To put my previous post in perspective I will provide two different examples of how sneakers are valued, and a breakdown of the investment, in today’s market. My hope is to provide an insight on the monetary cost/benefit analysis that go into valuing a pair of sought after sneakers.
A few years back, Nike released a pair of Lebron Vs that were limited editions featuring a New York Yankees theme. There was a marketing buzz created by local media surrounding the sneaker because of Lebron’s ties to New York although he is an Ohio native. Further, Nike perpetuated the buzz by releasing the sneaker in certain stores and bundling the first 50 pairs with free tickets to a basketball game. So there was high level of hype and a low supply; all elements that would have the sneaker at a high resell value. The sneakers released and retailed for $200.00. The initial resell value was in the thousands. However, it only sustained the high resell value for a limited time and changed dramatically over time. This effect is similar to “short selling”, when an investor buys low and sells high in a fixed period of time to avoid depreciation. Understanding this phenomenon that occurs in the subculture could help consumers make an informed decision on valuing and buying sneakers in the secondary market. Further, it shows why enthusiasts wait in line for hours to buy limited edition sneakers and pay high retail prices (compared to industry standards) to avoid higher resell inflation prices.
Highly Anticipated Lebron V Sneakers
In the other example, I examine the popular Air Jordan XI sneaker released in 1996. Although there have been retro’s of these sneakers, I am discussing a dead stock, original pair that retailed for $124.99. Remember, there is value added to these sneakers because of their condition leading to a secondary market value reaching $500.00 max. With both the initial price and resell price we can set up a hypothetical equation to detail how much value has accrued over the past 14 years for an individual that possesses such grails. First, we subtract the initial retail price from the appreciated value. Take that value and divide by the number of years (14). The equation gives us about $26.79. This signals that the initial investment to buy the sneakers in 1996 yields an increase of value at the rate of about $27 per year. These implications simply highlight the hard fact about investing in anything. Of course, this example fails to acknowledge the fact that there are arbitrary spikes in value for sneakers. There could be high initial resell value or it could take years before a sneaker sees a significant increase in value. Also, the value could reach a peak and plateau regardless of the time that has passed.
Most Sought After Air Jordans
One thing I should note is that not all sneakers experience this phenomenon of an increase in value. For the most part, the sneakers that are sought after by enthusiasts in the sneaker subculture do gain value. Or else they would not likely be a sneaker held with a high esteem within the community. It is the desire to obtain these sneakers that create its value. I find it paradoxical that the desire of a sneaker perpetuates its value and vice versa. Like I have mentioned before, sneakers are simply just sneakers at the end of the day.
I got SOLE. 