Sneakers - September 10, 2014

Ronnie Fieg kicks provided $2.3M profit for resellers

For a while now we’ve been meaning to do a post featuring “all” Ronnie Fieg collabs on one chart.  The problem is that he releases them so damn fast!  Eventually we decided to go for it, and we came pretty close – we only missed the last release, the Sage & Rose Gold GLVs.  Besides that, and intentionally leaving off the 2014 Sebagos, I think we’ve captured every Ronnie Fieg collaboration which has sold a pair on eBay in the past twelve months.

Overview: We’ve split the shoes into two charts, listed in order of total pairs sold:

  • The first half (top) starts with the best seller, New Balance 1600 Daytona at 460 pairs, and runs all the way down to the New Balance 999 Steel Blue which only had 35.  Not surprisingly, these high volume pairs have a lower average price than the more limited pairs.
  • The bottom chart starts with the Asics Gel Lyte III Leatherbacks which sold a total of only 22 pairs (DS and Used). This chart includes the top 5 highest prices, including the Asics Gel Lyte III Salmon Toes which goes for $1,623 and only had 7 DS pairs sold.

Campless Ronnie Fieg 2.3M Aug14 Profile v2

Key eBay Stats:

Total Dollars:                                          $1.201 million

  • Total Retail Price:                          $626K
  • Total Resell Premium:                  $575K (resell profit!)
  • Average Markup:                           92%

Total Pairs Sold:                                     3,804

Top Five Most Expensive Pairs:

  • Asics Gel Lyte III Salmon Toes: $1,623
  • Asics Gel Lyte III Cove:                $1,314
  • Asics Gel Lyte III Leatherbacks: $1,197
  • Asics GT II Rose Gold:                  $917
  • Asics GT II Super Red 2:               $750

Top Five Most Pairs Sold:

  • New Balance 1600 Daytona:          460 pairs
  • Asics Gel Lyte V Mint Leaf:            443
  • Asics Gel Lyte III KFE USA Gold:  430
  • Asics Gel Lyte V Cove :                     421
  • Puma Disc COA Coral:                     347

So, like the question we asked about Nike, is this money that Ronnie could be putting in his pocket?  The retail price of his kicks is already pretty high (the last GLVs were $170), but every single pair sells for more than retail on the secondary market.  There was $575k profit made on his kicks in just the past year, just on eBay.  And as we’ve said before, we estimate eBay at 1/4 of the market, so the total profit could be as high as $2.3 million!  That sounds like incentive enough to raise prices . . . but is it really?

We heard rumors that there were 6000 total pairs produced on the last release, between the two GLVs.  If that’s true, that’s gross sales of $1.02 million.  Lets say RF makes $100 profit on $170 retail, so that would be $600K profit on this release (two pairs).  This analysis starts to follow the same logic as the Nike one, so we’ll stop here, but you can start to see the business case for going after resell profit at the expense of retail sales.  And like Nike, I’m sure Ronnie has thought through the competing priorities of supply & demand, price & volume, and how marketing, hype, exclusivity and scarcity impact the levers.

What do you think?  Will Ronnie Fieg continue to increase prices and try to cut into the resell profit?  Or will he cap prices where they’re at and continue letting sneakerheads make 92% on their money?