are the numbers of “a top-tier power
seller.” An opportunity was clearly pre-
senting itself. The teenager had a prob-
lem, though: Supply chain issues were
starting to translate into fewer shipments
to wholesalers. The shoes he needed were still
out there in stores, their prices slashed, but if he
wanted to buy the dip, he’d have to get creative.H
ebert’s reselling career started in
high school, when he noticed that
some Supreme T-shirts he owned were going
online for two or three times what he’d paid. The
margin traced at least partly to the 2016 launch of StockX,
where limited-edition releases from Supreme, Off-White,
Palace, and other streetwear brands were finding new
life. The resale site was giving Hebert’s gen-
eration its own EBay—a “stock market of
things” where transactions were public and
items could be valued accordingly. “If you
throw out everything else, StockX is a price
guide,” says co-founder Josh Luber. “It’s a
price guide that moves in real time, look-
ing at supply and demand to understand the
value of any particular shoe.”
When Hebert began selling shoes there in
2017, StockX had gone from processing hundreds
of transactions per day to tens of thousands.
Demand was surging for deadstock sneakers,
in part due to the rising popularity of the street-
wear brands, which supplemented a booming
trade in T-shirts and hoodies with limited-edition
shoe collaborations with traditional footwear makers. But
it was also thanks to an industry-shifting move by Nike. Its
“Consumer Direct Offense,” announced that year,
was focused on driving sales away from brick-
and-mortar partners such as Foot Locker
Inc. and toward its own stores, mobile apps,
and websites. By the end of the fiscal year
ended May 31, 2019, it was clear the move
was paying off: Digital sales were up more
than a third, and direct-to-consumer sales
had climbed to $11.8 billion, almost double
what they’d been four years before. (This
shift has lately helped insulate Nike from
the effects of pandemic-related store clo-
sures, says spokesperson Sandra Carreon-
John. “The pandemic has been sort of a stress
test that proves our strategy is working,” she says.)
The move toward online sales was a boon for
resellers like Hebert, who could use bots to target
the most sought-after sneakers and acquire them
in far greater quantities than customers could
in the days of lining up outside stores. He and
his peers operated instead in digital spaces suchas Nike’s SNKRS app, which the company made
the first place—and sometimes the only
place—people could get certain limited-
edition shoes. The app effectively gam-
ified Nike’s engineered-scarcity model,
making the experience of buying shoes like spin-
ning a digital roulette wheel. It also turned its
most avid customers into digital advertisers for
the brand: After a big drop, winners and losers
of the app lottery for the latest Jordan or Nike
SB Dunk reissue would celebrate or complain on
social media, fueling the hype cycle.
The potential to get rich quickly, in an informal setting
with little oversight, drew a new breed of extremely online
Gen Z trader. Most were White men, according to Adena Jones,
chief executive officer and one of two Black co-founders of
Another Lane, which launched its own digital marketplace
for kicks last April. Jones and her husband, Chad, raised
$160,000 to start their business by selling off shoes
from their own collection. “Part of the rea-
son,” she says, “was to have a voice
in this culture that we started.” She’d
seen sneaker reselling become highly
transactional—“like buying wheat or
oil,” in contrast with the approach of her
husband, “who has been to the weddings of peo-
ple he’s sold sneakers to.”
Chad marvels at how quickly things changed:
“For 30 years I was boots on the ground, camp-
ing out in front of shoe stores. Then all of the
sudden this middleman emerged.”
The ultimate middleman was StockX, which
came about in part as a stabilizing force. In 2014, when Luber
was still an IBM consultant with a sneaker blog, he told the
Financial Times that the secondary market for sneakers was
“more similar to the illegal drug trade” than a stock exchange.
Two years later he launched StockX with an eye to chang-
ing that. He’s succeeded well enough that Einhorn, the senior
economist, created a hypothetical index fund of 500 sneakers
that he found outperformed the S&P 500 by a few percentage
points. “The index of the top 500 increased about 30% since
2018, and about 75% of the sneakers in that portfolio
gained resale value,” he says.
As with most assets, some vetting
is required. Sellers ship items to a
StockX processing center, where
they’re authenticated before being
shipped on to the buyer. Items are
returned to the seller if they’re damaged or
used or have missing or substandard packaging.
A rigorous inspection helps weed out counter-
feits. Other potential provenance issues aren’t
accounted for—StockX doesn’t track how sneak-
ers end up on its platform, for example.
Hebert’s biggest score as a young shoe39Bloomberg Businessweek March 1, 2021PREVIOUS SPREAD: @WEST.COAST.STREETWEAR/INSTAGRAM; @510KICKS/INSTAGRAM. THIS SPREAD: COURTESY VENDORS. DATA: STOCKX.COM 52-WEEK LOW-HIGH PRICE, ALL SIZES, AS OF FEB. 24
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