EBay is announcing today that it's going to start authenticating sneaker sales over $100 in the U.S. This is a clear bite into the dominance of StockX and GOAT in the limited sneaker universe.
The authentication will be done by Sneaker Con, the company that runs, well, Sneaker Con. Founded by Yu-Ming Wu and Hayden Sharitt, Sneaker Con was infused with cash by Visionary Private Equity Group in 2018. They provide a well known and influential backer in the sneakerhead community that should provide a solid signal for buyers and sellers. It's a good choice.
The quick story here is that eBay's rep for authentic merch is, uh, not great — especially the sneaker universe, where fakes can be virtually indistinguishable from authentic items. Though the brands themselves have toyed with different ways to authenticate, from NFC tags to blockchain solutions, the counterfeiters have kept up with those various methods too and clone them quickly. About the only way to guarantee authenticity is to get the product in hand and have them examined by people trained to spot fakes. In some cases that spotting can be as granular as counting the number of stitches thrown in between two segments of a shoe, or observing the glue pattern of a midsole joint.
The program sounds pretty much the same as the others on the market:
- Proof of Authentication: Upon receiving the sneakers, the independent authenticator confirms they are consistent with the listing title, description and images, and then performs a multi-point physical authentication inspection. An eBay tag, guaranteeing its authenticity, is attached to the sneakers to finalize the process, driving confidence in the collectability and resale value.
- Third-Party Authentication: EBay has partnered with industry leader Sneaker Con to create a new state-of-the-art facility — leveraging the top authenticators in the industry, a robust checklist of product specifications and best-in-class processes to ensure accuracy and efficiency. With rigorous inspection of the box, shoe and accessories, the authentication underscores eBay’s commitment to giving shoppers exactly what they want.
- Verified Returns: For sellers who choose to offer returns, eBay’s sneaker authentication program ensures the exact item initially sold is returned to the seller, via a verified returns process. Returns are shipped back directly to the authentication center, where the third-party experts verify each item and its condition before returning to the seller.
EBay's reluctance to spin up a person-in-the-middle authentication program allowed a gap for StockX and GOAT to thrive, offering authentication for new and, in GOAT's case, even pre-owned sneakers. The eBay authentication tags even look like those offered by the two players. EBay had already launched its Authenticity Guarantee for watches over $2,000 (StockX also sells watches).
The power of authenticity, of course, is what drives the booming secondary market, where shoes can be limited to thousands of pairs or even dozens of pairs per release. Sneaker culture, which was born on the basketball court and driven largely by Black athletes, musicians and icons, is now squarely mainstream and very big business. EBay has been slow to move here but has significant resources and already does brisk sneaker business, with 6 million sneakers sold in 2019.
One note here is that this may drive higher margin business for eBay because higher end sales in the $500+ range are harder to justify on eBay where authenticity was not guaranteed. eBay was likely already capturing a decent portion of the lower end market but now has a chance to grab some of the fattier meat.
StockX and GOAT have advantages still, even with authentication now a commodity feature. They are purpose driven with a collector in view, and they have significant mindshare in the community. But if eBay is able to rescue its reputation for questionable sneaker transactions (I was once shipped a pair of socks and a literal brick in an eBay transaction gone bad) and incredibly poor seller support (eBay sides with the buyer in the vast majority of disputes, even obvious con jobs) then it could pose a serious threat here.
My hope is that the faster movers here will take this as an opportunity to really revamp their product experiences. Both StockX and GOAT have been relatively stagnant on the app and website front for a while, offering some intriguing yet incremental innovation — but not dramatically overhauling their product.