Why These Sneakers Cost as Much as a Car

An in-depth look at how people end up spending tens of thousands of dollars for sneakers that might've originally retailed for a hundred dollars.

by Jian DeLeon
Apr 18 2016, 4:00am

The Air Jordan 4 Retro is priced at $20,000 at Stadium Goods. Eminem and the Jordan brand collaborated on this release in honor of the 15th anniversary of the 'Marshall Mathers LP.'

In 2007, I moved out of my parents' house in Northern Virginia by selling my sneaker collection. I probably had about 80 or 90 pairs at the time, all of which I'd bought with money scraped from a part-time job at Urban Outfitters. Each pair was copped in DMV-area stores like Commonwealth and Major. I didn't consider myself a true "sneakerhead" back then, since a lot of my collection was general release stuff like Nike Dunks, Vans Sk8-His, and a few of Adidas's early "Adi Color" collaborations. But I had a couple of legit gems, like the MF Doom Nike Dunk SB Highs and a few pairs of Vans done with cult Japanese label WTAPS and designer Marc Jacobs—probably one of the first high-profile fashion sneaker collabs.

I didn't really want to part with Jacobs's trompe l'oeil Slip-Ons that emulated the Old Skool, but the thought of living in my first "adult" apartment in the city outweighed my desire to flex. I knew absolutely nothing about the sneaker aftermarket, and most of them had been worn, so I sold them all in one big auction on eBay. I made about $4,000. It was enough to cover my first month's rent and security deposit. Once that was taken care of, I did what any sensible person would do—I spent the rest on new sneakers. Soulja Boy had just dropped "I Got Me Some Bapes," after all.

Four years later, I moved to New York and started working at Complex, which began my proper education in sneaker culture. One of the first people I met was Russ Bengtson, a senior editor who's been writing, wearing, and thinking critically about sneakers for the better part of 20 years. He doesn't remember the last time he counted how many pairs he owns, but he estimates it's in the thousands. He rotates around 100 pairs that are immediately accessible to him, with a bunch in a storage space in Long Island.

Bengtson began looking at sneakers like collectors' items instead of pragmatic footwear around 1994 or 1995, when he bought a pair of Jordan "retros." Retros are reissued versions of shoes that originally came out in the 80s and 90s, when Jordan was cementing his legacy on the court. It isn't just rarity that can drive up the demand for the kicks—it's also their cultural cache, and most importantly, being in "deadstock" condition.

Deadstock is a retail term that applies to merchandise that sat on the shelves, never sold, and was pretty much left forgotten in a warehouse or a back room. In the sneaker world, the term has come to mean a pair of shoes that's still in-the-box fresh, despite being years—even decades—old. It's a mint condition, wearable time capsule. A pair of deadstock kicks is more or less a holy grail.

The Air Jordan 11 Pantone/White is priced at $10,000 at Stadium Goods. This sneaker was released in 2010. It was only supposed to be made for display purposes. It was re-released as a set in 2014.

Early sneaker resellers scoured mom-and-pop sporting goods stores for unsold treasures, like a limited pair of Air Force 1s or Air Maxes, kicking off the demand for deadstock sneakers. Now, the search for deadstock sneakers has gotten so intense, there's even a Toronto sneaker store that's adopted the term as its name. And depending on a sneaker's rarity and consumer demand, a pair of genuine deadstock kicks can command up to $23,500, like a pair of ultra-limited Undefeated Air Jordan IVs for sale at Stadium Goods. Those shoes are notable not just for being the first time the Jordan Brand collaborated with a third-party company, but also the fact that only 79 pairs were made for public consumption.

"It stands as one of the few Jordans that have been limited like that," says Bengston. "Owning a shoe like that—given how few there are—is sort of a badge of honor for some people, where it becomes sort of a 'centerpiece' for your collection."

Sneaker culture often affixes nicknames to certain shoes owing to the moments that made them important. Case in point: The "Flu Game" Jordan 12s, a pair of black-and-red high-tops equally inspired by the Nisshoki Japanese flag and a pair of 19th-century women's boots. The shoes were made famous in game five of the 1997 NBA Finals, when Jordan endured a case of food poisoning to help lead the Bulls to a two-point victory over the Utah Jazz. The sneaker was re-released in 2003 and 2009, and is currently valued around $650 on the aftermarket for the 2009 versions. In 2013, former NBA ball boy Preston Truman auctioned off the actual game-worn pair, netting $104,000.

The Air Yeezy Net/Net is priced $3,000, the Air Yeezy Zen Grey/Light Charcoal is priced at $3,250, and the Air Yeezy Black/Black is priced at $3,500 at Stadium Goods. Each color way originally had a suggested retail price of $215 and sold out almost immediately.

It wasn't always this way. Bengtson remembers burgeoning sneaker culture had a very different mindset. Sneaker and hip-hop figurehead Bobbito Garcia wrote the tome on NYC sneaker culture's early days in 2003, Where'd You Get Those?, where he talks about how attitudes in the inner-city toward sneakers evolved from 1960 to 1987. Back in the day, flexing on your peers was more about finding a brand or model they'd never heard of and one-upping them with the diversity of your sneaker knowledge and corresponding collection.

"Somewhere along the line it changed from wearing things that people wouldn't know what they were, and now you wear things that people know exactly what they are, and you just want to make people jealous because they don't have them," says Bengtson.

Around the mid 2000s, sneakers went from a niche hobby to a cross-cultural obsession. Stüssy began releasing coveted collaborations of the Nike Dunk, and Nike began its foray into skateboarding, enlisting an eclectic Rolodex of artists like Futura, De La Soul, and Pushead to make limited-edition sneakers that sold out instantly. Sure, some people skated in them, but most didn't. A lot of people realized they could resell them for way over the retail price.

Flight Club opened its doors in 2005 as a new type of sneaker shop. It didn't order kicks wholesale and sell them at retail. Instead, it provided buyers and sellers alike with a platform to sell their shoes on consignment. The revolving stock was fueled by the principles of supply and demand. People were willing to pay a premium to get a pair of shoes that had sold out in their size.

As Bengtson puts it: "Where else can you buy something for $150 to $200 and literally have it immediately be worth $2,000?"

The Air Foamposite One Paranorman is priced at $5,000 at Stadium Goods. The sneakers were released in late 2012 and pay tribute to the film 'Paranorman.'

But how are those prices determined? According to Yu-Ming Wu, founder of the website Sneaker News and partner at recently opened retail resale shop Stadium Goods, they consider the entire marketplace.

"We generally have an idea of what market prices are like at the moment," says Wu. "We like to be fairly competitive in terms of those prices. We look at the market as a whole. Not just direct competition, but what it's looking like on eBay, the smaller resale shops, apps, and third-party marketplaces."

Indeed, the Flight Clubs, Stadium Goods, and RIFs of the world aren't the only places to buy deadstock sneakers. While they offer a white glove experience and the instant gratification of being able to take your kicks home that day, often the prices add a premium to the existing premium. Sellers get 80 percent of a sale, and the other 20 percent goes to the shop. Part of it goes to the convenience factor—you just drop off your shoes, and they take care of the rest. Another is the fact that any shop with a physical location has the bills that go with it.

"Somewhere along the line, it changed from wearing things that people wouldn't know what they were. Now, you wear things that people know exactly what they are, and you just want to make people jealous because they don't have them." — Russ Bengtson

In order to avoid potentially losing some money, some resellers have flocked to other points of sale. There are smaller resale shops, resellers who operate on social media platforms like Instagram, sneaker-resale specific apps like Kixify—and of course, eBay. The sprawling online marketplace comprises about a third of the sneaker resale market, according to Josh Luber, who founded the sneaker resale data site Campless in 2012, where he aimed to quantify sneaker resale prices through data analysis.

He values the US sneaker resale market at about $1.2 billion, about 400 million of which is eBay sales. What's important to note is that the resale market and the global footwear market, which is worth about $55 billion according to NPD Sports Industry Analyst Matt Powell, operate concurrently of each other. Most companies like Nike and Adidas make plenty of money readily selling easily available offerings like the Roshe Run, Stan Smith, and Air Monarch. But the resale business trades in the currency of products with a different value proposition—street cred and perceived rarity.

LeBron 9 Low Arnold Palmer is priced at $7,500, and the LeBron 8 Retro South Beach is priced at $1,500 at Stadium Goods. The "LeBronold Palmers" were never actually released in stores, making them highly coveted. The South Beach sneakers represent LeBron's move from the Cleveland Cavaliers to the Miami Heat.

Because of that, oftentimes a shoe is only worth as much as a customer is willing to pay for it.

"There's a high degree of variance in the prices in the resale value for sneakers," says Luber. That's one of the reasons why he recently transitioned Campless into StockX, a price guide and marketplace based on real-time data and market analysis. StockX uses data from eBay, consignment shops, and other resellers in order to give its historical pricing and market prices the broadest purview possible.

"We just feel like more information is better for a consumer or a sneakerhead," says Luber.

On peer-to-peer resale platforms like Grailed, coveted sneakers can go for much more or much lower than their supposed market value.

"When it's peer-to-peer, and you take out a governing body, for lack of a better word, shit's kind of all over the place," says the Grailed Brand director, Lawrence Schlossman. "It comes down to how fast you wanna move something—I think that affects case-by-case stuff. But you also have people who have no idea how much a sneaker's worth and are trying to sell Yeezy 750 Boosts for $7,000."

In other words, part of making a big profit reselling kicks involves patience. But if you're after liquidity, you're at the mercy of the market. StockX is fully aware of the outliers on sites like eBay, which is why it only takes into account sneakers that have sold, not active auctions where the asking price may be much more than how much a particular shoe is valued.

A shoe is only worth as much as a customer is willing to pay for it.

One of the biggest problems facing the sneaker aftermarket today is the rise of extremely high-quality fake sneakers. Some of which are actually purportedly made in the same factories as the "legit" versions, except maybe outside of the bounds of a contract, or with slightly different materials. StockX fights this by having any sneaker it sells sent to their Detroit headquarters to be authenticated by its team. Luber employs a person who's tasked with studying fake sneakers. The company has a hard-line approach to authentication—they'd rather err toward the likelihood that a sneaker is fake, rather than compromise their principles on the chance something may be legit.

"By doing that, both buyers and sellers have one hundred percent confidence that what they're buying and selling is real," says Luber.

The Air Jordan 5 Retro T23 Tokyo is priced at $5,000 at Stadium Goods.

That same trust and confidence is the reason why stores like Flight Club and Stadium Goods continue to flourish. For kids whose parents are the ones paying, or wary consumers who don't want to get got, that top-of-the-market premium seems like a solid investment for a secure and painless transaction.

"You can walk into a Foot Locker and buy most of the general release stuff, but if you want something hot and if you want to look fresh, we're one of very few options for you to walk in and see that amount of variety," says Wu. "We opened up a very, very big store in SoHo to say, 'This is for real.' When we first opened, we had about nine thousand pairs of sneakers. Today, we have about twenty thousand pairs in consignment, and still growing."

Sneaker value does indeed fluctuate over time, and Luber's team has figured out a formula that revealed an ironic pattern.

"All sneakers—barring restocks from the brand—have basically the same trajectory of resale value over time, and I swear to God, it looks exactly like a swoosh," he says.

StockX offers an "ISO," an "Initial Sneaker Offering," before a sneaker comes out, mirroring other pre-release practices in sneaker culture, where pairs that haven't come out yet are sold to people before they're even available—usually at a premium. That number usually comes down when the sneakers hit the market, but over time, since the amount of deadstock sneakers eventually diminishes (plenty of people just want to wear the damn things after all), pristine pairs become a rarity, and can demand a higher value.

Nike Air Mag "Back to the Future" are priced at $9,000 at Stadium Goods. Inspired by the popular film, these sneakers come with a charger and light up.

"If it's a super rare sneaker that hasn't been sold for years, it's up to what the customer wants," says Yu-Ming Wu. Stadium Goods will often work with a seller to come up with a price based on market value.

But what about worn sneakers, like the ones that got me out of my parents' basement? According to Luber, there's still a market for them—but deadstock pairs dominate about 75 percent of the market. At that point, the value proposition transforms from authentication to overall condition. And for Luber, that's harder to quantify, and even harder to scale. Each pair would have to have specific photos highlighting the condition, a work-intensive process he doesn't think is worth the investment.

Of course, the prices are much less than deadstock sneakers, but that makes them an affordable option for people who don't mind buying slightly scuffed kicks they can still wear. There are plenty of worn pairs on peer-to-peer resell sites and eBay. Brick-and-mortar consignment stores like Ina, Tokio 7, Beacon's Closet, and Buffalo Exchange in New York City are equally rife with gently used (and not so gently used) sneakers for decent prices.

You have the Nike Roshe Run and the Yeezy 350 Boost. To an outsider, they look pretty damn similar. But to insiders, one is on one level, and [the other is] just fresher. —Yu-Ming Wu

Meanwhile, the demand for deadstock sneakers continues to grow. They've transformed from cult objects into status symbols, and like any fashionable luxury item, the right pair of sneakers can both make a person look good while communicating something about their spending power. Whether or not you got them at retail or paid the aftermarket price, people will still want footwear that makes a statement.

"It's like girls and their luxury handbags—boys with their cool-looking sneakers. Very few people will understand the difference between a $800 Coach bag versus the $4,000 Chanel bag. To the outsider, who doesn't really see fashion on that level, it's just two leather handbags," says Wu. "For us, you have the Nike Roshe Run and the Yeezy 350 Boost. To an outsider, they look pretty damn similar. But to insiders, one is on one level, and [the other is] just fresher."

All photos by Elizabeth Renstrom. Follow her on Instagram.

All styling by Priscilla Jeong. Follow her on Instagram.

All words by Jian DeLeon. Follow him on Twitter.

All of the rare shoes photographed were provided by Stadium Goods. Check out their website.