StockX is an online marketplace that facilitates the sale of rare apparel and collectibles. Because the company deals with luxury items, it furthermore handles both the authentication process as well as proper shipment.
The business model of StockX is based on charging sellers a percentage fee for every sale they make on the platform. Fees are dependent upon the amount of previous items sold and range between 11 to 12.5 percent.
Founded by Josh Luber, Greg Schwartz, and Dan Gilbert (co-founder of Quicken Loans and owner of the Cleveland Cavaliers) in 2015, the company has been a huge success to date. As of 2019, StockX facilitated the sale of goods worth over $1 billion. Furthermore, the firm now employs over 800 people across 5 offices around the globe.
How StockX Works
StockX is an online marketplace (available both via web and app) that facilitates the sale of unworn streetwear related products such as sneakers and other collectibles. The company brands itself as “the stock market of things”, as its underlying buying and selling mechanism is similar to the one observed in stock markets.
Sellers on the platform place so-called Asks that determine the price they charge for one of their items. Buyers, on the other hand, place bids which indicate how much they are willing to spend for a particular item.
Once the two parties find a matching price (that is if the buyer has the highest bid and the seller likes the price), a successful transaction can be facilitated.
Similar to the eBay model, buyers can also buy items directly – granted the seller uploaded a “Selling Now” bid. Both buyers and sellers can check the competitiveness of their prices through historical price charts provided by StockX.
Since the platform is dealing with high ticket items (some of the listed articles sell in the millions), StockX as the marketplace operator is taking care of the authentication and shipping process. This ensures bidders that no fakes are sold to them.
Many other marketplaces such as Poshmark or Chrono24 have adopted a similar approach in the past. Potent buyers are moving away from platforms like eBay that have traditionally been plagued by fake products and damaged deliveries – and started to favor more niche platforms that can ensure quality and authenticity.
A Short History Of StockX
StockX was founded in 2015 by Josh Luber (former CEO, now board member), Greg Schwartz, and Dan Gilbert (co-founder of Quicken Loans and owner of the Cleveland Cavaliers).
Prior to starting StockX, Luber launched Campless – an online Kelley Blue Book for sneakers that tracked resale prices on eBay.
Campless served as a database for sneakerheads where the community uploaded and tracked current sale prices of various models.
During that time, Gilbert’s saw his kids spending a lot of time on eBay to find and buy sneakers. They were often vary of their purchases, as eBay does not authenticate sneakers. Gilbert contacted Schwartz, who at the time started a calendar app Gilbert himself invested in, to discuss starting a consignment sneaker marketplace.
The pair came to the conclusions that they needed a sneakerhead leading the company, and after inviting Luber for a Cavs game to talk business, struck a deal to acquire Campless two months later.
In February 2016, StockX went live. At launch, StockX offered over 20,000 sneakers for sale. The company became an immediate success. By 2017, StockX was processing over $100 million worth of goods on its platform.
When StockX raised $110 million for their Series C round in June of 2019, Luber stepped down as the company’s CEO and handed the reigns to former eBay Senior Vice President Scott Cutler (with Luber taking an ambassador role for the firm).
In a recent interview with Inc.com, Luber stated his reasons for stepping down as CEO: “I’m way more comfortable and effective at the founding stage than with the day-to-day. I’m a startup guy. I’m a startup founder.”
Today, StockX counts over 800 employees and opened offices in five different countries across the globe. Furthermore, the company facilitated over $1 billion in transactions for the year 2019 alone.
How Does StockX Make Money?
As an online marketplace, StockX makes money by taking a share of every successful transaction the company facilitates.
Compared to traditional marketplaces such as eBay, StockX furthermore handles the authentication checks and consecutive shipment of goods. This arises from the fact that the platform deals with high ticket items, which may be worth thousands of dollars.
For every successful sale, the seller is charged a flat 3 percent payment processing fee. On top of that, a transaction fee ranging between 8 to 9.5 percent is applied.
The transaction fee is dependent upon levels which are calculated by the amount of previous sales made on the platform.
The company has facilitated over $1 billion in GMV for its sellers in 2019 alone.
StockX Funding, Valuation, and Revenue
According to Crunchbase, StockX has raised over $160 million in five rounds of funding. Out of those $160 million, $110 million were raised in their last Series C funding round.
That round earned StockX a valuation of $1 billion, officially making it a unicorn. Notable investors into the company include the likes of GGV Capital, General Atlantic, DST Global and individuals such as Salesforce CEO Marc Benioff.
This Startup Uses A Netflix-Type Subscription Model To Rent Out Luxury Clothing
As common with any high growth (and potentially loss making) startup, StockX does not disclose any public revenue figures. Nevertheless, during their latest funding round, the company mentioned that it has doubled its revenue from 2018 to 2019. Furthermore, gross product sales reached $100 million a month – with commissions ranging anywhere between 9 to 14 percent, StockX most likely earns around $10 million a month.