Pando

'Sneaker bots' are snapping up limited edition shoes

People are paying hundreds of dollars for 'sneaker bots' so they can buy out limited edition shoes and resell them for profit.

By Aimee Pearcy , written on December 16, 2020

From The Ecommerce Desk

It's the moment you've been waiting for. You set three different alarms, and you could barely sleep last night because all you could think about was waking up early enough to turn on your computer and snag those limited edition Nike shoes you've had your eye on for months. 

Your palms are sweating and your hands are shaking as you hover your mouse over the 'buy' button. In the corner of your laptop screen, you see the clock tick over. It's time. Your body tenses as you click. You release the breath you've been holding, and...

'We're sorry. It looks like this item has sold out.'

...

Bots are sophisticated pieces of software capable of mimicking human behaviour and solving a CAPTCHA. They are designed to aid the purchase of limited availability stock.

For years, people have been using bots to snap up concert tickets and resell them at a premium. According to a report by the New York Attorney General, a single broker used a bot to buy 1,012 tickets to a U2 show in one minute back in December 2014. By the end of the day, this broker and one other had managed to buy a combined total of 15,000 tickets to U2’s shows across the United States. 

"Ticketing, to put it bluntly, is a fixed game," the report states. "Consider that brokers sometimes resell tickets at margins that are over 1,000% of face value. Consider further that added fees on tickets regularly reach over 21% of the face price of tickets and, in some extreme cases, are actually more than the price of the ticket. Even those who intend their events to be free, like Pope Francis, find their good intent defeated by those who resell tickets for hundreds or even thousands of dollars."

In an attempt to solve the problem, the U.S. Better Online Ticket Sales (BOTS) Act was introduced in 2016. The act made it illegal to buy tickets with bots by evading security measures and breaking purchasing rules set up by the ticket issuer. It set a fine of $16,000 for violations.  

Specifically, the BOTS Act applies to "concert, theatrical, performance, sporting event, show, or similarly scheduled activity". Anything outside this category remains fair game. 

  

There are no laws against using bots to buy products from ecommerce stores -- but it does go against most stores' terms of service

On Black Friday 2018, U.S. politicians first introduced the Stopping Grinch Bots Act, designed to “prohibit the circumvention of control measures used by Internet retailers to ensure equitable consumer access to products, and for other purposes.” 

But now it's over two years on, and the bill is still in the first stage of the legislative process. And according to Skopos Labs, it only has a 3% chance of being enacted.

Even if the bill were to eventually go through, it would be difficult to enforce.

Buying and setting up a bot isn't a complicated process. Once you've bought it, it's as simple as entering your details and telling it what to buy by entering a URL or keywords. Once the bot is set up, it will automate the checkout process and purchase items quicker than any human can -- often in less than a second. The use of bots violates most retailers’ terms and conditions -- but that hasn’t stopped people from doing it.

This year, bots have been all over the news after people have been using them to buy games consoles. In Pando's newsletter a few weeks ago, I wrote about how people were using bots to get their hands on PS5s. This guy managed to hoard 37 of them in his living room. 

Earlier this year, a 16-year-old American from Virginia even created his own online shopping bot that guarantees instant purchases of the Nintendo Switch. He named it Bird Bot. 

“It took me a few days; it was pretty quick. I had a lot of free time,” he told Mashable

But the real money, it turns out, is in limited edition products -- more specifically, designer shoes.

 

Right now, the designer sneaker market is booming -- and so is the sneaker bot community

Shoe bots have been especially popular since around 2016 when Kanye West released the first pair of Yeezys. They sold out in seconds.

Now, there's an entire subreddit, ‘r/shoebots’, dedicated to buying and using shoe bots. It describes itself as “the go-to spot for talk about bots for Yeezys, Supreme, and just clothing and shoes in general”. 

Right now there are multiple bots on the market. For instance, Nike Shoe Bot is available for $499/year, while the All In One Bot (AIO Bot) costs $325. Many bot sellers limit their supply, since selling too many bots would lead to buyers competing against one another and reduce success rates.

Evan Dvorak is an 18-year-old high school senior from Wisconsin. He’s been using shoe bots to buy and resell designer shoes for about a year now, and he’s recently made it into a part-time business alongside school.

“I recently quit my job to do this after I started getting good at it,” he says. “I first got into it when I got into clothes and streetwear. I used to always be the one paying resell for the items, I was sick of paying outrageous prices for stuff I wanted so I decided to be the one marking up prices and make money instead of spending it.”

As for how much money he makes from it, he says that it depends.

“Some weeks I'll put like one to three hours in and some, over ten. Just this morning I had to get up at 5 am for a release. And I'm currently making about $500-$1,000 a week. The most I've ever made on a single sale is about $600, but I've got one item that I'm holding onto that I would make about $6,000 on."

“I plan on going into cybersecurity, and this could potentially be a full-time job if I were to get good enough and if that market was stable, but it's unlikely that will happen,” Dvorak says when I ask him about his plans post-high school. “Anything can happen, there isn't much job security. With a normal job you at least know you're getting paid no matter what, but with this if you mess up a release or there just aren't many happening then you don't make any money. Anyone wanting to get into this should do their research before they jump into the game, it's much harder than you think and requires a lot of time and money.”

In 2019, Cowen Equity Research classified sneakers as an emerging alternative asset class. Analysts predicted that the total global sneaker market stood at $100 billion, while the global resale market stood at $6 billion. By 2030, they believe the resale market has the potential to climb to $30 billion. 

“Some just want to look rich, some live the artist behind it, others love the culture, and some love the fashion,” Dvorak says when I ask him why people are willing to shell out such huge sums of money for designer shoes.

 

Websites are trying to crack down on sneaker bots

Initially, it doesn’t seem like this would be a huge issue for brands -- they’re still making a profit, after all. But when sought-after products are released in such small quantities, it turns out that loyal customers quickly get fed up and disillusioned if they’re consistently being beaten by bots. If nothing is done, brands can end up losing their biggest fans. 

Popular brands such as Nike, Adidas, Yeezy Supply  have begun releasing their products with a raffle-based system, where all buyers are entered into a queue, and some proportion of people from the queue are selected from the raffle to buy the product. Nike’s Terms of Use state that it will cancel or refuse any order it determines was placed using a bot. At the beginning of this year, the company took this a step further and cancelled an entire online sneaker drop after bots overwhelmed the sites.  

Last year, Los Angeles-based skate company, The Berrics, tricked a bot into spending $11,000 on a pair of shoes, then publicly mocked them on Instagram. 

“You have to be putting constant effort in because the game keeps changing,” says Dvorak when I ask him about the challenges of running a successful shoe reselling business. “Websites keep updating their bot protection so you have to know what's new. You also have to know what types of shoes and styles are selling, and you have to know where they're selling.”

 

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