Wednesday, February 1, 2017

How Sneakers Can be Insanely Profitable

Sneakers. Everyone owns a pair, whether they’re for exercise, wearing around, fashion, or a combination of the three. Or you own 2,500 pairs.
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Introducing sneakerheads. The sneaker fanatics who campout for releases days in advance. The ones who spend $1,200 on a pair of sneakers they will never end up wearing. I know what you’re thinking. Why would they do this? Why buy another pair of Adidas Yeezy Boost 350’s instead of paying rent? Some do not do it for the sneakers, though. Some do it for the money.


    The largest corporations, such as Nike, Adidas, and Puma to mention a few, control the entire market.
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When releasing sneakers, these corporations control the supply of the sneaker, therefore controlling the demand of it. The fewer pairs being made, the more exclusive the pair, the more people want the pair, the higher the resale price. Strategies like supply and demand decide the amount of ¨hype¨ surrounding a release. When a release is ¨hyped,¨ everyone wants them. This is an image of people lined up outside of a Foot Locker, waiting for an upcoming Air Jordan sneaker release. This happens every weekend! With more limited releases, such as the Adidas Yeezy Boost 350, pictured below, people line up for days in advance. Days in advance! They take the week off from work just to buy a new sneaker. Why?
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This is a graph I created showing the performance of three things over the last two years. One, the Adidas Yeezy Boost 350, a highly coveted Adidas sneaker made with musical artist Kanye West. Two, Amazon’s stock (AMZN,)  and three, Apple’s stock (AAPL.)
The end product is incredible! If you had bought a share in Apple stock two years ago, you would be down $9. June 2015- June 2016 was a bit of a rough time for their stock. This graph was created before Apple announced 2017's Q1 earnings, which shot the stock up 6%. Amazon, on the other hand, would have earned you almost $400. This is a dollar value most people would be happy with, especially the fact that the price nearly jumped 200%! This is good, but when you look at the shoes it just blows your mind! If you had purchased a pair of Yeezy Boost 350 ‘Turtle Dove’s’ when they released in 2015, paying the retail price of $200, you would now have a sneaker worth just over $2,000! That means the price for them has grown 1000%. Selling them now, you would walk away $1,800 richer. For just a pair of shoes!

    Numbers like these draw lots of people to the sneaker game, intrigued by the $1.2 billion, yes $1.2 billion, unregulated resale market. Although it is harder to get your hands on 500 pairs of sneakers compared to 500 shares of stock, the returns from sneakers can be much higher.

      The idea of getting rich of sneakers is neat, but it’s also important to remember that sneakers are just footwear. There have been tragic incidents involving people being killed over their sneakers, and it is important to remember that your life is higher than your sneakers.
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To wrap things up, the sneaker resale market is a very intriguing and cool thing, with the opportunity for huge returns. Amidst all this excitement, it’s important to keep priorities straight and know what’s important.




















Picture Credits:

Yeezy Boost 350:
 http://static.highsnobiety.com/wp-content/uploads/2015/06/instagram-stars-with-adidas-yeezy-boost-350-0.jpg

People Lining Up for Sneakers:
 https://si.wsj.net/public/resources/images/MK-BR353_JORDAN_G_20111228163651.jpg

Sneaker Collection:
http://iqbkkd2tcm3u6mnv1c41azk6.wpengine.netdna-cdn.com/files/2014/07/Sneaker-Collection-16-700x357.jpg

People Lined up for Yeezys:
 http://i.dailymail.co.uk/i/pix/2016/11/24/11/3AB0E30A00000578-0-image-m-34_1479986386104.jpg

SI Cover:
http://cdn-s3.si.com/s3fs-public/2015/12/13/sports-illustrated-your-sneakers-or-your-life-inline-vault.jpg





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18 comments:

  1. Ellen02 February, 2017 20:44

    This is a subject I absolutely never considered. You presented it powerfully, and I'm still trying to wrap my head around it!

    ReplyDelete
  2. Anonymous17 February, 2017 08:05

    It is certainly pretty crazy how much people are willing to pay for a pair of shoes. I think you last sentence about making sure we always keep priorities/values in mind despite living in an increasingly consumeristic world is important!

    ReplyDelete
  3. Anonymous03 March, 2017 16:49

    GeorgeJ,
    I appreciated how you touched on the ridiculous pricing of certain pairs of shoes. I am interested in how you became interested in sneakers and the entire culture.
    laxandpizzaandbmth

    ReplyDelete
    Replies
    1. Anonymous05 March, 2017 20:33

      Laxandpizzaandbmth,

      My dad has worked for NIKE for the last 8 years, and got switched over to Jordan brand around 2 years ago. This got me a little interested in shoes because Jordans are so big in the sneaker game. When I really got interested was this fall when I saw a pair of shoes coming out a knew I had to have them. I unfortunately took an L on these shoes. These really got me interested in shoes, and I started devouring information on everything there is to do with sneakers.

      JG

      Delete
  4. Anonymous03 March, 2017 22:44

    GeorgeJ,
    The introduction of your piece of writing immediately captured my attention and drew me in. I love the creativity of the graph you made, and how well researched your blog post was. Question - what do you think about the prices of sneakers? I mean, I know you like sneakers, but do you think that the sneakers are worth that much? If so, why?
    -palace43

    ReplyDelete
    Replies
    1. Anonymous05 March, 2017 20:36

      palace43,

      What a great question! Tons of people have talked about this, and it ties in with tons of strategies on the business side. As a consumer, I think that it would always be nice to have cheaper stuff, especially sneakers, but I think having a range in prices is good. This enables people to have stuff that suits them. This also gives more of a value to your possessions, which can feel good. This also unfortunately results in thefts of sneakers.

      JG

      Delete
  5. Anonymous05 March, 2017 09:01

    GeorgeJ,

    Wow, it is amazing to see how much people are willing to pay for a pair of shoes! People care so much about how they look, yet I only have four pairs of shoes! One pair of running shoes, one pair of flip flops, and two pairs of boots! Have you ever bought a pair of expensive shoes like sneakers?

    Best wishes,

    -Flexi

    ReplyDelete
    Replies
    1. Anonymous05 March, 2017 20:38

      Flexi_Ally_Kat,

      I agree with you, it's crazy how much people spend on sneakers! I have never spent a lot on a pair of sneakers, but I am in a pretty good situation. I can get a 50% discount on any sneakers I buy from Nike, and I also get some free sneakers from my dad. The most I would be willing to spend on a pair of sneakers is around $400.
      JG

      Delete
  6. Anonymous06 March, 2017 09:11

    Hi GeorgeJ,

    This is amazing and I really enjoyed reading this. That is insane how many shoes people can have but never wear and how much it costs. What is the most you have spent on a nice pair of shoes? How many shoes do you have that are a pair that a sneaker head would collect? Awesome Job!!

    - JPLAX

    ReplyDelete
    Replies
    1. Anonymous06 March, 2017 12:47

      JPLAX,

      Thank you. The most I have spent on a nice pair of shoes is $240. I have around 4 pairs of shoes that a sneakerhead would collect.

      JG

      Delete
  7. Anonymous06 March, 2017 13:00

    GeorgeJ,

    I really enjoyed reading this post. There were so many fascinating facts. It is so crazy that people pay so much just for shoes. Would you and have you ever bought a shoe that is that expensive and why?

    -Ava

    ReplyDelete
    Replies
    1. Anonymous06 March, 2017 17:56

      Ava,

      Thank you. I agree, it is crazy how much people pay for a piece of footwear. Although I think it is crazy, it is something I could see myself doing. The most I would spend on a pair of shoes is probably $400. I haven't yet spent a lot on an expensive pair of shoes. I would spend this much because a shoe worth that much would be very high quality, and there would also be a big history behind it.

      JG

      Delete
  8. Anonymous08 March, 2017 12:55

    GeorgeJ,

    I loved this post! I liked how you talked about how people will pay so much for shoes and how it's affecting people. Do you collect shoes regularly?
    -ILoveBasketball

    ReplyDelete
    Replies
    1. Anonymous12 March, 2017 13:04

      ILoveBasketball,

      Thank you for your comment. I love shoes, and I think I will continue to for the rest of my life. I don't buy new shoes regularly, if that's what you meant by collecting them regularly.

      JG

      Delete
  9. Anonymous12 March, 2017 12:41

    GeorgeJ,
    This post was supreme, not like the brand. I liked it because I have noticed the craze of new sneakers too. What do you think of shoes being so expensive, should they be more or less expensive?
    -SR

    ReplyDelete
    Replies
    1. Anonymous12 March, 2017 13:05

      Bobbyblogman,

      Thank you for your comment. It was supreme! I think that shoes certainly are very expensive, but they need to be pricy because thats how companies make money. I think that resale is a little to expensive.

      JG

      Delete
  10. Anonymous13 March, 2017 17:37

    Hello GeorgeJ,
    I really liked your post! I like how you covered different brands of sneakers. I had no idea how much money someone could make by buying shoes! Why do you think Yeezys have become so popular?
    -NWS

    ReplyDelete
  11. Anonymous14 March, 2017 18:48

    Hi Georgej,

    I never new that people could make this much profit on sneakers and where that hard to get. Whats your favorite pair of Jordan that you own also what do you think of the Yeezy 350. From your friend Bobbytheunicorn.

    ReplyDelete

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