes suffer inevitable disintegration and crumbling called polyurethane hydrolysis[0][1]. I just learned of this phenomenon last month. I had some brand new unworn shoes that I had meant to donate to a children's home but I forgot about them in a closet for 5 years. When I finally dug them out, the soles were disintegrated. A complete waste of $150. Unless you store the shoes in a special climate controlled jar, it really seems the only use for buying is to actually wear them before the ticking time bomb makes them worthless. [0] https://www.google.com/search?q=shoes+polyurethane+hydrolysis&source=lnms&tbm=isch https://www.google.com/search?q=shoes+polyurethane+hydrolysi... [1] some Nike Air Jordan examples (open in new tab to not break the Back button): https://solecollector.com/news/2016/10/worst-sneaker-blow-outs/nike-air-force-180-high https://solecollector.com/news/2016/10/worst-sneaker-blow-ou...
- sb8244 7y ago
  Wow. I buy shoes but I've never seen this (I buy to wear). Why is it that a shoe which I wear and have had for multiple years doesn't look anything like that? Is it only certain shoes, based on material?
- Scoundreller 7y ago
  To prevent hydrolysis (literally breaking apart with water) you just need to keep the environment humidity-free. An airtight plastic box and a bed of salt should do the trick.
  - cheeze 7y ago
    No need for a bed of salt, just use a dessicant packet.
    - Scoundreller 7y ago
      Same thing. But a kg of table salt, some time in the oven for extra dryness and a free Tyvek envelope makes a massive $1 dessicant packet.
lotsofpulp 7y ago
And I’m over here searching old emails for names and sizes of shoes I’ve already bought so I can buy them again, to avoid having to shop for shoes.
- jonlucc 7y ago
  Beware. I've done this recently. I purchased a previous pair of Merrills from their own website. I recently re-purchased the same model, color, and size only to find that they are uncomfortably tighter now. I'm not sure if they've changed the process in some way or there's just that much variation between shoes of the same sort.
  - topspin 7y ago
    I think this is down to manufacturer quality control. I bought the same model from Florsheim over 10+ years and they were indistinguishable. Got lucky on that one I suppose.
  - lotsofpulp 7y ago
    Yes, I’ve experienced a lot of products with cuts in quality and volume in the past few years as input costs and labor costs are rising. Not saying Merrill is reducing quality, but things are in flux.
acconrad 7y ago
Collectibles are a tough market because you can't predict what will continue to be valuable in the future (i.e. art, sculpture, watches) vs what is ephemeral (i.e. Pogs, Yu-Gi-Oh cards). I genuinely don't know: were people trading sneakers in the 80s? Or is this a recent (read: temporary) phenomenon?
- maaaats 7y ago
  From the article: > The fervor for sneakers has been fueled by “sneakerheads” and others who regard the shoes as investment assets. Like beanie babies, perhaps? Or is there anything driving the value here other than potentially future value? (Not that different from stocks, some may argue, but..) Edit: Based on votes this strung a cord on some people..
- benj111 7y ago
  I would predict toys become collectible roughly 20-30 years after their heyday. Ie when the kids have grown up and want to relive their childhood. So that would make pogs due imminently. Mistakes (on coins and stamps) is a reliable indicator, actually my dad has a blue thunderbird 2. Most tvs were black and white, so they didn't know what the colour was, or didn't think it mattered. Then you have the famous flops. That ET Atari cart is probably quite valuable, same for the Sinclair C1.
  - whermans 7y ago
    The Atari ET cart is an oddity: it was a huge flop, but vast amounts of carts were produced before that was apparent, so you can still get a good one for under $20.
- jahlove 7y ago
  The Air Jordans 1 (1985) were the beginning of collectible sneaker movement. It probably wasn't until sites like eBay became popular that the market really opened up.
  - fvrghl 7y ago
benj111 7y ago
So what's to stop shoe manufacturers basically flooding the market with collectibles, or china, or wherever catching on and producing fakes of the originals. This doesn't seem to have the traits you'd want from an investment.
- jahlove 7y ago
  Nike tried flooding the market with Jordans, and they quickly lost their desirability on the streets. Nike has said they plan to keep the shoes in limited supplies to prevent this from happening again.
- Pavarotti 7y ago
  Nothing, This is currently quite a common thing with factories in china producing these on mass. Check out the subreddit repsneakers the fakes(Replicas as they call them) even come with StockX tags for reselling online as authentic.
alistproducer2 7y ago
Shoes were never engineered to be collectables. After a couple years the glue fails and your "investment" is worthless. I had a friend who was really into this and he had a huge collection. Needless to say he was pretty pissed when he opened the boxes and found his shoes falling apart.
- xzel 7y ago
  I mean he doesn't sound like much of a collector if he didn't know how to protect the shoes. Sealing them airtight helps and so does removing water as discussed in other comments. Almost everything that people collect needs some amount of protection.
  - alistproducer2 7y ago
    We're not talking decades so I don't think he was being unreasonable. Most people would expect a product that has been kept in a box in climate controlled conditions to, you know, not fall apart after a couple years. Get off your high horse.
    - xzel 7y ago
      Yeah they don’t fall apart after a couple of years. After 20 though those earlier plaits weren’t made to the same standard with the same material. Get off your ignorant horse?
jahlove 7y ago
great headline, NYT
blantonl 7y ago
1B valuation for a clearinghouse marketplace for sneakers. Jeeze... Is this our generation's cabbage patch kids and beanie babies hype enabled with a little less friction due to technology? Because if it walks like a duck, and quacks like a duck... This clearinghouse better be vacuuming up a ton of nickels to eventually give investors a return on their investment.
rambleraptor 7y ago
It's really cool to see a unicorn come out of Detroit. The area isn't known for tech, despite having the largest concentration of engineers in the country. Hopefully, more startups like StockX and Duo Security will shine light on the area as a tech hub.
gen3 7y ago
I'm not a sneaker head, but love a good deal. I bought a pair of Adidas for 80$ less then retail from stockx and they are my favorite pair of shoes! Overall I was a pretty happy customer, I hope they can maintain quality.
forthwall 7y ago
I think another interesting market to come out of this is an easy place to find second-hand trustworthy unused shoes at prices lower than retail. Take for instance these Nike Gyakusou Zoom Pegasus 35 ($200) https://www.nike.com/t/gyakusou-zoom-pegasus-35-turbo-mens-shoe-krvlzj https://www.nike.com/t/gyakusou-zoom-pegasus-35-turbo-mens-s... On StockX you could purchase them for 120$ https://stockx.com/nike-zoom-pegasus-35-turbo-gyakusou-fir?currencyCode=USD&size=6.5&gclid=CjwKCAjwr8zoBRA0EiwANmvpYF_Wh6TkLncQ-FnlkTnF_X2QhtE7mHbLgMLvNB6Nasz3xx_BKkT_HxoC8CcQAvD_BwE https://stockx.com/nike-zoom-pegasus-35-turbo-gyakusou-fir?c... I definitely do not think this was the intended use of StockX but I feel like this is an unique value proposition for bargain hunters.
mrtweetyhack 7y ago
Anybody interested in slightly worn underwear?
xenospn 7y ago
Hey remember 1999?

70 points by NN88 7y ago

Got a tour of their office in the Compuware building a while back while interviewing for a position at Quicken. Pretty cool place, but probably a brutally chaotic environment to actually program or get shit done.

kookoopuffs 7y ago
Why?
- deleted 7y ago
  [deleted]
- whalesalad 7y ago
  Well, it's just like every other googamabooksoft company with open floor plans, brightly painted walls, demos of all the crap Dan Gilbert is doing all over the rest of Detroit like new football helmets on display to prevent injury, candy machines everywhere, mock buildings, etc... Not to mention you are in the same building with other properties like Quicken and Bedrock. Fun for a visitor, obnoxious for an employee.
ralmidani 7y ago
I applied for a web dev position there after a very enthusiastic recommendation of me from a bootcamp cohort colleague. When I interacted with their recruiters, they were very polite. I was given a few days to complete a take-home challenge, and went above-and-beyond to include persistence and real-time functionality. Weeks would go by, and when I would inquire about the status of my application, I would be told nobody got a chance to look at my code/application. I don't blame the recruiters, but it does seem like your suspicion about the place being "brutally chaotic" is spot-on. My colleague left after a few short months to work as a freelancer.
- headcanon 7y ago
  I interviewed for a backend position there, and they got back to me with an onsite request within hours after submitting the take-home. Such a disparity in interview experiences can happen often in large high-growth companies like this one. It might have helped in my case that the team I was interviewing for was small.
- jahlove 7y ago
  Those take-home tests are bullshit. You put all that work in it for free, and they can't be bothered to follow up. Maddening.
  - harry8 7y ago
    They'd be fine if employers paid for the time. Then they waste your resource as their expense. Right now they have no incentive at all to treat applicants resource with any respect. So you get this, which is utter and total contempt. Failing to look at it is actually fraud or theft. The deal they strike is you do this unpaid work to help us hire you. If they don't look at it they have broken that deal and should face consequences.

googoogaga 7y ago

>The hobby took off and this year, he expects to move 10,000 pairs of shoes. His anticipated take is a 25 percent profit from over $1 million in sales. $250K profit, $1M in sales, $1B valuation. Lol. Can't wait until this useless company fails miserably. Obsession with thousand dollar "streetwear" and "sneakers" is beyond pathetic. Usually you'll find the people most interested in this dogshit are the people who can afford it the least. Obsession with consumption-based "hobbies" like this is the mark of a cookie cutter.

changdizzle 7y ago
You realize this is talking about one of the sellers on the platform right? Not the platform itself. Looks like GMV is actually ~1.2B/year and even at a conservative 10% profit margin, they're pulling in at least $120M/year. "The company said its revenue more than doubled in the last year, with gross product sales topping $100 million a month. It has expanded into streetwear and luxury goods like handbags and has more than 800 employees."
- knd775 7y ago
  The transaction fees on sneaker sales (by far their largest segment) are between 8% and 9.5% depending on seller volume. Since StockX authenticates every shoe, that eats up a bit of that fee. The point of your comment mostly still stands, but I wanted to mention some real numbers. https://help.stockx.com/articles/478556-what-are-stockx-selling-fees https://help.stockx.com/articles/478556-what-are-stockx-sell...
bluedino 7y ago
Hey, they could pivot to selling something else. After all, eBay was started to sell to collectors of ~~Beanie Babies~~ ~~Pez Dispensers~~ broken laser pointers.
detaro 7y ago
The first two numbers are for one dude using the platform to trade.
dang 7y ago

mooreds 7y ago

I enjoyed this podcast with the founder of stockx a few years ago: https://www.econtalk.org/josh-luber-on-sneakers-sneakerheads-and-the-second-hand-market/ https://www.econtalk.org/josh-luber-on-sneakers-sneakerheads...

pizzabearman 7y ago
Really good podcast, you thanks for recommending

dmix 7y ago

Seems like a whole lot of selling high.

jasode 7y ago

I wonder if most people buying sneakers as "art collectibles" realize that the shoes suffer inevitable disintegration and crumbling called polyurethane hydrolysis[0][1]. I just learned of this phenomenon last month. I had some brand new unworn shoes that I had meant to donate to a children's home but I forgot about them in a closet for 5 years. When I finally dug them out, the soles were disintegrated. A complete waste of $150. Unless you store the shoes in a special climate controlled jar, it really seems the only use for buying is to actually wear them before the ticking time bomb makes them worthless. [0] https://www.google.com/search?q=shoes+polyurethane+hydrolysis&source=lnms&tbm=isch https://www.google.com/search?q=shoes+polyurethane+hydrolysi... [1] some Nike Air Jordan examples (open in new tab to not break the Back button): https://solecollector.com/news/2016/10/worst-sneaker-blow-outs/nike-air-force-180-high https://solecollector.com/news/2016/10/worst-sneaker-blow-ou...

sb8244 7y ago
Wow. I buy shoes but I've never seen this (I buy to wear). Why is it that a shoe which I wear and have had for multiple years doesn't look anything like that? Is it only certain shoes, based on material?
Scoundreller 7y ago
To prevent hydrolysis (literally breaking apart with water) you just need to keep the environment humidity-free. An airtight plastic box and a bed of salt should do the trick.
- cheeze 7y ago
  No need for a bed of salt, just use a dessicant packet.
  - Scoundreller 7y ago
    Same thing. But a kg of table salt, some time in the oven for extra dryness and a free Tyvek envelope makes a massive $1 dessicant packet.

lotsofpulp 7y ago

And I’m over here searching old emails for names and sizes of shoes I’ve already bought so I can buy them again, to avoid having to shop for shoes.

jonlucc 7y ago
Beware. I've done this recently. I purchased a previous pair of Merrills from their own website. I recently re-purchased the same model, color, and size only to find that they are uncomfortably tighter now. I'm not sure if they've changed the process in some way or there's just that much variation between shoes of the same sort.
- topspin 7y ago
  I think this is down to manufacturer quality control. I bought the same model from Florsheim over 10+ years and they were indistinguishable. Got lucky on that one I suppose.
- lotsofpulp 7y ago
  Yes, I’ve experienced a lot of products with cuts in quality and volume in the past few years as input costs and labor costs are rising. Not saying Merrill is reducing quality, but things are in flux.

acconrad 7y ago

Collectibles are a tough market because you can't predict what will continue to be valuable in the future (i.e. art, sculpture, watches) vs what is ephemeral (i.e. Pogs, Yu-Gi-Oh cards). I genuinely don't know: were people trading sneakers in the 80s? Or is this a recent (read: temporary) phenomenon?

maaaats 7y ago
From the article: > The fervor for sneakers has been fueled by “sneakerheads” and others who regard the shoes as investment assets. Like beanie babies, perhaps? Or is there anything driving the value here other than potentially future value? (Not that different from stocks, some may argue, but..) Edit: Based on votes this strung a cord on some people..
benj111 7y ago
I would predict toys become collectible roughly 20-30 years after their heyday. Ie when the kids have grown up and want to relive their childhood. So that would make pogs due imminently. Mistakes (on coins and stamps) is a reliable indicator, actually my dad has a blue thunderbird 2. Most tvs were black and white, so they didn't know what the colour was, or didn't think it mattered. Then you have the famous flops. That ET Atari cart is probably quite valuable, same for the Sinclair C1.
- whermans 7y ago
  The Atari ET cart is an oddity: it was a huge flop, but vast amounts of carts were produced before that was apparent, so you can still get a good one for under $20.
jahlove 7y ago
The Air Jordans 1 (1985) were the beginning of collectible sneaker movement. It probably wasn't until sites like eBay became popular that the market really opened up.
- fvrghl 7y ago

benj111 7y ago

So what's to stop shoe manufacturers basically flooding the market with collectibles, or china, or wherever catching on and producing fakes of the originals. This doesn't seem to have the traits you'd want from an investment.

jahlove 7y ago
Nike tried flooding the market with Jordans, and they quickly lost their desirability on the streets. Nike has said they plan to keep the shoes in limited supplies to prevent this from happening again.
Pavarotti 7y ago
Nothing, This is currently quite a common thing with factories in china producing these on mass. Check out the subreddit repsneakers the fakes(Replicas as they call them) even come with StockX tags for reselling online as authentic.

alistproducer2 7y ago

Shoes were never engineered to be collectables. After a couple years the glue fails and your "investment" is worthless. I had a friend who was really into this and he had a huge collection. Needless to say he was pretty pissed when he opened the boxes and found his shoes falling apart.

xzel 7y ago
I mean he doesn't sound like much of a collector if he didn't know how to protect the shoes. Sealing them airtight helps and so does removing water as discussed in other comments. Almost everything that people collect needs some amount of protection.
- alistproducer2 7y ago
  We're not talking decades so I don't think he was being unreasonable. Most people would expect a product that has been kept in a box in climate controlled conditions to, you know, not fall apart after a couple years. Get off your high horse.
  - xzel 7y ago
    Yeah they don’t fall apart after a couple of years. After 20 though those earlier plaits weren’t made to the same standard with the same material. Get off your ignorant horse?

jahlove 7y ago

great headline, NYT

blantonl 7y ago

1B valuation for a clearinghouse marketplace for sneakers. Jeeze... Is this our generation's cabbage patch kids and beanie babies hype enabled with a little less friction due to technology? Because if it walks like a duck, and quacks like a duck... This clearinghouse better be vacuuming up a ton of nickels to eventually give investors a return on their investment.

rambleraptor 7y ago

It's really cool to see a unicorn come out of Detroit. The area isn't known for tech, despite having the largest concentration of engineers in the country. Hopefully, more startups like StockX and Duo Security will shine light on the area as a tech hub.

gen3 7y ago

I'm not a sneaker head, but love a good deal. I bought a pair of Adidas for 80$ less then retail from stockx and they are my favorite pair of shoes! Overall I was a pretty happy customer, I hope they can maintain quality.

forthwall 7y ago

I think another interesting market to come out of this is an easy place to find second-hand trustworthy unused shoes at prices lower than retail. Take for instance these Nike Gyakusou Zoom Pegasus 35 ($200) https://www.nike.com/t/gyakusou-zoom-pegasus-35-turbo-mens-shoe-krvlzj https://www.nike.com/t/gyakusou-zoom-pegasus-35-turbo-mens-s... On StockX you could purchase them for 120$ https://stockx.com/nike-zoom-pegasus-35-turbo-gyakusou-fir?currencyCode=USD&size=6.5&gclid=CjwKCAjwr8zoBRA0EiwANmvpYF_Wh6TkLncQ-FnlkTnF_X2QhtE7mHbLgMLvNB6Nasz3xx_BKkT_HxoC8CcQAvD_BwE https://stockx.com/nike-zoom-pegasus-35-turbo-gyakusou-fir?c... I definitely do not think this was the intended use of StockX but I feel like this is an unique value proposition for bargain hunters.

mrtweetyhack 7y ago

Anybody interested in slightly worn underwear?

xenospn 7y ago

Hey remember 1999?