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The Unseen Side of the Sneaker Economy

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  • Sneakers are big business. Every year, the sneaker industry in the United States generates billions of dollars in revenue, $17.5 billion in 2016. This isn’t that surprising when you think about how many people you know who wear sneakers. Even if you aren’t much of a sneakerhead yourself, it isn’t difficult to see how such a large market could generate such a significant revenue stream.

    What’s more surprising is that the sneaker resale market – where people sell on the sneakers that they have purchased – brings in $1 billion all on its own. The supply side of this resale market that many casual sneaker wearers are entirely unaware of makes sneakers an alluring prospect for making some (relatively) easy money.

    Supply and Demand

    Sneakers have been constantly in-demand for about a century now. The first mass-produced shoes that most people would recognize as sneakers were made in 1917. These shoes, known as ‘keds’, consisted of rubber soled shoes with canvas tops. These were much more comfortable than the plimsolls that came previously, and since their introduction the sneaker has been associated with comfort as well as style.

    To the casual observer, the world of sneakers can be a little bewildering. While you might understand paying $50 for a pair of good shoes, or even $100 if you feel like treating yourself, you might be surprised to know that the most sought-after sneakers can easily fetch thousands of dollars from eager buyers.

    But why do sneakers have such a high resale value? To understand this, you need to understand that these sneakers are more than just shoes. Celebrities like Kanye West have launched their own sneaker lines in recent years. These often limited edition runs are prime targets for sneaker resellers. They will fetch huge premiums because they have limited supply and because of their celebrity association.

    A reseller dropping $1,000 on a pair of Solefly Art Basel Air Jordan 1’s, for example, could sell them for well over $4,000. It isn’t hard to see why this would be a tempting investment.

    Buying Online

    While shoes are one of the few products that many people would like to try on and hold in their hands before they buy, online sales are a vital aspect of the sneaker economy. While the general public might be fairly evenly split on whether they buy online or offline, sneaker resellers almost exclusively buy online.

    These resellers aren’t just looking to take advantage of the usual benefits of online shopping – the convenience, the simplicity and the range of options available – they are thinking of something else entirely.

    Bots, Bots, Bots

    Of course, having to track down suitable sneaker listings, buying the sneakers and then reselling them, is quite a lot of work for one person to do. Especially if the goal is to make a living, not just a little profit. Fortunately, technology offers an (almost) ideal solution.

    First of all, a quick primer on bots. You’ve no doubt heard the term ‘bot’ in the news over the last few years, you’ve probably even worked out, in a broad sense, what a bot is. You can think of a bot as a virtual internet user. Instead of a person sat at a computer, you have a software script or a series of scripts that direct what a computer does online.

    The music concert industry has been trying to combat bots for years now. If you ever wondered how those ticket resellers were able to snap up all the available tickets to major gigs so fast – this is how.

    Who is in Control?

    At the time of writing, machines are yet to become sentient and throw off the shackles of oppression that humanity built. That means that for every bot crawling the web and making purchases, there must be a human directing it.

    Not every sneakerhead is also a programming whizz, so there are now off-the-shelf solutions available for those who want to use bots to buy sneakers. These software packages are designed to make it possible for someone with little to no technical knowledge to utilize bots.

    Unfortunately, these software packages alone won’t get you very far. Sneaker manufacturers and sellers are in a constant game of cat and mouse with bots and resellers.

    Bot Banning Problems

    One of the simplest things that a retailer can do to combat bots on their platform is to ban their IP addresses. If you have a program that automates your activities across 12 websites at the same time, all 12 will see you connecting from the same IP address. Once a website has banned your IP, you will no longer be able to connect to that website from your home network.

    However, there are a number of ways that you can disguise your IP address, the most popular methods being VPNs and proxies. In this case, a proxy is preferred to a VPN for a couple of reasons.

    First of all, a VPN will connect to the internet via a VPN server. In most cases, you will be sharing the server with other users, meaning you all have the same IP address. This is good for anonymity but means that once the IP is banned, no one can use that service to connect anymore.

    Second, while VPNs are great for anonymity, they don’t do much else. A proxy server, on the other hand, can host scripts and can automatically cycle through IP addresses, making them harder to detect.

    How it Works

    By using specialized residential sneaker proxy servers, which will assign bots the IP address of a residential property, sneaker resellers can set their bots up to access particular websites at particular times, or they can tell their bots how to browse websites and search for suitable deals. The limitations here are mostly down to the capabilities of the programmer that makes the bot.

    Resellers are in competition with one another. Given that they generally have access to the same tools and software as one another, they have to find other ways of gaining an advantage over competitors.

    The result of this is that sneaker resellers are turning to increasingly powerful proxy servers that can process more requests than their rivals. Servers that are located physically close to the servers of companies like Adidas and Nike can fetch an additional premium because of the edge they give users.

    When a new sneaker is announced and expected to go on sale soon, the resellers begin preparing their bots. This involves getting the code ready so that as soon as the sale goes live the bot kicks into action. The bot makers often also scour the website’s servers, looking for any new product codes or other information that might be related to the sneaker in question. This data can be used to produce faster bots.

    When the big day arrives and the sale goes live, the floodgates will open. Any correctly configured bots will race through the checkout as soon as they can. For many of the most anticipated sneakers, these sales are designed to work like lotteries. Needless to say, if you can enter multiple times using bots then you have a much better chance at winning.

    Sneaker Resale

    Selling the sneakers is yet to be automated to the same degree. There may be a few isolated examples of a sneaker reseller setting up a system to automatically buy and sell sneakers, but generally this is done by hand to maximize profits. Doing it personally enables resellers to utilize social media, as well as dedicated platforms like GOAT and The Sneaker Don.

    Many people remain completely unaware of the world of sneaker reselling. However, competition is extremely fierce between resellers, they are constantly looking for ways to gain an edge on one another. As time goes on, expect the bots to become more sophisticated and the proxy servers used more powerful. The sneaker economy has changed a lot in the last couple of decades, it looks like sneaker bots are here to stay.

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