04/02/2020 ~ JVG

As of the last few weeks, 2020 has been a weird year, to say the least. With such a major hit to so many sectors in the economy, it’s worth asking:

Will the sneaker resale economy survive in 2020?

Many people’s jobs were lost–our heart goes out to them–but the good news is that on March 26th, the US government announced a historic $2 Trillion dollar stimulus package, a big chunk of which is going out to individuals (here is the official link to how much money you can get and how to get it for US citizens).

Financial education and analysis is important in any business, and the shoe resale game is no different.

So let’s jump into an analysis of what to expect in 2020 economically for reselling.

The black Swan of 2020: Coronavirus

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Quarantine yourself, it’s coming to a town near you.

A black swan (coined by Nassim Taleb), as defined by Investopedia, is “an  (unexpected) extremely rare event with severe consequences (which) can cause catastrophic damage to an economy”.

It goes without saying that COVID-19, colloquially known as Corona Virus, is the great big black swan of the year 2020, which was going quite swell otherwise.

So, when it comes to sneaker buying and reselling, how will the big bad Corona hit us?

Interestingly, there is some surprising good among the bad, and although we cannot be entirely certain, the silver lining can be tremendous for buyers and resellers alike.

We urge you on if you think that previous statement is crazy.

The Sneaker REsale Market

From the StockX app, these are the upward charts that we see consistently with sneakers that the stock market rarely sees.

First of all, nothing is like the billion dollar aftermarket of sneakers.

Bigger than entire corporations, this market is minting new self made entrepreneurs daily and is the perfect vehicle to learn how to do business.

There are a few good signs regarding the sneaker resale market continuing.

Many sources like the New York Times have stated that the market is likely to triple by 2025, going from an already big $2 billion to a whopping $6,000,000,000 (yes we wrote out the billion so you see how big that number is–a thousand million).

Big money firms like Cowen and Company are now recognizing sneakers as a legitimate alternative investment class.

Let’s see why this praise may hold true now more than ever amidst the current financial crisis.

The Stock Market Free Fall of 2020

Although the sneaker market hasn’t been affected too much, the DOW, on the other hand, has been hit hard.

The biggest drop in history of the stock market happened a few times in 2020–this is pending any updates (here’s a link to an updated Wikipedia page on this matter).

There has never been a time that the stock market has tripled in 5 years, the quickest stock market triple was between the 2008 crash and to May 2017, the beginning of the most recent multi annual bull run.

Since at the time of this writing in late March 2020, the stock market is roughly at the level it was 3 years ago, it has a long way to go before recovering.

Despite a strong move upwards following the announcement of the stimulus package, there is potential that this movement would just be a short blip and a futile attempt as the 2020 chart reflects something more like a free fall.

Not even alternative cryptocurrency is doing well in the current moment: Bitcoin surprisingly also hit historic lows with dumping all around, and has yet to recover. Even if it does make it back, it and all other crypto is so volatile that it may not be worth putting hard earned cash into.

Times are changing fast, and perhaps old investment vehicles like the stock market are overrated.

A new economy is unfolding as a result of this whole situation, and like it or not, you must adapt to survive.

A New Economy

Whether we like it or not, working remotely from home is going to be the new normal for probably longer than just a few weeks or months.

Companies were forced to quickly move its teams to entirely remote tasks, which some have definitely struggled with.

With so many companies struggling to adapt because of over reliance on physical presence and offices, some companies are doing fine because they have been remote all along.

Sneaker reselling for the most part is a largely remote, online endeavor.

Buying and reselling can be done right from your phone in the comfort of your home.

For that reason, in the quickly changing 2020, it could be the perfect new skill to learn.

Silver LiningS

Thankfully, as of early April 2020, the stock market has picked back up and the insane drops of March seemed to be a knee jerk reaction.

Also, more and more announcements from all kinds of companies reaching out to help their customers should keep on coming in to keep all of us afloat in these otherwise scary times.

EBay as a preferred sneaker resale platform

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From April 2020, eBay is highlighting sneaker resellers now more than ever.

Of the many sneaker resale platforms out there, interestingly, eBay is emerging as a better option now during these times.

They’re fighting a good fight against the bigger new guys and it seems they might be on their way to winning the game.

Not only have they recently eliminated seller fees altogether for limited sneakers  but also now are proactively offering assistance for both buyers and sellers alike. 

Look out for more companies offering similar assistance in the coming days. For some reason, StockX and GOAT have yet to do anything as of early April 2020.

We’re suspecting that the timeframe of this assistance that companies like eBay are offering could be just as long as the stay at home orders have been–that is, probably much longer than expected, and in this case, we’re happy about this.

Any Symptoms of Decline?

In the early days of Corona hitting the world super hard, in mid March 2020, we actually saw a rise in resale value as we report in this article.

The history of the sneaker resale market has always been strong and growing.

However, we don’t truly know what will happen, but these signs are positive for sneaker reselling, at the least it holds its own as a rock solid opportunity in shifty financial times.

Stay Sharp: No one has a Crystal ball

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As much as we hope for the world to return to normal, this could be the beginning of a long dark period–or not.

Strangely, the stock market had a wonderful bull run in the beginning of April, with some companies like Amazon hitting higher highs than expected.

We don’t know if the doomsday preppers and conspiracy theorists are right, but we do know that either way, it’s smart to remain flexible and open minded to all opportunities and protection against any downfall that this situation may or may not bring.

This piece is actually an excerpt of our 2020 Hypemaster Playbook, to be released soon, because one key to being a successful sneaker resale is financial education and business acumen.

We hope you enjoyed ! 

Good luck, stay healthy and take care,

-JVG