The Resale Dilemma

The Resale Dilemma

With recent reseller drama stirring the sneaker community, guest contributor Yatin Srivastava raises questions about resale platforms and why they have become a necessary option in the first place.

Release day is always a trip! In the old days (and on rare occasions nowadays), it would involve camping out in line, trying your best to reserve your spot and just grind it out till you get into the store to buy the special pair being launched that day!

Be it the infamous Pidgeon Dunk launch in New York, or the Yeezy Red October shock drop on the Nike SNRKS App in the new modern world – launch days and drops have become synonymous with the sneakerhead way of life. But with companies releasing more and more limited quantities of sneakers in recent years, it seems like wanting to get your dream sneaker has become more impossible than ever.

The same environment has also given immense rise to resale platforms like StockX, Grailed and flagship resale stores like Flight Club, Stadium Goods etc. This practice has started to raise questions about the overall availability of sneakers and the culture around selling and reselling. It doesn’t help that while many stand in lines or get up in the morning for the 7:30am drop online, Instagram is filled with influencers getting early pairs or resellers standing behind walls of Jordan or Yeezy boxes.

Talking about resellers standing behind walls of shoes, the recent discovery of Joe Herbert being the son of the North America Vice President of Nike Ms. Ann Herbert has blown this entire debate out of proportion. So, what happened? And how did we get here?

October, 2018 was the first time I ever got to visit Tokyo, whilst on tour with a band from the United Kingdom. A city that cannot be described in words, it is possibly the only realistic time capsule of streetwear culture and fashion in its truest form. I wasn’t really able to pin point it specifically, but it really hit me when I walked out of the train station and laid my eyes for the first time on the Atmos store in Harajuku.

The story of Atmos and its founder is probably the archetype of the modern-day reselling business. Hommyo Hideyumi was a student in Philadelphia during the 90’s and it was during this time that he got the bug for trying to find and buy the rarest sneakers.

In the Vice Documentary about the Japanese Sneaker Culture and its origins, Hideyumi explained how he would find rare Nike sneakers in random places and situations for 20-30$ and bring them over to Japan, a market that wasn’t even introduced to the variety available in America and started reselling them. From there, he ended up opening a resale store called ‘Chapter’, eventually leading to the formation of Atmos – one of the premier shoe stores in all of Japan and the Eastern Hemisphere, marked by its iconic collaboration release with Nike – the Air Max 1 “Safari”.

At the same time, with the boom of the internet in the early 2000’s, forums like Nike Talk and websites like eBay became the place where people would come find news about sneakers, try to find how to buy them or sell them online to people in and around their area. The same was then transported to groups on social media once Facebook became popular.

But it was in 2015 that Josh Luber, Dan Gilbert, Greg Schwartz and Chris Kaufman came together and completely changed the industry on its head. They created StockX, which was essentially – a stock marketplace for sneakers, streetwear and even Rolex’s. This democratization of reselling essentially created an environment where the consumer decided the market price beyond what was retail. This innovation also coincided with one of the sneaker industry’s biggest releases of all time – the “Ten” Sneaker Collection by Virgil Abloh for Nike.

Ten iconic Nike sneakers reimaged by the hottest fashion designer at the time – creating a cascading effect amongst all the people in the culture. This was only made stronger by the Yeezy collaborations Kanye West had with Adidas. With StockX becoming the biggest platform in reselling, many other companies came on to do the same thing. At the same time, just like Hideyumi back in the late 90’s and early 2000’s, many kids around the world started setting up and opening small stores where you could find the rarest and most hyped sneakers or clothes. So where did it all go wrong?

Instagram. Oh Instagram. Everyone’s favorite application intentionally created to exhibit the effects of an addictive painkiller. The resale market obviously didn’t leave this platform out either. From whiz kid celebrity stories of the likes of Benjamin Kickz, Instagram really took the reselling business to another level. With an innumerable amount of reselling pages, getting your favorite shoe that you weren’t able to buy for retail is easier than ever!

But that’s the thing, after a certain point of time, it’s only obvious to ask – why is it that you can’t buy anything for retail from the brands that sell the shoes? Why is it that someone has to almost always buy from a reseller at an elevated price? And most importantly, why do companies as big as Nike and Adidas not have an issue with platforms like StockX or resellers on Instagram selling shoes for inflated prices?

After Kanye West and Virgil Abloh, it seemed like brands were more than open to collaborate with all kinds of individuals, right from Pharrell to J Balvin. The hype train was going faster than ever. With releases coming in every other week, even in the lockdown world of 2020, it seemed like the collaborations were endless – but hardly anyone was getting their hands on them.

At the same time, resale companies and profiles on Instagram were swinging pairs left, right and center. One such page was West Coast Streetwear. The page would most of the time feature a picture of a young boy with his face blurred out, standing behind a mountain of the newest Nike or Adidas drops, many a times even before release day!

And this is not an outlier - pictures like this have been popping up in recent years all over Instagram, with these practices even spawning popular memes. Sneaker bots (i.e. computer programs/code that essentially help you with a quick checkout on any website) also started becoming popular, creating another hindrance for someone just trying to get a pair they like from an official website. It’s safe to say that the environment was and has been tense. But then on March 11th/12th came major news – longtime Nike Vice President Ann Herbert had resigned from her post after being a Nike employee for more than 20 years.

This came after a Bloomberg Businessweek article essentially found out the identity of the boy behind West Coast Streetwear – Joe Herbert. Joe Herbert who? Joe Herbert son of Nike’s Vice President Ann Herbert? Yep. Not only did the article question the integrity of sneaker resellers and the processes they indulge in to get ahead of normal customers, but how there was a clear conflict of interest with Ann Herbert being the Vice President of North America for Nike. The article not only talks about Joe and his process, but also how the entire industry has moved from retail to resale.

Shockingly, it was only by sheer accident that the people at Bloomberg found out about the connection, as Joe used his mother’s number for an interview with them. While Joe mentioned that there was no conflict of interest and that he did not receive any insider information about Nike shoes or launches, he asked for this information not to be revealed in the Bloomberg article. However, it’s safe to say that when the article came out, it ruffled some feathers.

At this point, Nike is holding a personal audit to look into the actions of Ann Herbert to see if there were any instances where information was shared or tips were given out to Joe or even other resellers beyond Joe himself. For a community that includes thousands that work crazily to make a living or continue to fly the flag of the culture proudly, this comes as a big jolt to the essence behind the community.

With an environment that was already questioning practices of companies and the reselling market, the revelation of Joe Herbert, the subsequent resignation of Ann Herbert followed by an on-going investigation is probably one of the biggest low points of the sneaker culture.

Consequently, it has become even more important for companies at the helm of the culture to come forward and create a new business model – a business model that provides equal opportunities in an open and free market, but a model that also creates an environment of entrepreneurship without destroying the essence of the open and free market.

The Sneakerhead and Streetwear Community is a proud community and supports its makers solidly. However, if companies continue with such practices that essentially devalue the customer and continue to create sneakers into assets as opposed to pieces of art and culture, the same people who support them now, will have no choice but to turn on them and fight back.

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