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StockX

Company type	Private
Industry	E-commerce
Predecessor	Campless
Founded	February 1, 2016 (2016-02-01) in Detroit, Michigan (state), U.S.
Founders	Dan Gilbert Josh Luber
Headquarters	Detroit , U.S.
Key people	Dan Gilbert (CEO) Josh Luber (CEO)
Website	stockx.com

StockX is an online marketplace platform for reselling rare and limited-edition sneakers. The marketplace allows users to list(sell) and bid on(buy) sneakers. StockX acts as a middleman between the seller and buyer, by verifying that the sneaker from the seller is not a counterfeit, before sending the sneaker to the buyer. The marketplace later expanded to include luxury watches, handbag and streetwear in 2017. Headquartered in Detroit, Michigan, this private company was founded in 2016 by Josh Luber and American billionaire, Dan Gilbert. StockX differentiates itself from other reselling platforms through its 3 principles, Anonymity, Transparency, and Authenticity, creating a more stock market like environment. Users can also create a virtual “portfolio” of their items sold/bought. This feature allows users to track the value of their collection as each item fluctuates in the marketplace.

History

2012–2015: Creation of Campless

Campless was the predecessor to StockX, often referred to as the "Kelly Blue Book" for sneakers.

In 2012 IBM Strategy Consultant, Josh Luber created Campless. Campless was a website that produced sneaker resale statistics, by mining and analysing eBay selling data on sneakers. The website provided financial information on sneakers but did not conduct any transactions. Campless derives its name from enabling users to physically camp less outside sneaker shops, such as foot locker to purchase limited-edition sneakers. Instead, it aimed to educate users on the price of sneakers, so they can instead buy the limited-edition sneaker online through the resale market via eBay, the main sneaker marketplace platform at the time.

At the time, information and resources on sneaker reselling and what price a sneaker should be sold at was very scarce and hard to find, the market price was unstable and heavily favoured the seller. Luber's vision for Campless was to be a price guide to sneakers, and provided many statistics on sneakers, such as the current selling price, how many pairs are in circulation in the market and more analytic data. Its main purpose was to help users make "better decisions" when selling/buying sneakers.

2015–2016: Emergence of StockX

Gilbert had always played with the idea of creating a stock market for consumer goods but didn't know where or how to begin. Until one day Gilbert saw his teenage son selling sneakers on eBay, realising that sneakers would be the perfect test for his idea. Luber at the time had already founded Campless and began developing the concept that would be StockX. Gilbert heard about Luber's concept and decided to set a meeting up, here they discussed visions for the stock market of consumer goods and decided to form a partnership.

On October, 2015 Campless and Josh Luber would relocate to Detroit.

2016–Present: The launch of StockX

Luber would continue utilising Gilbert's resources, perfecting Campless, before ultimately launching StockX in February, 2016.

Leading on from this, the company would report that it has raised $6 million(USD) in their funding round in February 2017, from investors such as Rapper Eminem, Wale, NFL star Joe Haden, Actor Mark Wahlberg, AOL chief Tim Armstrong and many more. Money raised from this funding round was reportedly used to help StockX expand into future product categories such as Handbags, and watches.

On May, 2017 StockX expanded beyond the sneaker market and into the luxury Watches and Handbags market.

StockX began listing streetwear clothing on the platform from popular brands such as Supreme, Bape, Off-White and many more soon after in October, 2017. Starting with rare and limited-edition sneakers, StockX has become one step closer to their slogan of the “world’s first online stock market of things” with the expansion into the luxury watch, handbag and streetwear markets.

In September, 2018 StockX raised $44 million(USD) in their Series B funding round. StockX announced that the new funds would be utilised to improve user access to the platform as well as increase its global reach. New investors in this round included global technology-focused investments firms such as GV and Battery Ventures and other high profile celebrities such as Karlie Kloss, Don C, Steve Aoki and others..

Purchase/Verification Process

To list a sneaker for sale it must be in unused/new condition and will be checked upon the verification process. There is one page for each sneaker, that is one page per product. On each page users are able to access sales history and analytic data. Sellers are only able to list the Shoe Size, and Price they wish to sell/buy at via the bidding. Once a deal is struck between a buyer and seller, the sneaker/item is shipped to StockX to be authenticated from the seller. After the sneaker passes the authentication and is verified, it will then be shipped to the buyer.

Fees

Seller Fees

There are additional fees for the Seller when an item is sold, which is automatically deducted from the payout before StockX pays the Seller. All items will incur a 3% Payment Processing Fee and an additional Transaction Fee depending on the product and level status of the Seller's account.

Sneaker Transaction Fee

All Sellers will begin at Level 1, progressing through the ranks to the highest rank of Level 4. Once a Seller reaches a certain level they have 1 year (12 months) from that date to fulfill the requirements again to maintain their level. The perks of having a higher Seller level is lower Transaction Fees. The Level system only applies to Sneaker and Streetwear Clothing sales; Bags, and Watches are excluded from the level system.

The transaction fee for a Level 1 Sneaker Seller is 9.5%, this means the total fees for a Level 1 seller would be 12.5%, when the payment processing fee and transaction fee of the Level 1 account is added together. To progress from Level 1 to Level 2 a Seller must sell 3 sneakers.

The transaction fee for a Level 2 Sneaker Seller is 9.0%, meaning the total fees for a level 2 account is 12%. To progress from Level 2 to Level 3 a Seller must sell 30 sneakers or made $10,000 in sneaker sales.

The transaction fee for a Level 3 Sneaker Seller is 8.5%. Making the total selling fees for a level 3 account 11.5%. To progress from Level 3 to Level 4 a seller must sell 100 sneakers of make $25,000 in sneaker sales.

The transaction fee for a Level 4 Sneaker Seller is 8.0%. When added together with the payment processing fee the total is 11% for a Level 4 Sneaker seller.

Bag Transaction Fees

The seller fees for bags on StockX is 14.5% for the Transaction fee and the 3% payment processing fee, totaling up to 17.5%.

Watch Transaction Fees

The transaction fee for Watch Sellers is 9.9%, totaling to 12.9% when added to the mandatory Payment Processing Fee.

Shipping Fees

Since the seller must send the item to a StockX authentication center, there is additional shipping fees for sellers and this fee varies by country.

• United States - Free
• United Kingdom - £8.50
• Europe - €10.00
• Canada - $20 USD
• All other Countries - $30 USD

StockX's principles

StockX employs 3 principles that allows it to differentiate itself from other sneaker reselling platforms and that is Anonymity, Transparency, and Authentic. These principles are used to standardise sneaker reselling, making the reselling process more akin to buying stocks from a Stock Market.

Anonymity

When buying items from an e-commerce website, buyers tend to purchase from sellers with higher ratings. This is because sellers with high ratings are usually more trustworthy and less likely to be fraudulent. StockX however, does not use a buyer rating system in its website and that is due to its Anonymity principle. This principle was implemented to erase the need for buyer ratings, relieving the need to sort through hundreds of listings to find a trustworthy seller. Another reason for this implementation is to make the purchasing procedure of sneakers similar to the process of purchasing stocks from the NYSE, which continues to allude to StockX's motto of "the Stock Market of things. Made possible due to StockX's middleman and verification system.

Transparency

The site also offers live analytic market data on every sneaker, such as the number of a particular sneaker sold, the “price premium” which is the percentage of the current market price of the sneaker over its retail price. Average price the sneaker is sold at, as well as in-depth analytic information such as volatility of the sneaker, and the “latest sale” price graph which lets users track the market price of each sneaker on StockX.

Authentic

Once an "ask" and "bid" matches the sale is automatically processed and the Seller then ships the item to a StockX Authentication center to be authenticated.

According to the StockX website, the Authentication process is split into two stages.

Step 1: Verification

The product is first checked to see if it matches the invoice, before size, colour, and condition (new/unused) is assessed. After the necessary checks are correct and complete the item will then move onto Step 2.

Step 2: Authentication

The product is then authenticated to ensure the buyer receives a genuine product. The item's packaging is reviewed, ensuring the box is undamaged and true to the authentic box. The products material is assessed, checking that the leather or mesh is correct. Lastly the product's construction is reviewed, the stitching, gluing, seams and other construction details are true to the genuine.

Once an item passes the authenticity check at StockX it is given a “Verified Authentic StockX Tag” and then sent to the Buyer.

Criticisms

Counterfeit "Authentic Tag"

File:Stockxvauthentictags.jpg

The Verified Authentic StockX Tag

As counterfeit technology improves so has the quality of counterfeit sneakers, and with that the accessories that come with the counterfeit sneaker; such as the Sneaker box, receipt etc.

The “Verified Authentic StockX Tag” is one such accessory that has been counterfeited and included in many counterfeit sneakers from China. The tag itself validates the status of an authentic item, and is one of the key principles that enables StockX to operate as a "Stock market of things. Many Consumers from other reselling platforms have been conned into buying fake shoes with the counterfeit “authentic tag”.

This has caused many controversies with many consumers asking StockX to address this issue either by educating users how to distinguish a real “Verified Authentic StockX Tag” from the fake ones, or create another system for verification/authenticity. And, if left unchecked would then therefore damage StockX’s image of authenticity. .

Luber Addressed this issue, clarifying that just because the item has a “Verified Authentic StockX Tag” attached to it does not mean they necessary bought the item from StockX, or has it been authenticated by StockX. Claiming that it is very easy to purchase and find counterfeit “Verified Authentic StockX Tags" on the internet which can be easily attached to counterfeit sneakers. Luber then advised consumers to ensure a sneaker is authentic, to purchase directly from StockX.

StockX and Undercutting

In November, 2018 StockX held a public even at New York City. At this event Josh Luber made a keynote speech before holding a in-person Q&A session with the audience. During this session an attendee asked Luber if he had made or prepared anything to deal with users undercutting each other on the platform. Undercutting occurs when users place their items at a lower than the average market price, which causes the value of the item to drop drastically if users continue to undercut each other. The attendee felt that StockX was the only party profiting from this issue, and certain policies must be applied to prevent undercutting.

The attendee then referenced other marketplaces that has implemented certain countermeasures to prevent undercutting, such as Flight Club and Stadium Goods and asked if Luber would be following these platforms footsteps.

Luber answered this attendee's question by explaining that StockX follows the free market economic system, where the market sets the prices and StockX will not artificially constrain or influence the market in anyway.