The goal is to create a marketplace that sells items at the real market price. Sounds great. As the buyer of a lot things through the Internet, I’m all for fair prices. But will sellers buy into the service, too?
Called StockX, the site is a so-called “stock market of things”, offering items for sale priced using live market data. At launch the company will sell only sneakers. So if demand for a particular set of Jordan’s increase, so does the price. If demand falls, the price should follow suit. This isn’t a site to find a fantastic deal on a set of kicks, the founder tells me. This is a site to buy or sell sneakers at fair prices.
CEO and co-founder Josh Luber explains the site as using a stock market-like construct to match buyers and sellers at a market price and provide transparency throughout the process. Historical data is provided to buyers and sellers, allowing both parties to see every bid, ask and data point possible.
“In the beginning there will be some sneaker sellers will not be happy about the transparency,” Luber said, noting that this pricing model will result in a more fair market price than what’s currently available from resellers and eBay.
This isn’t Luber’s first site dedicated to providing detailed selling information around sneakers. He founded Campless.com, a Kelley Blue Book-sort of site for sneakers, providing an insanely detailed data set for the secondary sneaker market. Going forward, Campless will merge with StockX and Luber will stay on to lead the company and Campless’ feature set will be available on the new site. The idea is to allow StockX to become a site where sneakerheads buy and sell sneakers while virtually cataloging their collection.
The secret sauce of StockX might not be the fair pricing model, though. The site will sit as a middleman between the seller and the buyer. Unlike on eBay, if there is a problem with the sale, the buyer goes to StockX with concerns instead of the seller. When an item is sold on StockX, the seller ships the item to the company’s Detroit facilities where it is authenticated and then shipped to the buyer.
“Everyone is concerned about fakes,” Luber told me, explaining that StockX’s process allows buyers and sellers to not worry about counterfeit merchandise. “Authentication is the most important value we will add on day one.”
StockX is launching with the backing of impressive investors. Detroit real estate mogul Dan Gilbert is a co-founder and investor. Ron Conway is also invested in StockX. And there’s more, too. Luber says there’s a handful of prominent sneakerhead investors and celebrities who put cash into the venture.
“We rarely invest in high-tech companies outside of Silicon Valley, but the StockX model is very intriguing and is being led by a very experienced and successful management team. Detroit is really starting to sprout some interesting tech start-ups, especially in the FinTech space. StockX is a great fit for SV Angel’s first investment in the Motor City,” said Conway.
“StockX’s live marketplace will harness the internet’s natural ability to facilitate a better way to transact certain segments of ecommerce. We are going to bring the kind of trading platform and visibility to tangible products that financial and commodities markets have used for decades,” Gilbert told TechCrunch. “The efficiency, credibility and liquidity of the financial markets have been foundational to the largest economy in the world. We believe this is the right time to extend this fundamental concept to appropriate sectors of the online consumer marketplace. Ironically, the original Detroit Stock Exchange once sat less than a thousand feet from StockX headquarters here in downtown Detroit. It is only fitting that we are going to build the next iteration of the world’s most efficient market invention almost in the same spot.”
Luber tells me that Gilbert was actually interested in building this sort of site at the same time as Luber was floating the idea around his circle of fellow sneaker enthusiasts. Somewhere along the line, Gilbert met Luber, invested in Campless and convinced him to move the sneaker site’s operation to Detroit. With StockX Luber says Gilbert is involved in high level strategy and growth.
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The secondary sneaker market quietly became a billion dollar market. Luber estimates the secondary sneaker market in the US at $1.2 billion. Globally he says it’s closer to $6 billion.
The site has been in beta for the past few weeks. At launch, there are 20,000 pairs of sneakers for sale from various retailers and resellers who signed up for the platform during the beta.
Initially the site is focusing on just sneakers but sees an opportunity to expand to other verticals including streetwear and handbags or for any item that’s not a pure commodity or one-of-a-kind item like art or houses.
Luber sees the StockX model working well for coins or comic books or watches. It could even apply to collectible cars though I’m not sure. Fair market pricing sounds like something everyone wants, but in reality, sellers often want to sell at the highest possible price while buyers want it at the lowest price. A fair price? That’s not as compelling to either parties.