But this isn’t an analysis of adidas. That will come later. Because despite the rapid resell growth of the Brand with the Three Stripes, adidas is still a distant second to Nike. The majority of the resell dollars spent on any given day are still the latest Retro Jordan drop. But if the trends we’ve seen over the last 16 months continue, that may not be the case for long.Jordan Brand has had a rough time on the resell circuit lately. In 2015, for the first time in a very, very long time, we saw some Retro Jordans sit, with a few even landing on clearance. So far during 2016 they’ve appeared to pull back from the edge – a few big shoes will make it feel like that – but on the whole the Jordan resell game has continued the decline started in 2015, and may be headed for more clearance racks than we’ve seen since the mid 2000s.
The above chart shows the last four releases of the year for 2014 vs. 2015, and the amount of money resellers made on eBay in December of each year on those four shoes.Resell profits dropped 70%. And if you ask resellers, they’d say that Nike took 70% of their profits.These should be huge, instant sell-out shoes, which should also command big dollars on the secondary market. The Black Friday release, the Aqua 8, is still showing up at Nike outlets across the country, six months later. This was a monster OG shoe. The 2007 Aqua 8 release was reselling for $450 before this drop; this was a can’t-miss. Instead, Nike missed. Besides the inexplicable color change of the heel from black to grey, the Swoosh clearly released WAY too many pairs. When you combine that with rising retail prices, you’ll see that the money that resellers can make from general release Jordans is disappearing.
It’s not just the last four releases. Resell profit margin (which we calculate using eBay sales in the two months following the shoe’s release) has been declining for the last four years. Resell profit margins on General Release (GR) Jordans, which was almost 60% at the end of 2011, has fallen to less than 40% in four years.Average reselling costs are 18%: Transaction Fee 10%; Payment Processing 3%; Shipping 5%.*Yes, there are many places that you can sell for more or less than 18%. Consignment is usually 20% plus shipping if you’re mailing your kicks to the store. Facebook, Twitter and Instagram, for example, have no fees. But eBay still accounts for over 1/3 of the entire market, StockX is the fastest growing new market, and pretty much every other new sneaker market also charges a transaction fee around 10%.