Are Sneakers the New Stock Market? We Compared the Best Performing Sneakers Against Popular Stocks

Investing in Sneakers: A Multi-billion Dollar Industry

Over the last few years, sneaker collecting and reselling has become a 10 billion dollar per year industry. At auctions, sneakers have fetched even $1.47 million (a pair of game-worn – by His Airness - Jordan 1s), while on online reseller websites, like StockX or GOAT, some pairs that retailed at $200 are now sold for tens of thousands (keep reading and we’ll show you a pair of sneakers that’s now worth 1.000x more than its original price). And experts believe that the market will continue to grow in the future.

With these kinds of figures, it’s no wonder some people made millions of dollars just by buying and reselling sneakers. Some of them, like Benjamin Kapelushnik, or Ben Kickz, did it while still in high school.

Millionaire at the Age of 16

Benjamin Kapelushnik, or Ben Kickz, was probably one of the first American teens to make their fortune in sneakers. 

He started out by selling his first pair of sneakers to a classmate and slowly developed a passion for trading footwear. Soon after, he started queuing in line at sneaker stores to buy rare pairs at retail price, only to sell them online to the highest bidder. Just by doing this, Ben made a million dollars by the time he was 16. Now, he owns his own business and is the go-to guy for celebrities that want to track down a rare pair of sneakers. Stars like DJ Khaled, Drake, Future, or Lil’ Wayne buy sneakers from him.

Like Ben Kickz, there are countless others who’ve made their fortune by trading in sneakers.

Pay $60, Resell for $62,000

A pair of sneakers usually retails anywhere from $50 to $500, depending on the brand, collaboration, etc. While some pairs never go up in value, some end up growing in value and reaching unbelievable prices. 

Let’s take Nike SB Dunk Low Paris as an example. This sneaker came out in 2002 for a retail price of $60. Only a few pairs are available today, and the selling prices are insane. On StockX, for example, a seller is asking $157,700 for a size 9 pair. In total, 15 pairs of Nike SB Dunk Low Paris were sold on StockX, with prices ranging from $9,015 to $62,000. That’s more than 1.000x the original price, or, to put it in percentages, a 41567% increase.

If you bought a pair in 2002, those $60 would have brought you a profit of $61,400.

'Paris' vs Netflix

But how does it compare to the stock market? Let’s see how the Dunks did by comparing them to a famous company that went public the same year, 2002: Netflix.

On May 24, 2002, Netflix's share price was $1.21. For the next two decades, the share price grew steadily, reaching a peak of $678.8 in late 2021 before tumbling to $223.56. 

Like sneaker prices, shares surged during the pandemic, when people stayed at home and started to take an interest in the stock market.

If, instead of sneakers, you would have spent $60 buying Netflix shares, that investment would now be worth $11,086, which is significantly less than a pair of ‘Paris’ Dunks. Even at its peak, your Netflix investment was worth ‘only’ $33,662.

Yes, the ‘Paris’ Dunks were the best choice, but in the sneaker world, you don’t get too many opportunities to score a huge payday. Below is an image from StockX of the sneakers with the highest price increase and at least one confirmed sale. 

As you can see, only 3 sneakers went up in price by more than 40,000%, 2 of them being the original Jordan 1 release from 1985.

If we compare the 1985 Jordan 1s against a popular company that went public right around that time, Microsoft, the sneakers are the clear losers. Microsoft's share price has increased by 261,370% since 1986. So, if you took your Jordan 1 OG ‘Chicago’ money and invested it in Microsoft now, that investment would be worth $169,890,500. That’s almost 6,800 pairs of ‘Chicago’s.

How Much Profit Can You Make From a Pair of Sneakers

In the picture above, you saw what would be the best-case scenario. But don’t expect to become rich just by selling a few pairs of sneakers. Check out the table below to see how the prices evolved for some sneakers in the last 3 years.

*Information taken from stockx.com

What Influences Sneaker Prices  

As you can see from the tables above, there’s also a good chance that you might never make a profit from certain pairs of sneakers. On the other hand, you can just as easily turn $100 into $500 or $600 in just a few weeks. 

You might be asking yourself what influences sneaker prices. Two major factors can drive the price up by 6 or 7 times in just a few days:

• Hype
• Scarcity 

Hype

Hype can really make or break sneaker prices. If it’s a sneaker that everyone’s been talking about for months before its release, or if that shoe is starting to trend on social media right after its release, you can be sure that the price will go up.

Let’s take a popular example from 2020: the Nike SB Dunk Low Ben & Jerry’s Chunky Dunky. The sneaker blew up on social media right around its release. The results? Retailed at $100, the ‘Chunky Dunks’ were immediately resold for up to $1,700. 

That’s a 1,600% profit in a matter of days. Only meme stocks, like Gamestop, can bring you that kind of quick result on the stock market. 

On the other hand, if there isn’t enough hype surrounding the sneaker, the price could easily stagnate or even go down, as you can see from the table above. 

Scarcity

The second factor is a simple one: everyone wants what they can’t have. And it applies to sneakers as well as everything else. 

The Adidas Yeezy collection is the best example of this. Kanye West’s first sneaker made in collaboration with Adidas, the Yeezy Boost 750 ‘Light Brown’, dropped in December 2013. Only 9,000 pairs were made, and they were sold out in 10 minutes. Retailed at $350, they can be bought today for around $2,000 online.

But Kanye wanted everyone to wear his sneakers, so the production quantity of the following models increased significantly. As you would expect, in just a few years, the resale value of Yeezys dropped considerably. Today, you can even find some being resold for half their retail price. 

What Drives Share Prices

While sneaker prices depend on hype and scarcity, share prices are influenced by many more factors. But, unlike sneakers, some of them are predictable, like the company’s earnings and profitability. To put it simply, if the company is profitable, the prices go up. If it’s not, the share price goes down.

You can easily see in which direction a company is heading just by looking at their quarterly earnings reports (yes, the company tells you each quarter how they are doing). 

Besides these, there are other factors that influence share prices that are hard to understand by inexperienced investors.

Still, shares are more predictable in terms of price evolution compared to sneakers.

How to Buy Shares Even as a Beginner

You probably don’t know how to read quarterly earnings reports properly. So you might ask yourself, which should you consider the stock market?

Well, there are a few ways to invest, even in you don’t have the knowledge or time to dedicate to learning about investing. Some brokerages offer unique features that help you make investments (even profitable ones) with zero knowledge.

eToro, for example, has a popular feature called CopyTrading. This allows you to look at popular and successful traders on the platform and copy their investments automatically. It’s like having Ben Kicks buy you the same pairs that he buys each time he goes into a sneaker store. Not only that, but you also sell them at the same price he does. So, if he makes a profit, you make a profit. 

Another platform that has a popular feature is Trading 212. The Auto Invest feature automatically invests your money in diverse portfolios that have the best chance of turning a profit.

But remember, just like with sneakers, there’s no guaranteed profit in the stock market either.

How to Buy Sneakers vs Shares

So far, we’ve covered price evolution and how to make a profit with sneakers or shares. But, in order to make a profit, you first need to buy the pair or share. Let’s take a look at how easy this is for each.

Buying Sneakers

If a pair of sneakers is enjoying a lot of hype before release, you can be certain that acquiring it, especially at retail price, will be hard. 

People will line up in front of sneaker stores days before the release just to make sure they get a pair, and even that won’t guarantee that you’ll get a pair. Moreover, if you make it inside the store, you can’t just buy all the sneakers that you can afford. You’ll be limited to one or two pairs. The same applies to shopping online. When a ‘hot’ sneaker is released, websites will crash, and if you’re lucky, you’ll be able to buy a single pair. Plus, you’ll have to wait a few days for them to be delivered.

So, no matter how much money you may have, you’ll still have a limit to how many sneaker pairs you can buy. At the end of the day, if you have $2,000 in your pocket, you can’t ‘invest’ more than $500 unless you buy other pairs that are not as hyped. 

Buying Shares

Compared to sneakers, buying shares is like a walk in the park. If you already have an account set up with a brokerage, all you have to do is take out your phone, tap the screen a few times, and you’re done. 

If you don’t have an account yet, opening one doesn’t take much time. You can even do it while you wait in line to buy sneakers. Opening the account takes minutes, but you’ll also have to complete a KYC (know your customer) process, which may take a couple of days.

But once your account is set up, all your purchases will be instant.

How to Sell Sneakers vs Shares

Once you have your sneakers or shares and you’re ready to make a profit, it’s time to sell them.

Selling Sneakers

To sell the sneakers, you first need to post an ad online, either on a reseller website, like GOAT or StockX, or eBay. Either way, you’ll spend at least half an hour setting up the ad each time you will want to sell a pair.

Once you have your offer, which can come after an hour or a week, you need to package the pair and contact a shipping company. Thus, you will wait another day for your pair just to leave your home. Then, depending on the website, another week to get your money.

The big disadvantage of sneakers is that you can’t cash out whenever you want – even if you’re ready to sell at a loss. 

Selling Shares

Shares, on the other hand, can be unloaded in seconds. Again, all you have to do is take out your phone, tap the screen a few times, and you’re done. In less than a minute, your will sell your share and have your money in your brokerage account. To withdraw it to your bank account, you may have to wait a few days, depending on the brokerage. 

The Verdict

So, sneakers or stocks? What is the best way to invest your money? 

Let’s recap!

Sneakers

If you want to start investing in sneakers, you will need at least a few hundred dollars, or a thousand, and enough free time to stand in line in front of a sneaker store for a few days. If you’re lucky, you can buy one or two pairs of hyped sneakers, which you could sell in about a week and double or triple your money. 

The downside is that you probably won’t have time for a job. Sneaker trading will have to become your unique source of income. This means that, at some point, you will need to develop relationships with store managers and wholesale suppliers to buy sneakers in bulk. Only then will you be able to make a profit that can allow you to make a living from reselling sneakers. 

Pros

✅ you can double or triple your money overnight
✅ new sneakers are released constantly
✅ all you need to start is a few hundred dollars

Cons

❌ needs to be a full-time job to make a decent profit
❌ you can take losses on some sneakers
❌ can't buy too many pairs at once

Shares

If you want to take a passive approach, the stock market is the way to go. You can invest your money (unlike hyped sneakers, you're not limited to only a few shares) now and then forget about it for the next 30 years. The stock market could be a good way to set some money aside to retire early. But how much money would that bring you? 

Let’s say you take that thousand dollars and invest it in today's most popular index fund, the S&P500. On average, the S&P500 had a yearly return of slightly over 11%. This means that, in 30 years, your $1,000 will become almost $23,000. That’s not a lot of money. But what if, besides that $1,000, you start adding an extra $100 each month instead of spending it on sneakers? 

Now your total in 30 years will be close to $262,000.

Pros

✅ you can invest as much as you want when you want - even $1
✅ you don't need to quit your job to do it
✅ can have great returns in 2-3 decades

Cons

❌ you can't make a big profit overnight
❌ need to spend a lot of time learning to become a professional investor/trader
❌ can still end up losing money

Next Steps

If you’ve decided you want to try sneaker trading, we recommend doing a quick Google search. You can easily find a lot of guides on how to start a career in this industry, like this one that tells you how to camp out in front of a sneaker store.

On the other hand, if you want to start investing in the stock market, we have all the necessary resources.

First of all, you will need to open a brokerage account. We’ve created this free tool to help you identify the best investment brokerage for you. Just answer a few simple questions, and our algorithm will do its magic.

Secondly, you should go to our investing education section and read some beginner guides to understand better how the stock market works and how to invest. 

Or, you could go for both! Become a full-time sneaker trader and invest some of your profits in the stock market.

Whichever path you choose, we wish you the best of luck!