Let’s say you want a pair of rare, discontinued sneakers, like Nike’s Air VaporMax. You could look on eBay, or on any of the several sneaker-centric websites. But even if you find your desired kicks, how can you be sure they’re authentic? And how do you know if the seller’s asking price is fair?
For an increasing number of sneakerheads, the answer is StockX. Launched in 2016 and already valued at more than $1 billion, StockX bills itself as the “Stock Market of Things,” which for now means mostly rare, limited-edition sneakers but also includes streetwear, watches, handbags, collectibles, and other coveted lifestyle accessories. StockX provides a place for buyers to connect with sellers—using financial exchanges as a model, complete with value graphs and portfolio tables. “It’s a new way for consumers to connect with sellers using a mechanism that’s used by the world’s stock markets,” says Chief Marketing Officer Deena Bahri, a sneaker veteran who was once marketing director at Reebok. “There’s anonymity; there’s real-time market pricing; and there is StockX as the guarantee of authenticity.”
For instance, if you go to StockX’s Air VaporMax page, you can see several pairs for sale, along with how much the shoes have sold for during the past year. If you buy a pair, the seller will send them to StockX, where the company’s in-house authenticators will ensure that you’re getting the real thing, not a counterfeit. Once everything is deemed legit, they’ll send the sneakers to you.
Here Bahri discusses “sneaker IPOs,” the threat of sneaker bots, and how the company roots out frauds.
How does StockX differ from better-known online marketplaces, such as eBay?
For starters, the platform provides a real-time pricing dynamic and a lot more transparency to both sides of the market around who’s interested in the product, and what is its true, actual price. A second differentiator is that we are authenticating the items and ensuring that these are exactly the real items you paid for—that they aren’t fake or damaged. And the last thing is the anonymity. There aren’t these questions of, “Who is this seller? Are they legitimate? What are the reviews?” You can rely on StockX as the source of truth for that.
Counterfeiting is a big concern in the sneaker market. How does StockX ensure authenticity?
We have over 100 authenticators across the globe. Most often they’re interested in the job because they love the products. Many of our authenticators come to us with years of knowledge from retail or as collectors themselves. We have a 90-day training program that teaches them all about the “tells” of real versus fake product. In the case of sneakers, that could be something about the shoebox or the packaging, or it might be the product itself. We look for wear and tear, because all of the footwear that we sell is deadstock—meaning the items are brand new, have all of the manufacturer accessories, and of course, are unworn. They have a whole checklist of items they screen for.
Today we’re at a 99.9% success rate, meaning 0.1% of the products that come through our platform are deemed to be fakes or rejected due to quality standards. When we launched, just to give you some context, that number was closer to 15%.
From a devil’s advocate perspective, someone might say you have an incentive to approve everything, because you don’t get the transaction fee if you reject an item.
Our success depends on the happiness of our customers—buyers and sellers. If we try to please one side of the marketplace, the other side will go out of balance, and that will hurt us. So we have equal incentives to make buyers happy and make sure they’re getting the product they’re paying for, while also satisfying the sellers. We believe we’ll be successful if we do right by both sides.
You’ve partnered with brands to launch new designs through StockX—sort of like sneaker IPOs. How does that work?
This is one of the innovations we’re extremely excited about. It’s a direct-release method that empowers buyers to set their own retail price. Traditionally, a manufacturer would determine the price, but we’re flipping that on its head and saying, “Buyers, you tell us what the fair market price should be for a given product.”
We recently launched an IPO with Adidas MakerLab. The IPO featured three exclusive pairs of reimagined adidas Campus 80s, each designed and produced in 10 days by three different designers. Each sneaker was limited to just 333 pairs that dropped directly on the StockX platform, never to be restocked or re-released.
Adidas launched the product exclusively on our platform using this IPO mechanism We saw incredible demand, but also incredible dynamic activity around the pricing. It empowers the customer to set the market value for the items without needing a retail price, and it often allows buyers to win an item for less than what they were initially willing to bid.
In a world where customer data is everything, this is also a way for brands to gain added insight into the true market demand for a given product. We think this has the potential to change the way products are brought directly to the consumer on our platform.
Given that computers increasingly trade stocks electronically, do you consider bots—specifically the sneaker bot—a concern, an opportunity, or a mix of both?
Bots are part of what makes these products hard to find and hard to access. As long as the product is listed on our site, any person has the opportunity to obtain that item at any time. So in a sense, our platform is helping to alleviate that stress of the bot stealing the demand side of the market. On the other hand, a lot of consumers do use bots to participate in the latest drops. They are often used by what you might call power consumers, who would opportunistically use the bot to get the drop, and then resell on our platform.
It’s like any technology—you have to think about how it helps to foster good engagement and positive dynamics and then how to neutralize its negative impacts. So, I would say it is a mixed bag. But we do believe that our platform helps equalize the playing field for the average consumer who gets boxed out by the bot activity.
You’ve mentioned China as an opportunity for growth. What do you see as the biggest challenges ahead for StockX?
Like many brands that are experiencing hyper-growth, we face the challenge of moving fast and continuing to be creative, dynamic, and flexible while also implementing the process and structure that allow you to scale efficiently at a global level. So, it’s really that balance of moving fast while also moving methodically.
Last question: Are you wearing sneakers right now?
I’m working from home right now, so I’m barefoot. But I’ll tell you what, since I started my job at StockX, my heels have barely seen the light of day! I have a long history working in sneakers, going back to my Reebok days, so I have a pretty good sneaker collection. They’re in heavy rotation, now more than ever.
This article was created for and commissioned by StockX.