StockX: Redefining The Future Of Retail
StockX has reported $400M in revenue for 2020, up from $239M in 2019, but what's next for the sneaker, streetwear, and collectibles resale platform?
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Dan Gilbert, who runs multiple billion-dollar businesses including Quicken Loans & the Cleveland Cavaliers, started to notice something interesting in 2015:
“The amount of interest and activity among my boys and their friends about sneakers was just crazy. Then I start asking other people that have teenage boys, and it’s almost 90-95 percent of the people that I asked said the same thing.”
Dan Gilbert teamed up with Josh Luber, Greg Schwartz, and Chris Kaufman to launch StockX, a premium sneaker and apparel resale company.
Now, just six years later, business is booming.
Let’s take a look…
First, some history.
Before StockX, sneaker buyers had to shift through hundreds of listings, risk receiving counterfeits, and had no idea if they were actually paying a fair price.
With StockX, you’re relieved of all those concerns.
StockX acts as a stock market for the secondary sneaker market. You’ll find a bid/ask pricing system & green-and-red arrows indicating whether prices are going up or down.
The best part?
StockX and their team of specialists authenticate the shoes, ensuring you never receive a counterfeit pair.
In return for creating an efficient secondary marketplace for shoes and apparel, StockX charges two types of fees:
The seller is charged a flat 3% processing fee for each sale and a transaction fee ranging from 8% to 9.5%.
With almost 10 million trades annually, those fees add up.
Now, similar to other secondary resale platforms like Goldin Auctions and eBay, which have thrived during the COVID-19 pandemic for various reasons, StockX has seen an explosion in new business.
In addition to shoes and apparel, they’ve leveraged their existing authentification infrastructure to expand their product offering in a cost-efficient manner.
Today, you’ll find everything from $5,000 Air Jordans to a $70,000 Louis Vuitton x Supreme Trunk on StockX.
2019: $239 million
2020: $400 million
Furthermore, the company has added celebrity investors like Mark Wahlberg, Scooter Braun, Kalie Kloss, Steve Aoki, Marc Benioff, Eminem, and more.
The craziest part?
StockX raised $275 million at a $2.8 billion valuation in 2020, meaning Dan Gilbert’s third business is now worth almost 2x the current Cleveland Cavaliers valuation.
As for what’s next, StockX wants to redefine the future of retail.
Imagine this: What if Nike sold shoes directly on StockX?
Rather than selling shoes for ~$150 at retail and watch them trade for $600+ just hours later, an efficient market like StockX could set the initial price.
For Gilbert and StockX, that's the future.
In the end, StockX has benefited from the same factors that have propelled sports trading cards and collectibles into a mainstream alternative asset class: emotional attachment & community.
Dan Gilbert identified a market that had a passionate community with a strong emotional attachment, created a more efficient process, and is now benefitting from the explosion in interest. He deserves a lot of credit for spotting that trend early.
Then again, that’s why he’s a world-class entrepreneur.
Have a great weekend, and we’ll talk Monday.
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