The wild world of sneaker buying bots (2017)

> but you'd need a unique credit card per entry

What could go wrong?..

Aside from the obvious stolen CC#, there are legitimate services that provide you with a disposable per transaction card number..

What’s the draw for being so into sneakers? Do you resell them to make money? Wear them? Collect them like stamps?

It's great that you're looking into legislation. Touts are annoying. I've lived in Hong Kong for a while, and once lost my iPhone. Getting a new one from Apple was basically impossible, because everything for open sale was snapped up immediately by very long queues of people paid to stand in very long queues and pick up 2 iPhones, which were then slipped over the border to go on the Chinese gray market.

I ended up paying some inflated price at a dodgy computer centre (as the alternative would have been to take out another 2 year phone service subscription).

However, I believe you that regulating this appropriately is complex. I'm not sure, for example, what Apple could have done better (beyond their 2-per-customer-limit, apart from raising prices or magically producing more). Lotteries might be one way (and that's what Apple did later in HK, I believe).

(And, BTW, cool to have a MEP here :-)

I agree with the parallels. I disagree with the solution.

It seems to me both markets have a producer retailing a product far below the market clearing price. A 3rd party is thus stepping in and claiming that unclaimed value.

It seems to me that the producers hold all the cards needed to put the 3rd parties out of business. They can increase prices, or supply. Why don't they?

I've heard accusations that musicians are getting kick backs from touts, which suggests that the touts are basically scapegoats. The question then becomes why people don't think it's reasonable for these producers to raise prices. That view is kind of understandable for musicians, they are 'artists' not in it for the money, although why their fans would begrudge them more money or why the artists wouldn't want to perform more for their loyal fans I don't know.

In short it's a strange market dynamic, where nobody actually seems to be honest about their motivations.

Are you going to ban drugs, alcohol and selling sex too? If people sell items at below the market clearing price someone will buy it and sell it at its true value.

My nephew (12) did about the closest thing I've ever seen to the "paperclip to yacht" economic path. Some relative gave him $100 as a holiday gift a few years ago. He used it on some silly collectible monkey T-Shirts, and sold some of them to a classmate at a profit. The idea stuck, and he leveraged that to buy some shoes (not limited release, just relatively rare/desirable), and learned how to eBay them. Nowadays he has just under $10k US, and spends a lot of time chasing weird hypebeast-esque fashion drops for immediate resale.

I'd be judgemental and go all "kids these days" on him if only it wasn't so lucrative for him. Sure, it's not that much money relative to an adult's earnings over a couple of years, but he's 12. My sister (his mom) worries he won't learn to appreciate savings and frugality as he never had an allowance before doing this. Me, I think he'll do just fine.

Who wants to buy a fake?

Buy three pairs so you can wear one, put one on a shelf, and loan one out to friends?

A lot of people will wear them if they're buying the bots. You may be looking at 600-1000$ resale, so buy the bot for 200 and shoes for 200 and you're still under if you bought them resale.

If you also get a legit pair, then you could sell to make money.

It's a collector's market, so the answer is, err, yes.

Some buy them to wear; some buy them to put them on a shelf; some buy them to seal them and resell them down the line.

The dynamics that make sneakers valuable collectibles are not governable. A lot of the "value" is probably generated by dealers, scarcity, sell-outs and such.

If they tried to capture all the value by auctioning, they might sink the whole thing.

Buyers don't just want the rarest sneaker, they want to win at a game of being in the know. Taking the arbitrage in-house would ruin that.

If you raise prices until only the amount of people left wiling to buy matches the limited supply of the shoes then sure you've married supply and demand in a textbook sense, but you've removed the fever-pitch generated by everyone clamouring for the shoes at a price point just attainable to a larger audience that will rarely buy them. The pandemonium caused is a driver of the demand.

Or even better, why not auction them? This way you get a perfect price for each pair.

And why aren't these damn cows perfectly spherical?

A few reasons. People don’t like paying $600 for a pair of shoes because nice ones are usually $100-200. Feels better to get ripped off by someone on the internet than by Nike.

More importantly, the fast sellout times create hype, which just further drive the market. These companies will make more money in the long-term because people will keep coming back to get one of these shoes that “no one else has.” Trick is that the companies do eventually flood the market