Josh Luber was working as a consultant for IBM in 2012 when he launched the website Campless, a data-rich resource for sneaker sales. The meaning behind the name was that the "sneakerheads" who obsessively buy and track limited-edition sneakers would no longer have to camp out in front of stores, as they once did. Think of Campless as a Kelley Blue Book for sneakers instead of cars.
Dan Gilbert, owner of the Cleveland Cavaliers and founder of Quicken Loans, was intrigued. Last year, he made a majority investment in the startup, essentially buying it, and now Campless has evolved into StockX, a full stock market for sneakers. The new site launched last month.
Where Campless was more of a data library—it gathered pricing data from a wide range of sources to calculate what a pair of kicks was actually worth at resale—StockX is a peer-to-peer marketplace that allows users to search a specific pair of sneakers and see the most recent sale price as well as every bid. "The amount of activity taking place on StockX shortly after launch," Gilbert tells Yahoo Finance, "proves that there was a need for a better way to transact certain segments of ecommerce. StockX is filling the demand to bring visibility, efficiency and authenticity to tangible products that financial and commodities markets have used for decades."
The sneaker secondary market does more than $1 billion in sales each year. There are many, many other sneaker resale web sites out there, but nearly a third of resales happen on eBay (EBAY). Luber argues it's an inefficient place to buy a pair of shoes. "If you go to eBay and you search for a shoe," he says, "you will get 500 or maybe a thousand listings for that. If you go to the New York Stock Exchange and you want to buy a share of Apple stock, there is one page for it, and every bid and ask is right there. That's what StockX is. There's one page for an Air Jordan Concord, and you can see every bid and all the history of that shoe."
There's another key competitive advantage StockX says it offers over eBay: on eBay, sellers ship their wares straight to buyers, which can cause problems and lead to authenticity disputes. (Counterfeiting is a growing problem in the sneaker world, particularly with the Nike brand, often from China.) When a purchase is made on StockX, the seller sends the shoes to the company's facility in Detroit to verify the product. StockX then sends the shoes along to the buyer. It makes StockX the authoritative middleman in the equation.
As Gilbert's macro-focused comment suggests, StockX could eventually expand beyond sneakers, and that is its eventual plan. "We started with sneakers because the dynamics of that industry almost perfectly replicate stocks," Luber says. "But you could buy and sell pretty much any product this way, if it's not a commodity like toilet paper or a unique, one of a kind item like a work of art. Anything with a finite supply." He lists watches, wine, toys and hoodies.
StockX also has usefulness as a utility for the many different parties involved in footwear beyond just collectors: the site shows trending models along the bottom in a rolling ticker, and provides market data on highs and lows. For example, Luber says he's noted the popularity in the Kanye West-designed Yeezy line from Adidas. Nike and Jordan Brand combine to make up more than 95% of the sneaker secondary market in terms of sales, but in the last year, "the Yeezy is by far the hottest shoe and is selling for the largest premium above retail," Luber says. The Yeezy 350, a low-top trainer, retailed for $200 but now sells for between $800 and $1,000 on StockX. And that's almost completely separate from the aesthetics, he adds: "Scarcity drives demand. And Kanye drives demand."
Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.