How To Invest In Sneakers “The Ultimate Guide To Holding & Selling”

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Hey! We’re in 2021 but Isn’t it overwhelming to find that there are tons of releases each month?

Yet only a few of these are profitable?

Do you find that after weeks, some sneakers drop in value while some rise to new highs?

Should you ignore, return, sell, hold or pay to resell for more shoes for profit in the future?

I get asked these questions daily, and wouldn’t it be easier if just…

Answer in this quick guide for you now.

I created this for you to make your life easier in the sneaker reselling game written By Hustle The Hype

Will A Release Resell?

The indicators here are:
1. Hype
2. Quantity
3. Colourway
4. Wearable

Hype

Sneakers are mentioned and leaked before their release dates.

The more often or earlier a sneaker is talked about before the release, the more likely there is going to build up hype.

This leads to high demand and higher prices.

Many profitable releases get leaked MONTHS before their release dates and in return have resulted in hype to build up.

At first, people will be critical but closer to release everyone will suddenly like it.

Also known as “herd” behavior. This big time gap allows more awareness to spread.

This is especially significant if whoever leaks it is highly influential during the time e.g Travis Scott or Kanye.

Here’s an example:

Jordan 1 “Mocha” was talked about many months before release.
They released at the end of October for the US and mid-Dec for the EU. Resell is very good considering this sneaker had high stock and was not a part of any collaboration. This 5-6 month wait built up a lot of anticipation and therefore the demand drove prices high for Mocha.

The Jordan 1 MOCHA Will RESTOCK ! | Here is WHERE and WHEN ! - YouTube

While you look at a poorer example, Yeezy QNTM “Frozen Blue” was mentioned a month less than a
month before the official release. The result is that it was not really noticed as there was not enough
time to pick up awareness and therefore, there is not much demand for this sneaker and as a result resell is poor.

Adidas Yeezy QNTM "Frozen Blue" - GZ8872 - 2020

Quantity

This goes down to simple supply and demand economics. If demand is high and supply is low, the prices will increase until it reaches equilibrium. Releases that have lower stock numbers will be more limited. This means there is less competition and undercutting from sellers.

Additionally, some buyers may be aware of how limited a sneaker is. That will make them demand it because its… “exclusive and nobody else has it”.

Here’s a visual example of the price rising:
P = Price
Q=Quantity
S = Supply
D = Demand

Here’s a visual example of the price rising:

Supply shifts to the left (decrease) from S to S1. Now quantity went from 200 to 100.
The result -> If demand stays where it is, the price will increase from $500 – $700.

Colorway

There are certain colorways that release which will likely sell and a common example is red and black.

Also known as “BRED”.

This is common among Jordan 1’s and Yeezy 350 V2’s.

Yeezy sneaker

Jordan

This seems to be an iconic colorway in the sneaker industry and hence it is very sought after by most sneakerheads.

But, also, new colorways can be the trigger for resell.

If a brand reveals a new colorway or pattern that is popular with the masses (It’s wearable!) it is also likely to resell.

Something new always sparks demand for a pair of sneakers as long as it’s wearable.

Some popular and recent examples: Floral, glow, reflective, scratch-off, metallic.

 

Wearable

Simply ask yourself, “Would I wear it?”
A pair of shoes is released in different colorways. It’s very typical to see big brands like Nike and Adidas release a new wild colorway. But also a subtle all black or white version too.

This is their backup in case nobody buys the “wild” colorway.

What you will find is that the wild colorway will be a hit or miss but regardless, the white and black will have some sort of reselling.

Sneaker

This is because most people would wear them and they are safe colors that go with any outfit.

So you need to ask yourself, would you wear it?

If the answer is yes then it’s likely others would too. This means that demand for that release exists and there is an opportunity
for resell.

But, this is not a good enough indicator of reselling alone. Taste and preference will vary per person. You might be a part of a minority that likes weird designs and so if you would wear it, it doesn’t mean everyone else will. So while this factor is important, it should not be the only indicator taken into account.

What Will Happen After Release?

Here are some factors that can affect sneaker prices after their
releases:
1. Herd Behaviour
2. Currency Changes
3. Trade Wars
4. StockX Market Manipulation
5. Sizing
6. OG’s VS New Releases

Herd Behaviour

This involves holding or selling action because of FOMO. (Fear of missing out).

In the past sneakerheads were holding sneakers but it wasn’t very well known.

Ever since 2019 April-June, the attention of certain pairs rising has become mainstream.

Some examples are:

Some examples are:

Jordan 5 x Trophy Room

Jordan 5 x Trophy Room

Nike AF1 x Off-White “Volt”

Nike AF1 x Off-White “Volt”

And a few more.

What’s the result of this? Everyone is holding 80% of releases.

Look at this scenario…

On release day, you can get a good price for your sneakers.

After a week or 2, they would have hit a low.

Sellers who received the pairs in hand start listing their items online, this increases the supply on the market which drives prices down.

Sneaker investors like me will then go in and buy the pairs for cheap.

This will then drive prices back up again.

But here the problem:

There are many more people today deciding to hold pairs than a year ago.

That means there is still a high amount of supply in the “Holding market”.

This high supply means that prices are going to take longer to increase.

As a result, holding is profitable but it’s no longer a 3-9 month game but instead a 12-24 month game for most sneakers.

At this point it’s pretty risky, having to wait this long could hold a large opportunity cost. You could have invested the money elsewhere for a better ROI.

But, instead, it’s tied up for a year or more in a pair of sneakers that aren’t appreciating much because everyone else is holding them too…

This means that the “holding hype” has become inflated.

More people are now refusing to sell their pairs early. This large holding spree means that there is still a lot of competition a year later.

In the past, the majority of supply would have been sold within 6 months.

Then those who were holding can start seeing a rise in their investments since the supply of the holding market was lower.

Currency Changes

Pretty rare for significant changes in price but it still happens. This has more impact on those larger value items like the Off-White collection. Let’s take China, for example, a lot of the demand is from here. If Yuan increased in value there will be a huge surge in demand for sneakers.

That’s why it becomes cheaper to buy them.

Let’s take an example:
(Not actual figures but it keeps things simple)

Jordan 1 = 500 USD = 1,000 YUAN

2019: 1 USD = 2 YUAN

2020: China interest rates increase and YUAN becomes stronger.

Now: 1 USD = 1 YUAN

2020 Jordan 1 price (Still the same): 500 USD = 500 YUAN.

They will save 500 YUAN, so demand will increase and this will push the price of Jordan 1’s above 500 USD.

(This might be more applicable to other currencies because China focuses on keeping their
YUAN weak to boost their exports).

Trade Wars

This leads us to something similar. In the past, the USA and China were in disagreement over trade deals. USA insisted that it should charge consumers extra tax for importing Chinese goods to save the US businesses.

China isn’t happy as it will reduce the demand for its goods from US customers. They retaliate and do the same for US goods. This is all announced in the news before the legal stuff gets implemented. Now, any Chinese sneakerhead who is aware of this consequence will understand that. They will start importing their favorite sneakers before they get a lot more expensive due to the upcoming tax.

They will buy all the pairs they want before this happens. As a result, this will lead to a sudden surge in demand that pushes the prices of sneakers on the secondary market up.

StockX Manipulation

This is a rumor, and I’m not certain if it’s true. But it makes sense. Stockx has become the main market for sneakers. StockX makes its money from fees it charges to buyers and sellers.

The higher the value of the item, the higher the fees.

This makes sense that StockX could artificially increase prices to get more profits from the fees.

Another theory is that sneakerhead investors are creating temporary burner credit/debit cards.

They set bids on StockX.

This is artificial demand and once the bids are met the prices of the shoes start increasing.

Sizing

Certain pairs of sneakers will surge in price based on the size. A common case for Nike is that US 6 – 9 are the highest in demand. (Likely the most common shoe size across men and women).

So, these sizes may generally resell much better than others, a few months after the release. But, it appears that for Yeezy smaller sizes 4.5 – 7 perform better.

This is due to the lower supply of these sizes and they are unisex shoes, so the female customers might equally demand Yeezy as much as men.

But since the stock is lower, the prices will be higher.

Size is a pretty easy indicator too.

Take a look at a release, who can you see wearing it the most? Males or females?

Then based on that information, you can decide what sizes will be the highest in demand.

OG’s VS New Releases

This is very important to note. A new style or model that is the first to release will likely have an initial resell as long as it’s hyped.

As more versions of the same shoe in different colors. The resell prices will dip each time for every shoe released, while the OG (Original) rises in value.

This is a psychological behavior trait. For some reason, we all like the original.

For example Most people like original cola rather than cherry or vanilla.

It’s the same with sneakers. The original style is almost like a status symbol to show that you are in the game longer than others.

Thus they are seen as more valuable and demand is higher.

Take a look at this…
These are the first OG Nike React Element 87

OG Nike

These are the later Nike React Element 87

 Nike React Element 87

These are the first Yeezy with a transparent stripe

 Yeezy with a transparent stripe

These are the later Yeezy with a transparent stripe

Yeezy

Conclusion

Now you can keep this document safe and refer to it if you’re making sneaker investment decisions.

Remember that you are responsible for the outcome and that there is always the risk of losing money.

This just like any other business, with the reward also comes risk.

These factors that I spoke about are the main reasons. But, of course, there are also many smaller factors.

All together they influence what will happen to the value of hyped sneakers.

 


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