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What Can the Sneaker Industry Learn From the Trading Card Hobby?

Last Updated: May 26, 2022
Boardroom compares notes between two booming industries to discover how sneakers can become more accessible to those who love them most.

The sneaker industry does a whole lot of things well. The trading card hobby can say the same for itself, particularly over the last two to three years — and over that time, the two have actually converged.

The footwear business is one of the most valuable in the world, thanks at least in part to the most valuable brand in the world: Nike. Sneakers are currently a $79 billion business, and projected to be $120 billion by 2026. But as more money and demand flows in, more problems arise — especially for sneakerheads hoping to stay as connected as possible to the game.

With every shoe release, one can browse social media and see a plethora of comments to the effect of “trash,” “why doesn’t Nike like me,” “L,” “Kill the bots,” and more from dissatisfied customers who missed out on their top retail targets. This results in “forcing” them to either purchase the pair for two to five times the original sticker price on a reselling platform or completely forgetting about the sneaker they wanted to purchase altogether.

These are very real obstacles, but the industry can begin to address some of them by getting in tune with how another business operates: the world of trading cards, which exists coherently and productively as both a hobby and a community. If these lessons are applied correctly, the sneaker game can discover a new way forward — and the pain sneakerheads experience on a daily basis can begin to be alleviated.

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Rethinking How We Purchase a Hyped Product

At the moment, the most popular but polarizing path to securing a new pair of retail kicks is through Nike’s SNKRS app.

You did everything right. You entered payment information and clicked “Enter Draw” within the allotted time window. After the window closed, you we notified if you’ve purchased the pair. Unfortunately, thanks to the rise of bots and “cook groups” — online communities and group chats that help one another secure shoes — snagging a desired pair is incredibly competitive, with failure occurring much more frequently than success.

That’s why the footwear world should consider adding to its arsenal is the Blind Dutch Auction, a format popularized by Josh Luber, co-founder and Chief Vision Officer of Fanatics Collectibles. Luber believes the sneaker industry could benefit from its adoption.

Here’s how it works:

  • No bidder can see another participant’s bid.
  • The “winning” bid price is determined by the number of items available — if 11 pairs of “Cool Grey” Jordan 11s are up for bid, the 11 highest bidders make the cut.
  • Successful bidders don’t all pay the price they offered. Rather, the lowest of those 11 winning bids becomes the price everyone pays for the item.

“The Blind Dutch Auction absolutely makes sense for the sneaker industry, particularly for high-demand drops,” Luber told Boardroom. “This model gives buyers fair access to product and the market sets the price, not the company. I fully believe this is how all high-demand, scarce products should be sold.”

How would the going rate change for a pair of “Cool Grey” Jordan 11s if consumers set the price via the Blind Dutch Auction format?

“It doesn’t make much sense to set an arbitrary retail price where people will immediately buy up all of the supply, and then go to the secondary market and flip those sneakers for double, triple amounts higher,” he continued. “That means the product wasn’t priced appropriately for the demand in the market. The Blind Dutch Auction is an incredibly efficient pricing mechanism where buyers have equal access to get the product they want and they also get a fair price for that product.”

Another option the sneaker industry can borrow from the trading card hobby? Creating sneaker “booster packs.” For an Air Jordan 1 drop, for example, you select your size but don’t know which colorway you’ll get. There will be odds listed for the different available colorways, similar to how numbered parallels work in trading cards. This could be one way to help keep prices down, as resellers who use bots wouldn’t know ahead of time exactly which colorways were coming. It’s not foolproof, but it helps protect against the same kind of aggressive buying and flipping we’re used to.

Authentication and Grading

Fake sneakers have always been a part of the culture, but the overall disparity in quality up until quite recently was noticeable.

There are still lingering cases out there of buyers acquiring a sneaker through a platform like StockX or eBay with an assurance of authentication only to find that the product was not actually authentic. This is a market shortcoming that brands like Nike and Adidas can take charge in rectifying. Through the use of technology, there are ways for these manufacturers to devise a system by which a digital certificate or token of authenticity travels with a particular shoe for its full lifespan. Some companies are already using NFTs, which offer an immutable record of authentication and chain of custody written onto a blockchain, to achieve this goal.

In the trading card world, counterfeits have been a well-known scourge for decades. Fortunately, Topps, Panini, and other card manufacturers have standardized different techniques like stamps and proprietary ink to help authenticators conclude whether a card is real. As it relates to sneakers, nothing so similar has been formalized as an industry best practice.

Grading is another ubiquitous aspect of the trading card hobby that could be applied to sneakers to great effect. Whenever purchasing sneakers on the secondary market, one thing buyers are always concerned about is the condition. Is it DS (deadstock/never worn)? Near DS? How many “stars” does it have? Let’s face it, the terms “new” and “PSA 10 gem mint” are different concepts. That means there’s a gap to be bridged and an opportunity to seize.

To get us there, a standardized, easy-to-understand grading scale could be applied to provide buyers and sellers more confidence in their sneaker purchases. In selling your sneaker through a given platform, what if an extra step was added to validate its condition and confirm for the buyer that the sneaker was in the condition the seller originally advertised?

Additionally, if you were planning to have a pair to rock and pair to stock, the latter could offer even more value if it came with a grade that casuals can internalize, similar to how trading card collectors purchase PSA 10, PSA 9, or BGS 9.5 cards. Perhaps this level of grading specificity would be reserved for shoes on the level of October Red Air Yeezy 2s or FTOL Dunk SBs in the interest of volume and turnaround times, but the dynamism this system would add to the overall sneaker marketplace is real.

A detailed view of the Nike Air Yeezy 2 “Red October” sneaker on February 27, 2014 in New York City. The Kanye West collaboration is presently reselling for thousands of dollars. (Mike Lawrie/Getty Images)

Revisiting Supply and Demand

Probably the easiest but least-favored strategy on the board? Simply increasing production. Unfortunately, as we’ve seen in the hobby (and basically every other industry on earth), this drives the value down of a product, so great care will need to be taken as to which silhouettes receive this treatment. This strategy makes the most sense in helping someone who wants to purchase a more general release like an Air Jordan retro rather than an all-time grail.

If the industry goes this route — unrealistic as it may be — investment and reselling opportunities would still be there as long as it heeds the lessons of the trading card hobby’s “junk wax” era of the 1980s and 90s during which supply exploded, markets flooded, and values tanked.

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