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If it has already been posted, ah well! It deserves to be posted again!!!!
How Dealers of Rare Sneakers
Are Subverting Nike's Strategy
By MAUREEN TKACIK
Staff Reporter of THE WALL STREET JOURNAL
BROOKLYN, N.Y. -- Eric Eways sits at a computer squeezed between his red
bunk bed and roughly six dozen shoe boxes, scouring an inbox full of
e-mails from sneaker shops in France, Kuwait and Taiwan.
The phone rings, and Mr. Eways, who is 16 years old, dictates the terms of
the transaction: "Take whatever he can get. If he says he can get 17 of the
Greeks, buy all 17."
The Greeks in question are Nike basketball sneakers. They are embroidered
on each heel with the Greek letters Alpha Phi Alpha, the name of an
African-American college fraternity. Nike Inc., which makes small runs of
shoes for all kinds of special events, produced a limited edition of
roughly 2,000 pairs -- the company won't say how many -- in honor of Alpha
Phi Alpha's sponsorship of Philadelphia's annual "Greek Picnic," a major
summer gathering of black fraternities and sororities that hadn't even
begun as Mr. Eways closed his deal.
Beyond the college students, a far more lucrative market exists for Nike's
Greeks. Around the world, sneaker fanatics are willing to pay hundreds and
sometimes thousands of dollars to buy rare styles. Mr. Eways and his
27-year-old business partner, Joe Guerrero, are among the most aggressive
of the dozens of middlemen who work their contacts on the Internet and
among retailers, snapping up as many shoes as possible -- even before some
stores have had a chance to put them on their shelves -- and reselling them
at a profit. In this case, the seller was a collector who had spotted some
Greeks at a Toronto Footlocker store the day before and was willing to sell
them for $70 a pair, the retail price. Mr. Eways plans to ship all 17 pairs
to a sneaker dealer named Shunji in Tokyo, who will "easily buy out the
whole stock at $150" a pair, the teen says.
From Mr. Eways's cluttered Brooklyn bedroom -- where he and Mr. Guerrero
operate an online store called sneakerpimp.com (www.sneakerpimp.com) -- the
two are subverting a key marketing strategy of one of the world's most
savvy consumer giants. Nike's goal is to release a limited number of hot
collectibles at targeted stores on particular dates, which can generate
"buzz" at those outlets and lure customers to buy other Nike products. But
sneakerpimp.com and other online operators effectively hijack the process
for their own ends.
Messrs. Eways and Guerrero exemplify how entrepreneurs are taking advantage
of technology to complicate not just the traditional distribution channels
but also the marketing efforts of big companies. Others who have done so
include the creators of Napster and other music-sharing Web sites. There's
also Harry Knowles, an Austin, Texas, film junkie whose aintitcoolnews.com
(www.aintitcoolnews.com) reports on movies before they are released,
sometimes undermining Hollywood studios' publicity plans. Yet all these big
corporations also benefit from the obsessive attention of their most
mercenary fans. The independent operators generate a sense of excitement
and elusiveness, and can help the big companies tap into the consumer
zeitgeist.
NikeTalk
Nike employees, for instance, say they routinely read an independent online
message board for devotees called NikeTalk.com (www.niketalk.com). The site
opens with this flashing message: "Attention, all snooping Nike employees!
We are a nonprofit site." Its 18,417 users -- at last count -- regularly
challenge one another to post pictures of their rarest, coolest shoes
(called "illest joints"). Sneakerpimp.com, NikeTalk.com and other such
sites both fuel the fervor of sneaker collectors and serve as independently
funded, real-time focus groups for the company. This fall, Nike plans to
publish a coffee-table book on the world's best sneaker collections,
featuring photographs taken at Mr. Guerrero's house.
SHOE SAVVY
Examples of rare, hard-to-get Nike shoe styles
Shoe Model Released In Est. Pairs Released Sneaker-Pimp Price
Zoo York Dunk New York 1,000 $530
Air Force One Taiwan Patent Taiwan 2,000 $250
Zoom Haven Japan 10,000 $170
Rainbow Dunk Japan Over 10,000 N.A.*
Note: Releases in other cities sometimes follow the original release
*No longer listed on Sneakerpimp.com, but black-market price is $500
Sources: Sneakerpimp.com; Retrokid.com
At the same time, the company has written cease-and-desist letters to
NikeTalk.com's moderators for allowing users to post pictures of sneakers
that aren't yet available to the public, arguing it aids their competitors.
NikeTalk didn't respond to requests for comment.
A spokesman for Nike declined to comment about sneakerpimp.com and other
similar operations. "It's not underground anymore when you talk about it,"
says Nike spokeswoman Joani Komlos.
In the flourishing world of "sneakerologists" -- as shoe collectors are
known to each other and retailers -- the lanky, fresh-faced Mr. Eways is
something of a celebrity. A year ago, he posted a photograph of himself on
NikeTalk.com, and in some Brooklyn neighborhoods, customers and fans of his
site recognize him and shout, "Yo! it's the Sneaker pimp!" He and Mr.
Guerrero say they have sold more than 1,500 pairs of sneakers in the last
12 months.
Smaller resellers include Chris Ward and Bobby Miller, both students at San
Bernardino Valley Junior College, east of Los Angeles, who met while
working at a Finish Line footwear store and became immersed in the NikeTalk
message board. Mr. Ward, 23, says he sometimes buys sneakers for his own
collection from sneakerpimp.com but has lately focused on the pursuit of
profits abroad. "A store in Hong Kong just paid us $3,600 for twelve pairs
of shoes last night," Mr. Ward says.
The sneakerpimp.com duo deals primarily in Nike, which produces by far the
greatest variety of limited runs. There are Nike Year of the Horse shoes
released at Chinese New Year in Taiwan, and a new sneaker with a Puerto
Rican Flag on the heel issued every year around New York's Puerto Rican Day
parade. Other athletic companies such as Adidas-Salomon AG have a smaller
cult following. "I don't want to sound like I'm bragging, but I can find
pretty much any pair of shoes in any [color combination] that Nike makes,"
Mr. Eways says.
It's not as easy as it sounds. Nike doesn't publicize the shoes, the
colors, the dates or places of release for its new limited-edition shoes.
One popular limited-edition line, called "Dunks," goes almost exclusively
to independent retailers in hip neighborhoods, and the shoes can't even be
purchased on Nike's own Niketown.com Web site (www.niketown.com). Nike
prohibits retailers from selling certain sneakers online.
In order to find out when and where the shoes are arriving, Messrs. Eways
and Guerrero have had to cultivate contacts with retailers, dealers and
collectors from the Brooklyn neighborhood of Canarsie to Toronto, London,
Hong Kong and Paris. Certain shops will keep hot shoes for them in the
back, and sometimes even give them a discount for buying in bulk.
Sneakerpimp.com's most recent coup: 100 pairs of "Supreme Dunks," a shoe
that was intended to be debuted in October by Supreme, a small, New
York-based chain of skateboard shops. Mr. Guerrero says he scored the shoes
for $200 a pair from another retailer, whom he wouldn't name, and which was
supposed to wait for the Supreme chain's release date. Mr. Eways then found
retailers in Japan willing to pay more than $500 a pair for bulk orders.
The Sneakerpimp.com list price is $700.
The transactions need to be done quietly. Nike sales representatives have
been known to do spot checks at certain stores, scouring receipts for signs
of suspicious bulk purchases, according to retailers and a former Nike
sales representative. If they find any, the shoe giant can suspend or even
cancel the store's account. It isn't clear if Nike has ever done this. "The
whole point of having retailers out there is so that people come into the
store, and see all the new stuff," says a Nike sales representative who
declined to be quoted by name. "We want our best shoes to go to the stores
where the influential buyers shop."
Several area retailers are wary of the young men from Brooklyn. Mr. Eways
says the Supreme skateboard boutique in Manhattan's SoHo district will only
sell him shoes in his own size, 13. He sends his mother to buy smaller
sizes for Asian customers.
Lean Inventory
Mr. Eways keeps his inventory lean and never buys anything when he's unsure
of the demand. This year, he says, Japanese collectors and fashionistas are
driving up prices on hard-to-find colors and models of sneakers in "retro"
styles -- that is, sneakers of a 1980s-vintage design. Prices can fluctuate
dramatically in the resale business, particularly since Nike often
re-releases styles that were believed to be rare. This drives collectors
crazy, but knowing about the new issues in advance is what separates the
true professionals, Mr. Eways says.
Emotional detachment is another key. Mr. Guerrero, who works as a graphic
artist and has a wife and two kids, says he can't bear to part with certain
shoes. He won't sell his Air Jordan IIs, for instance, which are worth as
much as $700 used. "Eric would probably sell them," Mr. Guerrero muses.
"He'll sell anything."
Mr. Eways started as a Nike enthusiast in junior high school, and at first
he simply dealt sneakers to feed his own obsession. Soon, however, his
business became the obsession. The $800 he earned working at a pharmacy the
summer after his freshman year became "pretty much my start-up capital," he
says. He racked up 100 sneaker sales on eBay in 2000, his first year of
business. Now, he says he doesn't use the well-known Internet auction site,
saving on fees.
Sam Carrion, a baseball teammate of Mr. Eways, who says he "dabbles" in
sneakers, says his friend keeps his business "low profile" at school. "He
doesn't need teachers to be knowing how much time he spends buying
sneakers," Mr. Carrion says. (Mr. Eways's grade point average at Brooklyn
Technical High School, where he is a junior, has dropped to 84% from 95%
since he began running sneakerpimp.com.)
Recently, Mr. Eways says, he asked a customer for a letter of
recommendation for "an accelerated business course," and the customer
complied. Mr. Eways says he may use it as part of his application to
college but initially didn't want to tell the customer how young he is. He
predicts sneakerpimp.com will make enough money to finance a couple of
years' tuition; he is thinking of applying to Boston University and the
University of California at Berkeley. He wouldn't say publicly how much
money he is making.
"There are times I wonder, 'What have I spawned?' " jokes Mr. Eways's
father Phil, a fire-safety consultant and self-described child of the '60s.
Though he says he is pleased with Eric's work -- particularly the racially
and socioeconomically diverse group of people his son has met -- he has
reservations. The elder Mr. Eways doesn't wear Nikes himself and is
critical of the company's manufacturing in Asia. He says he doesn't
"understand why anyone would pay more than thirty bucks for sneakers."
Even his son, who plans to cede his business to Mr. Guerrero when he goes
to college next year, wonders sometimes. "The retro sneaker craze will die
down," the teenager predicts, but certainly not before he graduates. "It's
just too easy to make money right now."
Way to go! WSJ, no less!
How Dealers of Rare Sneakers
Are Subverting Nike's Strategy
By MAUREEN TKACIK
Staff Reporter of THE WALL STREET JOURNAL
BROOKLYN, N.Y. -- Eric Eways sits at a computer squeezed between his red
bunk bed and roughly six dozen shoe boxes, scouring an inbox full of
e-mails from sneaker shops in France, Kuwait and Taiwan.
The phone rings, and Mr. Eways, who is 16 years old, dictates the terms of
the transaction: "Take whatever he can get. If he says he can get 17 of the
Greeks, buy all 17."
The Greeks in question are Nike basketball sneakers. They are embroidered
on each heel with the Greek letters Alpha Phi Alpha, the name of an
African-American college fraternity. Nike Inc., which makes small runs of
shoes for all kinds of special events, produced a limited edition of
roughly 2,000 pairs -- the company won't say how many -- in honor of Alpha
Phi Alpha's sponsorship of Philadelphia's annual "Greek Picnic," a major
summer gathering of black fraternities and sororities that hadn't even
begun as Mr. Eways closed his deal.
Beyond the college students, a far more lucrative market exists for Nike's
Greeks. Around the world, sneaker fanatics are willing to pay hundreds and
sometimes thousands of dollars to buy rare styles. Mr. Eways and his
27-year-old business partner, Joe Guerrero, are among the most aggressive
of the dozens of middlemen who work their contacts on the Internet and
among retailers, snapping up as many shoes as possible -- even before some
stores have had a chance to put them on their shelves -- and reselling them
at a profit. In this case, the seller was a collector who had spotted some
Greeks at a Toronto Footlocker store the day before and was willing to sell
them for $70 a pair, the retail price. Mr. Eways plans to ship all 17 pairs
to a sneaker dealer named Shunji in Tokyo, who will "easily buy out the
whole stock at $150" a pair, the teen says.
From Mr. Eways's cluttered Brooklyn bedroom -- where he and Mr. Guerrero
operate an online store called sneakerpimp.com (www.sneakerpimp.com) -- the
two are subverting a key marketing strategy of one of the world's most
savvy consumer giants. Nike's goal is to release a limited number of hot
collectibles at targeted stores on particular dates, which can generate
"buzz" at those outlets and lure customers to buy other Nike products. But
sneakerpimp.com and other online operators effectively hijack the process
for their own ends.
Messrs. Eways and Guerrero exemplify how entrepreneurs are taking advantage
of technology to complicate not just the traditional distribution channels
but also the marketing efforts of big companies. Others who have done so
include the creators of Napster and other music-sharing Web sites. There's
also Harry Knowles, an Austin, Texas, film junkie whose aintitcoolnews.com
(www.aintitcoolnews.com) reports on movies before they are released,
sometimes undermining Hollywood studios' publicity plans. Yet all these big
corporations also benefit from the obsessive attention of their most
mercenary fans. The independent operators generate a sense of excitement
and elusiveness, and can help the big companies tap into the consumer
zeitgeist.
NikeTalk
Nike employees, for instance, say they routinely read an independent online
message board for devotees called NikeTalk.com (www.niketalk.com). The site
opens with this flashing message: "Attention, all snooping Nike employees!
We are a nonprofit site." Its 18,417 users -- at last count -- regularly
challenge one another to post pictures of their rarest, coolest shoes
(called "illest joints"). Sneakerpimp.com, NikeTalk.com and other such
sites both fuel the fervor of sneaker collectors and serve as independently
funded, real-time focus groups for the company. This fall, Nike plans to
publish a coffee-table book on the world's best sneaker collections,
featuring photographs taken at Mr. Guerrero's house.
SHOE SAVVY
Examples of rare, hard-to-get Nike shoe styles
Shoe Model Released In Est. Pairs Released Sneaker-Pimp Price
Zoo York Dunk New York 1,000 $530
Air Force One Taiwan Patent Taiwan 2,000 $250
Zoom Haven Japan 10,000 $170
Rainbow Dunk Japan Over 10,000 N.A.*
Note: Releases in other cities sometimes follow the original release
*No longer listed on Sneakerpimp.com, but black-market price is $500
Sources: Sneakerpimp.com; Retrokid.com
At the same time, the company has written cease-and-desist letters to
NikeTalk.com's moderators for allowing users to post pictures of sneakers
that aren't yet available to the public, arguing it aids their competitors.
NikeTalk didn't respond to requests for comment.
A spokesman for Nike declined to comment about sneakerpimp.com and other
similar operations. "It's not underground anymore when you talk about it,"
says Nike spokeswoman Joani Komlos.
In the flourishing world of "sneakerologists" -- as shoe collectors are
known to each other and retailers -- the lanky, fresh-faced Mr. Eways is
something of a celebrity. A year ago, he posted a photograph of himself on
NikeTalk.com, and in some Brooklyn neighborhoods, customers and fans of his
site recognize him and shout, "Yo! it's the Sneaker pimp!" He and Mr.
Guerrero say they have sold more than 1,500 pairs of sneakers in the last
12 months.
Smaller resellers include Chris Ward and Bobby Miller, both students at San
Bernardino Valley Junior College, east of Los Angeles, who met while
working at a Finish Line footwear store and became immersed in the NikeTalk
message board. Mr. Ward, 23, says he sometimes buys sneakers for his own
collection from sneakerpimp.com but has lately focused on the pursuit of
profits abroad. "A store in Hong Kong just paid us $3,600 for twelve pairs
of shoes last night," Mr. Ward says.
The sneakerpimp.com duo deals primarily in Nike, which produces by far the
greatest variety of limited runs. There are Nike Year of the Horse shoes
released at Chinese New Year in Taiwan, and a new sneaker with a Puerto
Rican Flag on the heel issued every year around New York's Puerto Rican Day
parade. Other athletic companies such as Adidas-Salomon AG have a smaller
cult following. "I don't want to sound like I'm bragging, but I can find
pretty much any pair of shoes in any [color combination] that Nike makes,"
Mr. Eways says.
It's not as easy as it sounds. Nike doesn't publicize the shoes, the
colors, the dates or places of release for its new limited-edition shoes.
One popular limited-edition line, called "Dunks," goes almost exclusively
to independent retailers in hip neighborhoods, and the shoes can't even be
purchased on Nike's own Niketown.com Web site (www.niketown.com). Nike
prohibits retailers from selling certain sneakers online.
In order to find out when and where the shoes are arriving, Messrs. Eways
and Guerrero have had to cultivate contacts with retailers, dealers and
collectors from the Brooklyn neighborhood of Canarsie to Toronto, London,
Hong Kong and Paris. Certain shops will keep hot shoes for them in the
back, and sometimes even give them a discount for buying in bulk.
Sneakerpimp.com's most recent coup: 100 pairs of "Supreme Dunks," a shoe
that was intended to be debuted in October by Supreme, a small, New
York-based chain of skateboard shops. Mr. Guerrero says he scored the shoes
for $200 a pair from another retailer, whom he wouldn't name, and which was
supposed to wait for the Supreme chain's release date. Mr. Eways then found
retailers in Japan willing to pay more than $500 a pair for bulk orders.
The Sneakerpimp.com list price is $700.
The transactions need to be done quietly. Nike sales representatives have
been known to do spot checks at certain stores, scouring receipts for signs
of suspicious bulk purchases, according to retailers and a former Nike
sales representative. If they find any, the shoe giant can suspend or even
cancel the store's account. It isn't clear if Nike has ever done this. "The
whole point of having retailers out there is so that people come into the
store, and see all the new stuff," says a Nike sales representative who
declined to be quoted by name. "We want our best shoes to go to the stores
where the influential buyers shop."
Several area retailers are wary of the young men from Brooklyn. Mr. Eways
says the Supreme skateboard boutique in Manhattan's SoHo district will only
sell him shoes in his own size, 13. He sends his mother to buy smaller
sizes for Asian customers.
Lean Inventory
Mr. Eways keeps his inventory lean and never buys anything when he's unsure
of the demand. This year, he says, Japanese collectors and fashionistas are
driving up prices on hard-to-find colors and models of sneakers in "retro"
styles -- that is, sneakers of a 1980s-vintage design. Prices can fluctuate
dramatically in the resale business, particularly since Nike often
re-releases styles that were believed to be rare. This drives collectors
crazy, but knowing about the new issues in advance is what separates the
true professionals, Mr. Eways says.
Emotional detachment is another key. Mr. Guerrero, who works as a graphic
artist and has a wife and two kids, says he can't bear to part with certain
shoes. He won't sell his Air Jordan IIs, for instance, which are worth as
much as $700 used. "Eric would probably sell them," Mr. Guerrero muses.
"He'll sell anything."
Mr. Eways started as a Nike enthusiast in junior high school, and at first
he simply dealt sneakers to feed his own obsession. Soon, however, his
business became the obsession. The $800 he earned working at a pharmacy the
summer after his freshman year became "pretty much my start-up capital," he
says. He racked up 100 sneaker sales on eBay in 2000, his first year of
business. Now, he says he doesn't use the well-known Internet auction site,
saving on fees.
Sam Carrion, a baseball teammate of Mr. Eways, who says he "dabbles" in
sneakers, says his friend keeps his business "low profile" at school. "He
doesn't need teachers to be knowing how much time he spends buying
sneakers," Mr. Carrion says. (Mr. Eways's grade point average at Brooklyn
Technical High School, where he is a junior, has dropped to 84% from 95%
since he began running sneakerpimp.com.)
Recently, Mr. Eways says, he asked a customer for a letter of
recommendation for "an accelerated business course," and the customer
complied. Mr. Eways says he may use it as part of his application to
college but initially didn't want to tell the customer how young he is. He
predicts sneakerpimp.com will make enough money to finance a couple of
years' tuition; he is thinking of applying to Boston University and the
University of California at Berkeley. He wouldn't say publicly how much
money he is making.
"There are times I wonder, 'What have I spawned?' " jokes Mr. Eways's
father Phil, a fire-safety consultant and self-described child of the '60s.
Though he says he is pleased with Eric's work -- particularly the racially
and socioeconomically diverse group of people his son has met -- he has
reservations. The elder Mr. Eways doesn't wear Nikes himself and is
critical of the company's manufacturing in Asia. He says he doesn't
"understand why anyone would pay more than thirty bucks for sneakers."
Even his son, who plans to cede his business to Mr. Guerrero when he goes
to college next year, wonders sometimes. "The retro sneaker craze will die
down," the teenager predicts, but certainly not before he graduates. "It's
just too easy to make money right now."
Way to go! WSJ, no less!
