Subscribe to Here’s the Deal, our politics
newsletter for analysis you won’t find anywhere else.
Thank you. Please check your inbox to confirm.
Watch Part 2
How to make big money in the sneaker business
At "Sneakerhead" conventions around the country, anyone can buy, sell or trade a pair, and much-hyped limited releases demand premium prices. Economics correspondent Paul Solman reports on what drives this specialty sneaker culture.
Now to a surprising way to make money- the sneaker resale market, where used Nikes and Adidas can sell for hundreds, sometimes thousands of dollars.
Our economics correspondent, Paul Solman, has the story. It's part of our series Making Sense, which airs every Thursday.
In the back of New York's Javits Convention Center, buyers and sellers, teenage boys mostly, haggled in the trading pit. Here's one of the hottest markets in America I knew almost nothing about, sneakers.
This weekend, we're going to have 20,000 people.
When Yu-Ming Wu founded Sneaker Con nine years ago, just 800 people showed up. This year, eight conventions of so-called sneakerheads are planned around the country. New York's is the biggest.
We created this space for anyone to come in to buy a pair of sneakers, to sell a pair of sneakers, or trade a pair of sneakers.
So, in a sense, this is a physical eBay?
It is a physical eBay, yes, correct, for sneakers.
Much-hyped limited releases of Nike Air Jordans, as in Michael, and Adidas Yeezys, the brand of Kanye West, have spurred a billion-dollar resale market. When they appear, they bring chaos, sometimes even violence, to the few stores that have them, and then bring premium prices on the secondary market, like here.
Sneaker-monger Matt Bogy.
So these are the Red Octobers.
They're worth about five to $6,000 on average per pair.
That's what you're selling him for or…
Yes. That's what I'm selling them for. And I also have a pair signed by Kim Kardashian, which is Kanye West's wife. Those are — I price those at about $7,000, $8,000.
Wait a minute, thousands of dollars for a pair of sneakers?
As a mom here put it-
It is insane. And we're having a ton of fun, but it's incredible to see how much sneakers cost.
But there were some bargains. Sneakerhead Tyre Coles was hocking used kicks from his own ever-burgeoning collection.
I love Nikes to the bottom of my heart. I buy any pair.
Nickson Descas was selling a pair of Nike Air Max trophies he'd bought for $300.
I have been wearing them a lot. They're a little beat. So, I will try to sell them around $150, maybe $200.
For used sneakers? What's going on here?
Well, one thing, says, Nickson Descas-
We just love the hustle. We just love the game.
Ah, the hustle and bustle of the marketplace.
I like buying the shoes, selling the shoes, trading the shoes.
It's a great way for young kids to learn about business and how to make money and sometimes lose money, and based upon the decisions that they make. Why not learn early?
And not just sneakers. Brandon Shore dealt in leather.
I bought this. And then I was able to sell it for more, and then buy a second one.
But sneakerhead culture drives the market. And it is, above all, about identity, by proxy, for example, through the Michael Jordans and Kanye Wests.
Wow. Smells like a brand-new pair of denim.
Or a new breed of celebs, like Kice Omar, who vlog, video blog, that is, about sneakers on YouTube.
Mainly, though, the identity comes through peer-to-peer connection and competition.
There's a term, it's called a hypebeast, where someone just gets an item just to like brag about everyone that they have the newest, coolest item, even if they don't like it.
Again, convention founder Yu-Ming Wu-
I always say they want to look fresher than the next. They want to look cooler than their peers, their friends, their classmates, and also have some level of status. I have something cooler. I have this rarer pair. I have something that you weren't — not that you couldn't afford, but that you couldn't get.
Cool began in the 1950s as rebel cool.
Steven Quartz has studied cool as a Caltech neuro-economist. His theory-
What happened in the 1950s was that, as we began to increase our standard of living, in a hierarchical society, it really created what we can think of as a status dilemma. There just wasn't enough status to go around. And what people began to do, especially kids began to do, was create alternative status systems.
At his Nashville showroom, sneaker reseller Yuanrun "Z" Zheng also drew a connection to the increased inequality of recent decades.
Sure, the sneaker market is status-driven, he says, but it's affordable status.
Yuanrun “Z” Zheng:
The retail of any sneakers, I will say, have never eclipsed over $350, until that Nike came with the crazy self-lacing shoe that cost $800.
But that's an outlier in itself. So people with no money or some people with no financial means can also get the limited edition sneaker, just like a person with a lot of money.
Back at Sneaker Con, it was clear that sneaker culture has taken on a commercial life of its own, with prize pairs so sought-after, counterfeits now abound, hence the long lines at the convention's legit check table, where Bryan Mora, among others, ferreted out fakes.
It'll be the glue smell. It will be the way the shoe is shaped.
How many fakes have you guys caught today? How many fakes?
We caught about like 30 pairs.
There's even a lone ranger of kicks, who calls himself Yeezy Busta, and he's built a brand around busting knock-offs.
The reason why I wear my mask is because what I do is, I call out celebrities who wear fake Yeezys. And some of them wanted to come after me and sue me, so I decided I wouldn't reveal my face.
Now, fans or family members of the Busta fam can get their own branded masks for only $20.
I would imagine this is also fairly healthy, right?
Yes, I mean, if anybody's sick and somebody tries to cough on you, you don't get it in your mouth. You know?
OK, so sneakers are fun and instructive to trade, a mark of status, comfortable of course, and finally, argues, Yu-Ming Wu, works of art.
I believe that sneakers are mass-produced sculptures. We have incredible artists, incredible designers who design and create these incredible shoes
Most famously, Tinker Hatfield, the Nike designer behind the most iconic Air Jordans.
It's not just scribbling on a piece of paper and coming up with a design. It's a lot of effort that goes into trying to be meaningful.
A legend in the sneaker world, he got mainstream attention via a Netflix documentary.
He saw architecture as inspiration for sneakers, and I believe he is a Leonardo da Vinci of the sneaker world.
So when you say Tinker Hatfield is the Leonardo of sneakers, are you equating the achievements of Leonardo, say?
Centuries from today, we will look back at Tinker Hatfield and consider him to be one of the most incredible artists.
And centuries from now, maybe a pair of Air Jordans will sell for $450 million, as da Vinci's Salvator Mundi recently did. Who knows?
As concert promoter Darryll Brooks put it-
Value is in the eye of the beholder. Some people collect things. I'm a collector, but not of sneakers. When you were a kid, when they were collecting G.I. Joes, you had a set of G.I. Joes. Don't tell me you didn't.
I didn't. I never had a G.I. Joe in my life. But I did collect a variety of things, minerals, baseball cards.
Same thing, different generation.
I got old cars. But these kids wouldn't look at my cars. They would say, ah. What would they do with a 1976 Eldorado convertible? They probably wouldn't know what the heck that was. It would look like a big boat to them. But it isn't a big boat to me. I love it.
As the 20,000 people in New York for the convention, and millions more around the country, love their sneakers, so long as they're the real thing.
For the PBS NewsHour, this is economics correspondent Paul Solman, the real Paul Solman.
Watch the Full Episode
Paul Solman has been a business, economics and occasional art correspondent for the PBS NewsHour since 1985.
Support Provided By: