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Positive Analysis: The sneaker resale market, especially through "brick flipping," highlights a growing consumer behavior where resellers like Santiago Mejia, as seen in the article, profit from easily available sneakers. By focusing on high volumes of common models, these resellers maintain consistent profits despite small margins. This approach makes affordable sneakers accessible to everyday consumers, like us, as many popular models, such as Air Force 1s, see significant sales which indicates stable demand.

Normative Analysis: The sneaker resale market raises different fairness concerns. While some consumers benefit from discounted sneakers, others like those seeking high-demand models, may feel excluded due to the practices of powerful resellers. The focus on volume can create inequality, where wealthier resellers dominate access to popular and sought out styles. This drives up prices and limits opportunities for average consumers. Adding on, the use of bots and insider knowledge amplifies these equity issues.

Overall, the sneaker resale market's effectiveness is definitely mixed. It enhances efficiency by meeting demand for both common and high-demand sneakers, making options accessible to consumers. However, equity concerns rise as well, as resellers leverage market power, often at the expense of average buyers facing inflated prices. While the sneaker market can function well in terms of volume and accessibility, it fails to adequately address fairness, which suggests a need for policies to promote fairer access and reduce information gaps.

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Want to Get Rich Selling Sneakers? Start Flipping Bricks.

GQ.com

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Use an icon of sneakers with a headline: "Brick Flipping vs. Hype Selling." Include two bullet points: Brick Flipping: Common sneakers, lower profits, steady volume. Hype Selling: Rare sneakers, higher profits, limited supply.

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Brick Flipping: Common sneakers, lower profits, steady volume.

Hype Selling: Rare sneakers, higher profits, limited supply.

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Split the slide with a “Brick” icon on one side and a “Hype” sneaker icon on the other.

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Hype Sneakers: Limited supply creates high demand, driving up prices far above retail. Consumers are willing to pay premiums due to scarcity.

Bricks: These sneakers have a higher supply and more stable demand, resulting in lower resale prices. Even with more availability, resellers generate steady profits through volume.

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Hype sneakers are perceived as status symbols, which enhances their demand and value.

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Hype: Higher margins, less frequent sales.

Bricks: Lower margins, frequent sales.

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a rare hype sneaker with a high price tag

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 vs. a common sneaker with an “affordable” label.

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"safe" brick reselling (versus "high risk" hype reselling 

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 (e.g., a checkmark) versus (e.g., an exclamation mark).

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The article demonstrates how supply and demand impact prices, with hype sneakers having limited supply and high demand, driving prices up, while bricks maintain consistent demand and supply, leading to steady prices. It also illustrates volume-based sales strategies, where resellers achieve profitability through frequent, lower-margin sales of bricks.

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The article explores "brick flipping," a sneaker reselling strategy focused on selling common sneakers with lower profit margins but in high volumes, unlike the high-risk, high-reward nature of hype sneaker reselling. It highlights how resellers like Santiago Mejia profit consistently by buying discounted, widely available sneakers and selling them steadily, emphasizing volume, lower risk, and consistent demand.

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Brick flippers make money selling run-of-the-mill kicks

High-profile sneaker resellers make it difficult to buy the hottest, “hype” shoes by driving up the market

“Brick flipping” refers to buying and selling readily available sneakers at or below their retail cost

Bricks are easy enough to find and produce consistent and reliable margins of approximately 20%

Majia makes a profit by buying at a discount; shopping local marketplaces, outlet malls, and online platforms for deals, and purchasing these sales in bulk.

Networking helps establish trust and relationships when the markets are more competitive

Bricks are topping best-seller lists on resale sites

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Find "Bricks" right up there with "Hype" sneakers on stockx.com "Most Popular" page

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Browse by Most Popular and buy deadstock shoes at the best price on StockX, the live marketplace for real Yeezys, Adidas Ultra Boost, Retro Air Jordans, Nike Air Max and more.

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Supply Curve 1: Reflects the supply of common sneakers (ex. Air Force 1) in malls, outlets, and online stores.

Demand Curve 1: Shows the demand for common sneakers, or “Bricks”

Equilibrium 1: The point where S1 and D1 meet. This represents the market where price and quantity are stable.

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Then “Brick Flippers” enter the market:

Supply Curve 2: Supply decreases because brick flippers buy shoes in bulk, decreasing the supply of shoes in stores and online.

Price 1 and 2: Price increases because the supply curve shifts to the left.

Quantity 1 and 2: Quantity decreases because the shoe supply decreases in stores.

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Equilibrium Model of Bricks on Resale Sites

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Equilibrium Model of Bricks on Resale Sites

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increased supply of sneakers introduces more sneakers into the resale market

leading to lower resale prices

more sellers might enter the brick-flipping market because there are relatively low barriers to entry

demand is elastic because consumers are likely more sensitive to price changes in run-of-the-mill sneakers

supply is elastic because retailers can easily restock common sneakers, this prevents price hikes, unlike the hype sneaker market, where limited supply makes prices soar

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TikTok explains how anyone can buy shoes at factory stores, and resell them for a profit online with a low barrier to enter this market.

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@nickmoneymast
Try it out!🧱 #sneakers #sneakerreselling #brickflips #makemoneyonline #resellmethod #reselling101 #resellingtips
♬ No More Parties - Coi Leray

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Brick flippers buy popular shoes and resell them for a slightly higher margin—up to 20%. This aligns with the equilibrium model because fewer shoes are sold in stores (as flippers purchase them), leading to a decrease in the quantity supplied. The higher price is shown at retailers. However, in the resale market, as sneakers are bought in bulk and more suppliers enter the market, prices tend to decrease due to the increase in quantity supplied. Consumers have a relatively elastic demand for bricks; if prices rise, interest declines, and they may choose to spend on other shoes. Similarly, supply is elastic since bricks are easily restocked, unlike "hype" sneakers, where limited supply causes prices to soar. Thanks to the brick-flipping market, you can purchase a pair of bricks off of resale websites cheaper than you can buy them in stores.

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The sneaker resale market has evolved significantly over the years, with current practices like 'brick flipping'—where resellers buy sneakers that are not limited editions or hyped releases and sell them for a small profit—becoming a common strategy.

This contrasts with past policies where the focus was primarily on rare, limited-edition releases that could be sold for substantially higher profits.

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This act changed the tax landscape for resellers, requiring more stringent record-keeping and reporting for transactions exceeding $600.

Previously, platforms like eBay dominated the market, but now, specialized platforms like StockX and GOAT offer authenticated services, changing the dynamics of buying and selling sneakers.

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Companies are launching their own resale platforms to reduce waste. These changes reflect a broader trend of the sneaker resale market becoming more structured and regulated, with an emphasis on accessibility and sustainability.

The industry's growth is underscored by the increasing number of platforms and services that support both resellers and buyers, indicating a maturation of the market that balances profit with consumer and environmental considerations.

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The sneaker resale market faces many market failures and information imperfections. A key issue is information asymmetry, where buyers often struggle to differentiate between authentic sneakers and counterfeits. This lack of knowledge can create things like mistrust, which discourages consumer participation and leads to a less competitive market. For example, when looking for a new pair of Jordans, I would be apprehensive in buying, not knowing if the pair is authentic. Additionally, well-known resellers have a lot of control over the market, using technology and insider information to influence supply and prices. This concentration of power complicates access for average buyers. Finally, the hype surrounding limited releases fosters negative externalities, such as bot purchasing, which makes it harder for everyday consumers to buy them and diminishes market engagement.

These factors definitely pose significant challenges to the standard equilibrium model. One issue is that hyped sneakers often keep high prices because they seem scarce, while more common "bricks" have prices that change depending on reseller strategies. This disrupts the expected stabilization of prices at supply and demand intersections. Additionally, resellers like Mejia, as mentioned in the article, focus on selling large quantities of lower-priced sneakers, seperating from traditional models that assume prices will adjust based on supply. This complexity complicates accurate predictions of price behavior in this market.

The unintended consequences and externalities further highlight the limitations of the standard equilibrium model. The focus on "brick flipping" can lead to overstock of common models, lowering prices and affecting reseller profitability. This misallocation complicates the establishment of true market equilibrium. Adding on, retailers may prioritize production of hyped styles, ignoring and discarding popular basic models, which leads to inefficiencies. The mix of hype-driven buying and regular consumer needs creates a market that doesn't match typical economic predictions, emphasizing that we need updated models to understand these trends better.