The Kicks You Wear, Vol. 290 — Taking Stock with StockX 📈
Chopping it up with StockX's Drew Haines
Gooooood morning, family. Welcome back to the Kicks You Wear. It’s Sykes, back again. Thank you so much for rocking with me today. I appreciate y’all. Hope you’ve had a fantastic weekend.
I definitely missed you, folks! Our jaunt out to Orlando was nice. Harry Potter World was surprisingly cool — though, I’m not the HP nerd in the family. Would definitely recommend it for anyone curious about going.
Let’s jump in.
Verification is the root of all sneakers
StockX has a lot going on with it right now, chief of which is the pending litigation between the company itself and Nike over StockX’s vault NFT program.
In the process of that, StockX has had its name dragged through the mud quite a bit in court and through the press when it comes to its verification process — the company’s biggest value proposition.
With that in mind: I was invited by StockX to chat with Drew Haines, the director of sneakers and collectibles. Among our topics were two things:
The marketplace’s recent updates to its seller fees, which simultaneously decreased the company’s cut from level 1 sellers from 10% to 9% while also making it a bit harder to climb up the seller ladder on the platform to level 5.
The company’s latest “big facts” report that combs through a number of statistics related to the company’s authentication process.
I had questions about the motivating factors for the company’s new selling standards and whether any of this was done to win some public trust. Drew gave me some answers in the following conversation.
Hope you enjoy it.
The following conversation has been lightly edited for brevity
Mike Sykes: Let’s discuss the new seller fees coming July 1. The dip down to 9% for level 1 sellers from 10% — where it’s been for a while — was super interesting to me. What were the motivating factors there?
Drew Haines: The motivating factor was to continue to be as competitive as possible for our sellers when it relates to fees. Get those fees as low as possible. A lot of the supply that we’re trying to get is obviously highly competitive and there are other platforms that are looking for that supply. So it’s a benefit for our sellers and a benefit to us to do this.
Not a lot of our volume comes from Level 1 sellers. We have a huge portion of level 4 and 5 sellers and with the market that exists today, we see a lot more velocity that comes from our higher-level sellers. I think a lot of the benefit will be to those level 4 and 5 sellers that can now get their fees as low as 5%.
MS: I’m glad you mentioned that. As I read through the new requirements, it seemed like the requirements were a bit more challenging for level 2 and 3 sellers while having better benefits higher up. I was curious about that decision.
DH: That’s a good question. What we really want to get to is having the best possible service for those level 4s and 5s. So making it a little bit harder to reach that level will encourage sellers to sell more and potentially bring their prices lower and meet more buyers. It allows us to have best-in-class pricing for customers and get them into an even better position.
If we have thousands of level 5 sellers, we can’t really provide excellent service to that many folks with the team that we have. So we wanted to consolidate that group and make it a bit more manageable.
MS: In a broader sense, did the overarching climate of our economy influence this decision at all? Talking about things like inflation and general consumer choice.
DH: I would say, generally, no company or marketplace is immune from the impacts of really high-interest rates or inflation or a challenging economy. Frankly, from my perspective on the seller program, I don’t think that was much of a consideration. We’re just trying to provide the best possible service at the lowest possible fees. I think this is something we would’ve done if the economy was good or bad.
MS: Did you find yourself in a place where it seemed like you all were losing sellers going to other platforms at any point?
DH: It wasn’t us getting specific feedback from sellers saying that “you guys aren’t meeting my expectations” or anything like that. It was just like, hey, our sellers are really valuable to us. How can we make this better for them?
MS: Changing gears, I wanted to talk about the latest Big Facts report. I’m big on transparency here. The verification info in this one was striking to me. Obviously, without getting into the Nike lawsuit, I was curious about the public perception you all have taken on in the last year or so. While these numbers are great, it felt like a response to everything going on in terms of public perception. Am I off there?
DH: Maybe a little bit off? I have been at this company for more than 5 years. There are other folks that have been here longer. The very first product that was sold on StockX was verified. That was our key differentiator against other marketplaces. Part of our position as a business, when this company was founded, was because of our dedication to verification.
For what it’s worth, this is a verification-themed report. We do different themes throughout the year and this one was themed on that. What’s most compelling to me is the volume that we’ve achieved over the last few years. We are physically verifying over a million products on average and it’s everything from your plain white Air Force 1s to Paris Dunks. We don’t skip that process for anything. Our process is the same for every single product. And there are so many issues that we check for — quality control, seller mistakes, wrong products, wrong size, etcetera. We just prevent buyers from getting something that doesn’t meet their expectations.
Verification has always been the top single priority of the business since the founding of the company.
MS: How interested do you think buyers are in this information in terms of the report? Do you think buyers are actually clamoring for this stuff? Do they care about it?
DH: All buyers want is to get the product that they ordered, quickly and for a fair price. And they want it to be exactly what they ordered — the right size, the genuine product, the right color. I think, ultimately, we deliver on that promise. And that’s all they really care about.
I always see these for people like yourself who pay attention to the industry and understand the competitive landscape of the sneaker market. It’s some of both. But for the casual customer, how much do you need to know these numbers? Probably not. But if you care to dive deeper we want to make sure we have them available for the people.
MS: I wanted to ask about the change from the 100% authentic guarantee to “StockX Verified.” From reading, it doesn’t seem like your standard has changed. But I wanted to get into why this language has switched.
DH: The process itself, of when the sneaker gets to the authenticator, has not changed. We’re still checking the size, the right style code, whether it smells funny. All of these things. From my perspective, calling it authentication is kind of a disservice to the process because it’s so much more than that. It’s a multi-point inspection. From my perspective, I think that verification is a more accurate way to define what we’re doing.
If you look at the report, the number one reason things fail verification isn’t that a product is fake. It’s because of some sort of quality control issue with that product. By calling it, specifically, authentication I think we take away from the fact that we’re preventing customers from getting what they don’t want which are things that have defects. So I think, just the wording of that, lends credence to our process.
MS: You all have added 3 more authentication centers [In Berlin, Tokyo and Mexico City] in the last year. Are there any more coming?
DH: Just to step back on our verification centers, one of the reasons we open them is to better service those local markets. If you’re having to do imports and exports, you start to accrue all these costs because of duties and shipping. We put these things geographically in strategic places to minimize those costs.
On our roadmap, that’s the biggest thing. You’ll hear about that relatively soon later and you’ll be able to share that with your readers.
Roshe Run sneakers are back
I think we’ve officially run out of ideas. It’s 2023 and, somehow, someway, Nike is bringing back the Roshe Run sneakers.
What’s happening: The hottest shoe of the mid-2010s is set for a return this fall, according to Sole Retriever.
I’m not here to deny the run that Nike’s Roshe sneakers had in the past. Not at all. This shoe was it. For a long time.
The Dylan Raasch creation was hot from around 2012 when they first dropped until around 2017 when the Roshe 2 became a thing.
They were fly and, best of all, cheap. They retailed at only $70, but some of the colorways were incredible. And customizations were amazing, too — particularly the Yeezy-inspired joints.
But as Adidas’ Yeezy and Ultra Boost products took hold of the sneaker world, the Roshe died. And it happened quickly. By 2019, no one was wearing them.
Good reading: The rise and fall of the Nike Roshe Run.
Bringing this sneaker back doesn’t make sense to me. It’s not in style anymore. It just literally fell out of favor only 5 or 6 years ago. Is anyone really nostalgic for that time at this point? Have we even had the time to do so?
Between the lines: With new colorways reportedly emerging of the Roshe One, this feels like Nike trying to turn the Roshe into a staple again as opposed to a full-on retro. They’re just giving it another go. But why not just give us something new? We’re seeing Nike’s big innovation problem play out in real-time.
We’ll see how this works. Regardless, though, for all 12 of you Roshe fanatics that are out there — I hope this makes you happy, at the very least.
The Drakes are alright????
I know I’ve been roasting Drake’s Nocta Hot Step Air Terra for, well, the entire time they’ve ever existed.
But…I’m here to tell you that these Zoom Flight 95 joints? Yeah, man. They’re iight with me.
This is reportedly called the Nike x NOCTA Glide. I feel like this is what Nike Basketball shoes should look like. Take this from Drake and make it Giannis’ signature shoe or something. I’m begging.
What’s droppin, bruh?
Fragment x CLOT x Nike Dunk Low — Wednesday, June 14
New Balance 9060 “December Sky” — Thursday, June 15
Nike Dunk Low “Trout” — Friday, June 16
New Balance 990v6 “Meganta Pop” — Friday, June 16
New Balance x DTLR 9060 “Glow” — Friday, June 16
That’s a wrap, folks! Thanks so much for rocking with me today. I appreciate y’all. You’re the best. Tell your friends about the Kicks You Wear.
Hope you have a fantastic week ahead of you. Let’s chat again on Friday. Til then, peace and love. Be easy, be safe, be kind. And we out.
-Sykes💯
I always look forward to your newsletter. But…
The piece on StockX could’ve been an authorised media release for all the positive spin it contained. I really thought you’d ask the big questions and not give them easy outs. Disappointing when you are so straight with just about everything else.
Clearly they wouldn’t be giving away percentage except that they’re being squeezed by other platforms and a general reduction in overall volumes. They need to keep volumes up to cater for their ongoing expansion.
It also would’ve been great to ask them about their changes to the bid/ask/sale system is causing problems to international sellers and buyers. It used to be better and now no one has any clue how much something is actually worth as sales prices are all over the show. What a mess. No wonder people are leaving the platform in droves.
Can’t wait for the next edition! 🙏🏻🙏🏻