Nike as a Pioneer | stopbotsandresellers

Sneaker Reselling Stems from Nike

So whether it is Supreme, Jordan, Nike, or Yeezy, experts look into what the root of the reselling problem is. It seems obvious as an average consumer or someone from the outside looking in. Stop resellers, right? It may appear that resellers are solely responsible for the jacked-up resale prices and the limitation of the already incredibly rare items sold by some of the most popular brands in the world. In reality, resellers are just the scapegoat, what everyone likes to blame the problem on when actually, they are the only ones capitalizing on a very flawed market, flooded with consumers that have no self control. In rare street wear, there is no such thing as bargain shopping, nor should there be, but many consumers today have taken bidding wars and high prices, to a whole new extreme level. When a product is limited, these days it is worth whatever the highest bidder will pay for it, and some people just don’t know when to walk away. Some consumers are so obsessed with having certain items because they think they will get treated differently or looked at in a different way, so they are willing to pay multiple times the retail price so they can have it and others can’t. This works in a smaller scheme with a product with only one or two in existence, but when one consumer drives up the price of a product in which there are 100 or more in existence, this can cause the overall price of the object to rise and resellers will now strive to get that price for the item every time they sell it.

Referring to well known rules of the law of demand, the price of a good will only be as high as what the consumer is willing to pay for it. For an elastic good such as a general release edition pair of running sneakers from Nike or Adidas, as prices increase, a major decrease in quantity supplied can be accounted for, but for a limited edition shoe like the Yeezy Boost 350, as prices increase, there is only a minor decrease in quanity supplied. These rare items can be considered relatively inelastic because even if a reseller charges an absolutely ridiculous number above market value, chances are somebody out there is willing to pay for it. The select few amount of people willing to pay those ridiculous prices were directly responsible for the high average market price.

Classically, the most popular sneaker and athletic clothing in the world is Nike. Many people have a misunderstanding about just how dominant the brand has been since the early 90’s. Nike was founded in 1964 by Phil Knight as the Blue Ribbon Running Company. (Vanderbilt, 1998) Nike’s first venture started with the University of Oregon Track & Field team, supplying shoes for runners like Steve Prefontaine. Prefontaine was a test mule for some of Nike’s most popular and long lasting innovations through footwear.

In 1984, Nike signed Michael Jordan, a rookie basketball player in the NBA out of North Carolina. Throughout Michael’s career he won numerous awards like Rookie of the Year, Defensive Player of the Year, League MVP, Finals MVP, and also won 6 NBA Championships. (Spence, 2011) Many refer to Michael Jordan as the greatest and most iconic basketball player of all time. It is evident that he is the most polarizing athlete of all time because of his brand alone, the Jordan Brand. Jordan Brand was created as a sub brand of Nike because of the rising population of the young star early in his career. Michael was very marketable, and everyone loved him. He first wore “The Swoosh” in his rookie season and wore his own signature shoe for his first two seasons. What continues to be a long and accomplished line of sneakers, Jordan Brand has released 30 signature Jordan shoes with countless non-signature models as well. The first 13 signature Jordan shoes are still very relevant in the sneaker world to say the least, with Nike capitalizing off of the shoes past popularity. Nike releases old Jordan sneakers from the 80’s and 90’s all year in limited quantities, which they call a “Retro”. Retro Jordans have been around since the 90’s and have never sat on the shelves. The demand behind the product is the history that comes with the shoes, most Sneaker heads claim that they couldn’t afford it when they were younger, so they must have a pair now.

The demand for Nike and Jordan products may be starting to fade away, but it is evident that Nike still possesses a massive strangle hold over the rest of the market. Since the 90’s, Nike has owned 50% of market shares for footwear in North America.(O'Connor, 2014) The number is just above 90% in the basketball sneaker world. (Chow, 2014) The Swoosh logo has become so icon in today’s world, that everyone thinks of Nike, anytime the check mark is spotted on an article of clothing or pair of sneakers. Nike has been the pioneer for many other companies in athletic wear, street wear, and sneakers, and the problem with reselling originated directly from the Oregon based company. In 2015, eBay compiled about $338 million dollars in sneakers sales, one-third of all the money spent either had a swoosh or jumpman logo on it. As the internet began to become more available to the average person all over the world in the 2000's, Nike and many other companies, began to release shoes and clothing from an online retail store. This gave customers the ability to stay out of long lines in retail stores and a chance to purchase limited footwear online instead, but a problem for consumers came along with it.