StockX is an online marketplace that specializes in authenticated sneakers, streetwear, and watches. The platform operates like a stock exchange where buyers and sellers can place bids and asks on items.
StockX was founded in 2015 by Dan Gilbert, Josh Luber, Greg Schwartz, and Chris Kaufman. Luber is also the founder of StockX predecessor Campless – a website devoted to rare sneakers.
Understanding the Stockx business model
StockX operates as a two-sided marketplace where it connects the buyers and sellers of various products. The company’s business model is based on a commission structure where a transaction fee is collected from each successful sale.
Sellers who list on StockX set an asking price and potential buyers can place bids on the item. When a buyer’s bid matches the seller’s asking price, the sale is completed and the company collects a commission of between 8-10%. The exact commission depends on the product category and also on how many sales the seller has made on the platform.
Revenue is also collected from payment processing fees and shipping fees which are typical of this businessmodel. Payment fees are a flat 3% and the buyer also has to wear any customs duties or sales taxes. Shipping costs vary according to the carrier partner and also the weight, size, price, and type of the item.
Since StockX deals with authentic and sometimes rare collectibles, its business model also focuses on serving as a trusted and credible middleman. How the company achieves this in practice is detailed in the next section.
StockX authentication services
The company’s authentication service ensures that all items sold on the platform are authentic and in the condition described by the seller. To that end, Stockx employs a team of trained authenticators who inspect each item before it is shipped to the buyer.
The process starts when the seller sends the item to StockX’s authentication center. The item is inspected by staff who verify that it matches the seller’s description and that features and details are consistent with the particular make or model. The authenticators also check for wear and damage and ensure that any accessories included in the sale are present.
Once an item has been authenticated, the company ships it to the buyer along with a certificate of authenticity. Items that fail to pass this test are returned to the seller. While this service is essential to rare sneakers and other collectibles, it also proved invaluable as the company expanded to allow smartphones, tablets, and game consoles to be listed for sale.
Note that the cost of the authentication service is likely built into the commission StockX collects from sellers.
Key takeaways:
StockX is an online marketplace that specializes in authenticated sneakers, streetwear, and watches. The platform operates like a stock exchange where buyers and sellers can place bids and asks on items.
StockX operates as a two-sided marketplace where it connects the buyers and sellers of various products. The company’s business model is based on a commission structure where a transaction fee is collected from each successful sale.
Since StockX deals with authentic and sometimes rare collectibles, its business model also focuses on serving as a trusted and credible middleman. This is achieved via an authentication service where sold items are sent to a center where they are inspected for authenticity before being on-sent to the buyer.
The Knight family owns Nike. Indeed, the top individual shareholder is Travis A. Knight, son of Philip Knight, co-founder of Nike, with a 7% stake in Class A stocks and a 2.7% stake in Class B stocks. On the other hand, the Knight family also controls the company tightly through their Trusts and an LLC called Swoosh (the Nike logo’s shape is a “swoosh”). Through individual shares, Swoosh LLC, and Travis Knight’s irrevocable trust, the Knight family controls over 97.1% of Class A and 21.4% of Class B stocks.
Nike follows a wholesale strategy combined with a very strong direct distribution. The company makes money primarily from footwear. As of 2022, over 62% of revenues came from footwear and 29% from apparel. The most successful Nike brand is the Jordan Brand, which in 2022 generated $5.2 billion in revenue. Nike is the master of demand creation and generation through its influencer campaigns, where athletes become an inspiration for everyday people.
Nike leverages both a wholesale and direct distributionstrategy. Indeed, while still in 2022, most sales come from wholesale distribution, in reality, since 2020, Nike has been ramping up its direct distribution through its NIKE stores and e-commerce platform (SNKRS).
Nike generated most of its revenue from footwear. Indeed, in 2022, Nike generated over $29 billion in revenue from footwear, over $13.5 billion in apparel, $2.35 billion in equipment, and over $1.6 billion from the Converse brand.
Nike generated over $47.7 billion in revenue and over $6 billion in net profits in 2022, compared to over $44.5 billion in revenue and almost $5.8 billion in 2021.
Nike’s vision is “To bring inspiration and innovation to every athlete in the world.” At the same time, its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sports innovations, by making our products more sustainably, by building a creative and diverse global team, and by making a positive impact in communities where we live and work.”
Jordan follows a demand generation businessmodel, where its iconic brand works as a propeller for the sale of its footwear and apparel, that in 2022 generated more than $5 billion in revenue for Nike or more than 10% of its total revenue.
Converse is an independent brand part of Nike’s family of brands. Indeed, Converse generated $2.35 billion in revenue in 2022. And like Nike, it follows an heave Wholesale distributionstrategy, where most of its sales are made, through footwear. However, Converse follows also a direct distribution approach where it sells directly via its monobrand stores.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
