Like trollied said, there are people who use bots to buy the latest shoes. You can read more about it if you search for "sneaker bots" in the archive.

the "scalper problem" is strikingly similar to many cryptographic problems - the "sybil problem" in token distribution ("distribute 25 bitcoin every 10 minutes to a random participant") is obviously similar to distributing scarce items which are scalpable (sold below market clearance price).

I once met a guy who had a stack of 50 sim cards used for bot buying sneakers and playstations. Guy didn't work in tech but had learned javascript and selenium for scalping. You can also ship a lot of things to the same address by just altering it slightly like setting the unit/number to 1B or something when there is no 1B, the delivery people will get it to the right place but the unique check will think it's a different address.

He had apparently made enough money doing this to pull himself out of poverty and get a decent life going.

People seem to lose their minds when new sneakers become available, which instantly have a huge resale value. So the anti-bot measures are probably to try and counteract sniping of said sneakers.

Oh, right. They have an artificial scarcity thing going.

So Nike arbitrarily limit the availability of a shoe. People for 'reasons' want to buy the shoe because of limited availability. People are willing to pay more than what Nike is charging. 3rd parties come in to capture that wasted value. Nike wants to stop those 3rd parties for 'reasons'.

There seems to be a lot wrong with this situation. A group using free market, capitalist tools in a free market capitalist country seems the least wrong part.

> 3rd parties come in to capture that wasted value.

That value would otherwise have gone to the people. If all value is captured in this way, the marginal benefit of making a purchase becomes very, very low, and the stuff we actually care about (standards of living, happiness, liberty) become decoupled with economic metrics.

This is one of the situations where lotteries are fairer than auctions.

Ok. "3rd parties come in to capture the value that Nike otherwise left on the table"

I disagree that all value would be gone though. People value things differently, the 'scalpers' are a mechanism to get the goods to those who value it most highly. I personally don't value these trainers for what Nike is asking, so I don't buy them. Should Nike be required to sell them to me for what I value them at? Or should people be able to set their own price, and others buy if that price is worth it to them? If you actually cared about happiness, liberty, etc, I don't see how a pair of trainers, expensive of otherwise is going to change that, but if it does become an issue, just don't by the sodding trainers then!

I don't see why a lottery is 'fairer'. the shortage is entirely synthetic, created by Nike. I'm not big on adding morality into business transactions, but all this stems directly from Nike's decision to create scarcity. The 'fairest' thing would be for Nike to satisfy demand. 'scalpers' are a just symptom of that.

I don't get why 'scalpers' are only deemed to be a problem when the scarcity in question is synthetic. If there's a corn shortage are farmers scalping? Are oil traders scalping when the price goes up? What about when the price of $stock goes up? Are the sellers scalpers? This is how free markets work. You could at least make a moral case for the price of corn being socially bad, you can't make that case for trainers or gig tickets or whatever.

The other obvious solution is for another company to come in and solve the supply constraint that nike created. Although that too is also apparently wrong. If I bought some 'Niko' trainers from the local market, who is being harmed here? I'm not being misled, Nike aren't losing sales, so why?

1. "those who value it most highly" is a dream of economists that has never ever been true. Personal value is relative to wealth and income. I might value something at one full month's salary, but an average CEO could outbid me with a few work days at most.

2. "prices go up when demand is high" makes sense to incentivize more production and reward those that produce thing we need the most. A farmer getting more for their corn during a shortage makes sense, because we'd be hungry if it weren't for them. A scalper, on the other hand, does not create any value. Neither does a stock trader when they buy low and sell high for that matter.

Even artificial scarcity of luxury items can be interpreted as creating some value - owning a limited edition shoe that they can brag about to their friends is valuable to some people. But buying something before others get to it, just to immediately sell it for a much higher price is just exploitation.

Re 1, have you got a better plan? There's communism, are you suggesting that?

>2. "prices go up when demand is high" makes sense to incentivize more production and reward those that produce thing we need the most

Precisely, so why isn't Nike producing more? That is the issue. Again, scalpers are a symptom.

>A farmer getting more for their corn during a shortage makes sense, because we'd be hungry if it weren't for them.

One doesn't follow the other.

If a farmer gets £1 a tonne one year, why does it mean that them getting £10 a tonne the next mean that people won't go hungry. If there's a corn shortage, that implies there isn't enough, so people are going hungry. Further this seems to verging on a moral argument. If we go hungry if it isn't for farmers then that implies that the state should be stepping in to control their excesses, setting the price at £1 a tonne.

>Even artificial scarcity of luxury items can be interpreted as creating some value

And so can buying a good and selling it on for a higher price. Why does one person have the right to brag about owning a shoe, and not another, who just so happens to be willing to pay a higher price? Why is artificial scarcity acceptable, but creating a functional open market out of that not?

And a stock trader does create value. If a person can't buy stock and sell it on for a higher price, that stock is worth less, which means during an IPO a company can raise less money. It's not even clear to me if you could have PLCs at all, because eventually everyone dies, what happens to a company who is owned by a dead person(s) does it get taken over by the state?

If we were talking about actual necessities then I'd agree with you, although my solution would be to have Nike produce more, not hold people to ransom. But for trainers, a specific brand and model, let the free market function, it's the best we've got.

> Why does one person have the right to brag about owning a shoe, and not another, who just so happens to be willing to pay a higher price? Why is artificial scarcity acceptable, but creating a functional open market out of that not?

It's a luxury for poor people. Making it a market turns it into a luxury for rich people

1. By definition a luxury is a luxury. You don't need it, so what's the problem?

2. Are you going to get any part of the market to admit to this?

Re 1, no: it is not communism.

You've conflated "communism" with "something disallowed by my preferred dogma". How very HN of you.

Americans using the word "communism" is invariably an indicator of fallacy.

Maybe you could develop some awareness of your own cultural baggage.

I'm not American, I'm European and somewhat left of centre at that, as you may have detected from my use of the word trainers. the parent was suggesting moving away from a system where those who are willing to pay most, get a good. What other options are there? Socialism? But to me a socialist state that starts controlling footwear is communist anyway.

What dogma are you proposing I have? I know capitalism has its problems, I know communism has its problems, as does socialism and all the other isms. If capitalism is good at anything though, it's good at making trainers available. If youre saying it's unsuitable for that, then it's time to find something else.

It's ok saying the current system is bad, but if you're proposing to get rid of it, you need a replacement and as Churchill may have said, free market capitalism is the worst economic system, except for all the other economic systems.

So why don't you debate my position, rather than my assumed nationality, dogma and cultural baggage?

> 3rd parties come in to capture that wasted value.

The value isn't wasted — it's consumer surplus.

The most powerful anti bot measure would be to make an order of magnitude more shoes. Then everyone who wants a pair can have one, Nike gets 10x the revenue, no reason for bots to game the system, no need to pay VM experts to design anti bot obfuscation.

I guess the halo effect of releasing unobtainable shoes is worth more than all that? If so, why does it matter (to Nike) if bots buy all of them?

Came here to say this. They walked into this by creating a false economy of artificial scarcity.

Just make more shoes, damnit…

People desire the shoes due to the scarcity. Producing more supply would lead to a commodity and less popular shoe/brand over time. No one talks about shaq shoes from Walmart because they are using the model you are suggesting

People desire the Shaqs too - apparently 100M+ have been sold. At 5k to 20k units each time, hyped release Nikes will never ever add up to that type of volume and can never contribute meaningfully to a $200B company's bottom line. They have to be viewed as an advertisement that somehow adds prestige to the shoes they actually make and sell at high volumes. It's probably a much less important advertisement than the big name athletes they sponsor too - I bet they could discontinue the hype releases and not lose much market share.

^

You have absolutely hit the nail on the head; here.

I think - Ye aside - Yeezy is a great example of how there can be a balance between this like insane run of only 1000 shoes (which only sell for like $250-350 USD retail anyway…so - yeah - where’s the profit again?) - to mass market ‘Wal-Mary’ level availability.

The only people who benefit from limited releases are scalpers. Period. There’s no way the shoe company makes that much profit off a limited release because the limited releases are wildly somehow still usually at ‘regular’ prices.

A solid pair of YEEZY 350’s is not that hard to come by for any even half-committed sneakerhead, I’ve got 3 pairs and my girlfriend has two. We hardly tried. I won the lottery twice myself, and only ever entered 6 times.

It’s really a shame what happened with Ye, because despite all the drama; the Yeezy fashion project was actually an interesting one that had some real potential to find an actual, honest-to-God balance between artificial scarcity and actually selling the goddamn product.

The Yeezy brand briefly elevated the adidas brand in the street fashion world. Now they need a new partnership

They have these type of sales frequently:

https://www.nike.com/help/a/nike-snkrs-drawings

After seeing the URL, I was a bit disappointed they do not let sneaker heads make drawings of shoes as a CAPTCHA. Don't require any artistic skill, just some creative effort - worst case, the bot makers will make some interesting contributions to AI art.

There's a big resale market, sometimes shoes that cost $250 go for $10K resale. I used to develop bots for this as well and documented some of the experience: https://juuso.dev/northern-nike-nabob.html

I strongly dislike that you engaged in the shoe scalping arbitrage business, but also appreciate you sharing this information. Excellent writeup, fascinating adventure.

Question: With the Twitter RSVPs, do you think Nike implemented automation to automatically give you the code when you responded with the correct code in a fraction of a second? If so it implies that on some level Nike was fine what you were doing.

Eventually Nike made changes into how they were giving out the codes, so they tried at least. E.g., 0 follower accounts could not gain a code. We switched to using accounts of my contact and his friends to solve this issue. I think the idea of adding a timer for artificial latency was also discussed, but I can't recall if we ever implemented it.

In general we thought that Nike was complicit to an extent. Especially with the on-site checkout and mining of product IDs, they could have cancelled orders done before they shared the link in public. I think on their end, it was a balance of guaranteeing a low supply while ensuring that normal customers did not feel like they were being screwed _all the time_. Yet, even nowadays with the SNKRS app some continue to call it a rigged ballot.

In hindsight, Nike is still positioned somehow uniquely in the sneaker community: it's not guaranteed that money alone will get you a pair. Compare this to luxury brands like Balenciaga, which retail sneakers with a price tag of $500-1000. With the latter everyone knows you have handed out a chunk of cash, but it's not the same thing as the story that you could have waited in line or woke up in the morning to enter a raffle, or been smart enough and early on to pay reseller prices to get a pair before stock ran out which you knew would become a coveted pair over time.

In the past, people needed to queue to get their hands on the fresh stuff and there was a clerk that cloud verify your identity. Of course folks could send in their friends or use fake documents, yet the degree of the procedure was limited to humans in their flesh.

e-commerce sales open the gates to the shop at the same time for everyone. This incentivises massive parallelization of the purchases across accounts, IPs, and identities. Already back in 2017 [1] it's become known to the industry that bots are sniping the purchases faster than humans. Now, we're at a stage where retailers are adjusting their T&Cs to address the resell market [2]. StockX was valued at 2.8B in Dec 2020 [3] and they have to get stock somewhere, right?

The bot industry [4] also developed from simple scripts to SaaS offerings with multi-thousand $ subscription prices just to get access to a bot that's proven to work. The user has to provide a list of proxies that will be used to execute the scripting as these are not provided out of the box (and are hard to get). There are numerous guides on YT and advertising on Twitter that show how to use the bots and how they've been used for purchases. And of course, scarcity is not just for streetwear, but for any type of highly sought for products [5].

[1] https://www.esquire.com/style/mens-fashion/news/a55301/using...

[2] https://www.wsj.com/articles/nike-moves-to-crimp-resellers-a...

[3] https://techcrunch.com/2020/12/16/stockx-raises-275m-series-...

[4] https://www.complex.com/sneakers/how-to-use-sneaker-bots/

[5] https://www.wsj.com/articles/desperate-parents-turn-to-shopp...