Bidding for Streetwear
As streetwear becomes more and more popular with young adults, the reselling of shoes and clothes have seen a particularly large boom in the past decade. Gathering success on exclusivity and sporadic offerings, streetwear brands have since forced consumers to rely on a number of different sources past the traditional transactional methods. Buyers and enthusiasts have looked to reselling platforms such as eBay and Craigslist in order to get their hands on the latest apparel and shoes. However, these methods have been extremely scrutinized for their unreliable platform. So, in order to remedy the issues in the reselling market and to streamline the customer-seller interaction, Dan Gilbert founded StockX. At a glance, StockX looks very similar to a financial institution. Users can analyze a certain item as a broker would analyze a stock by observing the trading trends and prices of the item. The price history is displayed in a neat graph, and trade volume depicted alongside the photo of the item.
StockX works by bringing together eager buyers and willing sellers. When two parties agree on a price, a trade for the desired good goes through. To facilitate trades, StockX takes on the role as market-makers for the goods, posting two different prices: a lower one at which buyers are currently bidding, and a higher one at which sellers are asking for the product. For example, a particular shoe sold on StockX can depict a current bidding price of $200 and an ask of $245. So, how does this information affect the buyer’s bidding procedure? Because this style of bidding depicts an ascending bid auction, one could assume that a truthful bid may be the dominant strategy. But, there are a few caveats that prevent truthful bidding from being truly the dominant move. In the case of StockX, because we are given the value the seller gives the product, and because there is a flat $13.95 shipping and “authentication” fee for all domestic orders, bidders must take that into account in their bidding procedure. Following the example of the shoes currently bidding at $200, a buyer’s value of the pair of shoes must be greater than ($200 + $13.95) for him to consider submitting a competitive bid. Additionally, while in a traditional ascending-bid auction, the winning bidder would be paying the second highest bid, a StockX auction will close with the winner paying his bid. While truthful bidding may seem like the dominant strategy, to be an intelligent bidder, you must always keep in mind the additional fees that couple the final bidding price.
The streetwear trend is not going anywhere, and consumers will not tire of paying a steep premium to get their hands on limited-edition items. As the trend continues to grow, the technology industry is becoming increasingly involved. Online platforms such as StockX have helped flatten the bumpy road of streetwear reselling.
https://www.engadget.com/2018/02/16/stockx-day-detroit-sneaker-reselling-josh-luber/