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How to make big money in the sneaker business

For the love of sneakers, a billion-dollar secondary market has bloomed, where collectors buy and sell rare kicks for hundreds or even thousands. Economics correspondent Paul Solman profiles two so-called “sneakerheads”: one a major collector and brand ambassador who’s turned his obsession into a career, the other a seller who snaps up the latest products before the public even has a shot.

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  • Judy Woodruff:

    Now to the world of collectible sneakers, where buyers pay hundreds, sometimes thousands, of dollars for limited edition shoes.

    Tonight, our economics correspondent Paul Solman profiles two so-called sneakerheads, one a major collector, the other a seller.

    It's part of his series, Making Sense, which airs every Thursday.

  • Mark “Mayor” Farese:

    This is 3,000 pair of sneakers.

  • Paul Solman:

    Mark "Mayor" Farese has been collecting sneakers for so long, he needs more than this basement to house his hallowed 3,600-pair collection.

  • Mark “Mayor” Farese:

    The storage unit, the apartment, the house, it's probably a million dollars in sneakers.

  • Paul Solman:

    At New York's Sneaker Con, we covered the billion-dollar secondary market for sneakers, 20,000 sneakerheads buying and selling rare kicks for hundreds, even thousands, of dollars.

    We pointed out the drivers of this market–brand loyalty, alternative identity, aesthetics, and perhaps, above all, status.

    Mayor Farese is a vivid case in point.

  • Mark “Mayor” Farese:

    I'm the Imelda Marcos of the hood, because you know she had all the shoes, and I have all the sneakers.

  • Paul Solman:

    Mayor is an influencer. People want what he endorses, in part because they drool over his collection.

  • Mark “Mayor” Farese:

    There was episode on "Entourage" one day where Turtle wanted a pair of sneakers that were unobtainable, and they were online, and they couldn't get it. And then Vince made a phone call, and he got him a special shoe.

  • Actor:

    Five thousand.

  • Actor:

    For sneakers?

  • Actor:

    They're not just sneakers, E. They're wearable art.

  • Actor:

    I made you an even more limited edition, only one of one.

  • Mark “Mayor” Farese:

    This is also the "Entourage" shoe. But instead of Turtle's name on it, it has my name. It says Mayor. This is real crocodile.

  • Paul Solman:

    Crocodile?

  • Mark “Mayor” Farese:

    This is croc. This is a $2,000 Air Force 1. This was the price on it. This was the last time that Nike ever used the exotic materials on a shoe.

  • Paul Solman:

    Mayor's got 28 pairs.

  • Mark “Mayor” Farese:

    I have the only ones in existence. These are unobtainable. You can't get them.

  • Paul Solman:

    Obtaining the unobtainable hikes Mayor's status in sneaker culture. How does he get them? From friends and connections who sell him limited releases at retail. But Nike and other brands also give them to him for free.

  • Mark “Mayor” Farese:

    The fact that I'm popular because of sneakers, a lot of companies capitalize on that and they want to give me product, because they know I'm going to post it on social media or I'm going to wear it, and I'm going to be seen in it

  • Paul Solman:

    At 45, Mayor Farese may seem an unlikely market leader for teenage sneakerheads. But, he says.

  • Mark “Mayor” Farese:

    I became the O.G. I became the…

  • Paul Solman:

    What is O.G?

  • Mark “Mayor” Farese:

    Original gangster, or original gentleman, whatever they call it. It's a term of endearment for older people.

    I only have 151,000 followers on Instagram. But my 150,000, 151,000 followers are core. They follow me because I'm Mayor, and they love what I love. So, I have a cult following. And that cult following means a lot to a lot of brands.

  • Paul Solman:

    And it's not just sneaker brands that get exposure.

    This is a Louis Vuitton Supreme pillow.

  • Mark “Mayor” Farese:

    Yes.

  • Paul Solman:

    How much is this thing worth?

  • Mark “Mayor” Farese:

    They sold for $600. They're probably going for $2,500 a pop now. Louis Vuitton wasn't selling them to the general public.

    I wound up with every piece in the collection. So, I pride myself on that.

  • Paul Solman:

    Then there's his Rolex collection.

  • Mark “Mayor” Farese:

    I like these nice things because I couldn't afford them as a kid. I grew up very poor. I'm talking cereal with water, not milk, mayonnaise sandwiches, wishing I had ham and cheese on it. I know my moms did what she could do, single parent.

    And when I finally made something with my life, and did something with my life, like, these are my trophies.

  • Paul Solman:

    And you always wanted them because it would be a sign that you weren't poor?

  • Mark “Mayor” Farese:

    Right. It all started for sneakers with me. My mother brought me a cheap pair of sneakers called the Mark 5. It's a division of Spalding. It was a cheap, cheap sneaker.

    I thought I was cool because my name is Mark. I go back to the neighborhood, I got ridiculed, laughed off the block.

  • Paul Solman:

    Really?

  • Mark “Mayor” Farese:

    Like, laughed off to the block to the point where I was fighting. I was so angry and crying, that there was fists flying. That's how angry I was.

    And I vowed that would never happen again. And that's where it became for me with my sneakers.

  • Paul Solman:

    How does he afford it all?

  • Mark “Mayor” Farese:

    Let me show you the world's best sneaker-cleaning product on the planet.

  • Paul Solman:

    Farese is a well-paid brand ambassador at Sneaker con for a sneaker-cleaning product called Crep Protect.

  • Mark “Mayor” Farese:

    Keeping your sneakers clean is a must in the sneaker community, because you always want to look fresh. You always want to look good.

  • Paul Solman:

    He also hosts digital videos, runs his own marketing firm, all gigs that grew out of his love for sneakers.

  • Michael J. Fox:

    Power laces. All right.

  • Paul Solman:

    Mayor actually has the "Back to the Future" shoe, the Nike Air Mag.

  • Mark “Mayor” Farese:

    I think I paid $4,800 on the auction. It's probably selling for $15,000 right now.

  • Paul Solman:

    And even that's not his most prized pair.

  • Mark “Mayor” Farese:

    This is a Jordan IV Undefeated. This is one of the Holy Grails of sneakers, 72 pair in existence; $25,000, the shoe's going for. I have been offered $20,000 used off my feet. I can take this shoe, bend it and crack it in half like this, and somebody will still offer me $25,000 — $18,000 for this shoe.

  • Paul Solman:

    Which may explain why he was willing to let me try them on.

    Can I just do it the way I do with normal sneakers?

  • Mark “Mayor” Farese:

    Yes. You can slip in there. Go ahead. Don't be afraid.

  • Paul Solman:

    Well, it's $25,000 sneakers.

  • Mark “Mayor” Farese:

    Stand up and let me see. There you go. It matches the clothes.

  • Paul Solman:

    I tell you, I swear I would wear those.

    But I wouldn't buy them. These Undefeateds were going for $55,000 at New York consignment shop Stadium Goods.

    And that leads up to the second star of our story, sneaker reseller Yuanrun "Z" Zheng, AKA 23Penny.

    Those not lucky enough to be Mayor rely on the likes of Z, who got the reselling bug from his mom.

  • Yuanrun “Z” Zheng:

    She used to flip iPads.

  • Paul Solman:

    She used to flip iPads?

  • Yuanrun “Z” Zheng:

    Yes, sir, because there was a shortage of iPads being sent to China when it first released here in the U.S., so what we would do, we would go to Circuit City. We would go there in the morning and then wait on the iPad. And then she would send all those to China.

  • Paul Solman:

    Z has been reselling since he was 18 online, and now also from an showroom outside Nashville, which doubles as his warehouse. He sells almost $2 million worth a year.

    And where did these come from, for example?

  • Yuanrun “Z” Zheng:

    I can't quite tell you that exactly, Paul.

  • Paul Solman:

    Because that's your trade secret?

  • Yuanrun “Z” Zheng:

    That's my trade secret. Yes.

  • Paul Solman:

    Resellers like Z are notorious for snapping up the latest sneakers as soon as they get to stores, before the public has a shot, as Z acknowledged in a documentary.

  • Yuanrun “Z” Zheng:

    For the people who think I'm a villain, I just want to let them know that I'm trying to be the best villain there is.

  • Paul Solman:

    Why are you the bad guy?

  • Yuanrun “Z” Zheng:

    I'm the bad guy because, while everyone else is wanting a chance to buy a pair of sneakers for retail price, I'm sitting here with a good amount of sneakers that I have gotten that other people might not really even have access to.

  • Paul Solman:

    The sneaker market has created a technical competition of its own, featuring bots, for example, computer programs that complete an online purchase in the blink of an eye.

  • Yuanrun “Z” Zheng:

    When Joe Schmoke is on his phone on Adidas.com at 10.00, he's typing in all his credit card information digit by digit and his billing address, and the guy with the bot, he is buying 10 pairs at a time in a matter of nanoseconds. And when Joe Schmoke gets done, the shoe has already sold out.

  • Paul Solman:

    Right. And this happens with Broadway shows, for example. They're all these then counter-algorithms to try to, are you a human, as opposed to a bot?

  • Yuanrun “Z” Zheng:

    Right. That's why we have resellers like me who have access to a lot of the goods that people have trouble accessing and whatnot.

    So, that way, they'd rather just now pay the extra, and then it's hassle-free.

  • Paul Solman:

    But you're like the person who is reselling "Hamilton" tickets, but you got the "Hamilton" tickets because you knew somebody who knew somebody who'd gotten tickets, as opposed to having a bot that bought up all the "Hamilton" tickets on Broadway for the next six months.

  • Yuanrun “Z” Zheng:

    Right. Right. So, yes, in a sense, I'm still a ticket scalper, but I'm doing it — my approach to that is different.

  • Paul Solman:

    A ticket scalper with a shoe for even the unlikeliest of customers.

  • Yuanrun “Z” Zheng:

    Look at that. That's a carpe diem look right there.

  • Paul Solman:

    And I actually bought two pair for a few hundred dollars.

    For the "PBS NewsHour," this is economics correspondent Paul Solman reporting from Nashville and New York.

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