The concept of the resale market is not a new one. Since the dawn of time, humans have always been entrepreneurial creatures, learning how to barter and trade their desired items for money or something of equal value. Case in point: the amount of unscrupulous resellers online attempting to resell medical masks at exorbitant prices during these trying #CoronaVirus times.
In the streetwear resale market, limited edition sneakers are akin to what medical masks are to a germaphobe. In fact, thanks to the streetwear boom in the recent years, the sneaker resale market is currently a US$2 billion industry and projected to be worth US$6 billion by 2025. And with fashion taking a more casual shift then it has in years (just take a quick look and spot just how many people are walking about in sneakers and atheleisure), streetwear is no longer a niche market, but a commercial and extremely lucrative one.
Now that’s a whole lot of people paying a pretty penny for sneakers.
The Law Of Supply And Demand
Simply put, whenever there is limited supply, there will always be demand. This was something that *Kelly, a local reseller learnt. A lover of street wear and luxury goods, Kelly had accidentally stumbled into the world of reselling when she snagged a pair of Nike x Off-White collaboration shoes.
“I remember the first time I felt like “Wow, this is something I can do!” was when I got my hands on those coveted sneakers. I put a listing on Carousell as a joke with the price five times higher than what I paid for, but within two hours someone confirmed to buy it. He paid me in cold hard cash,” she tells us. “This then became a thing where I would buy exclusive stuff that I liked and then try to make money out of it. But if I don’t, or don’t feel it’s worth it, then I keep it for myself to flex.”
While how much Kelly can make fluctuates, on average she makes about $SGD 2,000 – 4,000 just from reselling. And on a good month where she has several in-demand shoes in her inventory, she can earn up to $SGD 5,000 – 6,000 just from reselling alone.
For Gijs Verheijke, founder of locally-based sneaker resale platform Ox Street, his motivations were slightly different. An avid sneakerhead himself, he was frustrated with the poor buying experience he faced when he tried hunting for a pair of Adidas NMDs on the resale market within the region. He was having difficulty searching for them online due to unreliable listings. And when he did find them, weeding out the fakes and dealing with flaky sellers were also issues he faced.
Having worked for Rocket Internet, a venture capital company that specialised in investing and incubating online startups, he already had the experience of launching several marketplace startups in South East Asia and enjoyed the challenges he faced professionally. It’s this combination of professional and personal motivations that led him to start up Ox Street.
Hype Is King
While anyone can be a reseller, rarity is king. Hype has now become a valuable commodity. Or maybe it always has, we just have a term for it now. And while you can’t buy your way into being “cool”, you can however deck yourself in some of the most coveted items on the Internet. So how does an ordinary person like Kelly get exclusive dibs on her hard-to-find merchandise? It’s all about her relationships.
“It’s so important to have a good rapport with the retail staff. I buy from their stores regularly and make an effort to build a relationship with them. I buy them treats when I visit and get them souvenirs when I travel,” Kelly shares with us. “Most importantly, I trust their opinion when I’m buying from their stores. You’d be surprised how many people would ask for an opinion without actually listening to what they have to say. We then exchange contacts and they start by telling me when the sales start and I would tell them the items I would like to obtain. Slowly, they start reserving exclusive stuff for me or even help to purchase those items for me first.”
As we spoke with Kelly, all this sounded…doable for the average person. Until she reveals her secondary source—an invite-only secret telegram chat where membership was a hefty one-time fee of $SGD 2,500 to get in. “It was worth it though,” she admits. “There’s around 20 of us and we can tell the group chat admins the items we are trying to obtain. It can be a picture of a runway shoe or a vintage piece a celebrity wore. They will then find a way to get it for you with the agreed price on top of an additional sourcing fee. Sometimes the admins would also create an order list for exclusive items that are launching, and then the sourcing fee would be shared among the people who are interested in the item.”
But How Do You Snuff Out The Lowballers And The Fakes?
For Gijs, Ox Street only works as the infrastructure to connect the two sides of the market. The sellers are the ones with the access. So how does he convince sellers that his platform is worthy? By making the transaction as hassle-free as possible. All the seller has to do is hand the shoes to the courier and Ox Street will handle the rest.
“We are WAY faster, most times getting shoes to the buyers by the 3rd day, and we go out of our way to make the experience as easy and fun as possible for both sellers and buyers. That makes our customers our biggest promoters, and trust spreads best by worth of mouth,” he shares with us confidently.
Simply put, all that low-ball, fast deal, meet up only at Chua Chu Kang MRT nonsense that you have to deal with on platforms like Carouhell Carousell? Eliminated.
Besides, Gijs’ relationships with the seller community is not just detrimental to the success of his platform, but a source for authentication as well. In a market that is so dangerously peppered by extremely realistic fakes, this is of the utmost importance. “Our authentication process is layered and relies on our own database and where needed, our seller community,” Gijs explains. “We always have access to a real pair and with that as a reference for comparison, we can snuff out even the best fakes.”
And as an added safety measure, Ox Street promises to immediately offer a refund if an item you bought from the platform is found inauthentic or not as described.
The Art Of The Flex
So, what is it about this business that attracts people like Kelly who has a full time job and only supplements her income with this on the side? “I think the appeal for these items is the fact that I can own something that you can’t get,” she confesses. “It’s like a rush of adrenaline when you get those items. It’s like an unspoken cool club that you can enroll in for the time being until the next big thing comes.”
“I managed to snag my hands on a pair of the Dior Oblique low cut men’s sneakers a week before it launched because of the relationship I had,” Kelly continues. “It was so sought after on Instagram at the time and all my friends were talking about it. I eventually sold it of course, but that was one of the items I was really excited to buy.”
The temporary rush might be what drives resellers like Kelly. But fashion is fleeting and frequent new drops and collaborations can cause the demand for past items to wane. Plus, the ability to turn a massive profit can sometimes be more rewarding than ownership of the desired item. “I try to get two of the item if I like it. If not, I will judge if the price is worth it. But I’m not above selling something even if I loved wearing it,” Kelly shares. “If someone offers me more than 80% of what I paid for, I’ll usually let it go.”
While some might call Kelly entrepreneurial, there are others who think that resellers deserve a special place in hell. Because of the high profit margin, many resellers actively buy out the primary market and inflate the prices on the secondary market. This in turn has generated hate from the public towards resellers for “spoiling the market”.
Gijs however, disagrees. He thinks the positive outcomes of access and transparency outweighs the negatives. “Back in the day, you could only get certain releases if you had the right connections, was that really better?” he argues. “We are living in a time where the entire world is connected through their smart phones. The challenge has shifted from access to curation, which I personally think is great!”
The Death Of Streetwear
But ultimately what comes up, must also go down. The fashion industry loves extremes, and streetwear is not exempt from that. After years of being the shiny new toy (to the mainstream fashion consumer, not the underground street movement that’s been around for years), the industry is ready to move on to the next big thing. Even Off-White founder and Louis Vuitton’s menswear director Virgil Abloh declared in 2019 that streetwear is “definitely going to die.” And with streetwear being the main focal point of the resale market, what does that mean for them?
“The way I look at it is that we are riding two unstoppable trends. One, the future of fashion revolves around sneakers,” Gijs shares. “Even Goldman Sachs allows sneakers in the office now. I firmly believe that in 20 years nobody will be wearing high heels to work anymore.” If anything, Gijs thinks that this is all just semantics. He strongly believes that the luxury market will just merge with streetwear and eventually be renamed and marketed as something else.
And with climate change and sustainability on the forefront of many young millennial women’s minds, the resale market is also a great way to reduce our consumption. “Secondly, this will help to promotes alternative ownership models for clothing and minimise harm to the environment,” he continues. “I would love to be able to resell my used sneakers after 10-20 wears so that I can keep refreshing my rotation without creating a lot more waste. And with the resale market for fashion being projected as one of the fastest growing markets, I know I’m not alone in this.”