Platform gets a kick out of shoe swapping
Houston-based firm taps trading niche of sneakerhead culture
Mahogany “Mo” Terry waxes poetic about her love of trading sneakers with other collectors. But the Houston resident stops short of calling herself a sneakerhead.
“I love sneakers, but I think ‘sneakerhead’ is extreme, and I’m not that extreme,” said the Houston resident, who spends about a half-hour a day perusing a Houston-based sneakertrading platform looking for potential partners to do business with. “I probably have 90-plus pairs. That’s a drop in the bucket for some people.”
Tradeblock, at tradeblock.us, is a relatively new online arena that allows sneaker collectors to skip the resale market and trade for valuable and vintage shoes that are physically authenticated to ensure that traders receive what they’ve been promised.
The company was created in 2019 by Mbiyimoh Ghogomu, Tony Malveaux and Darren Smith, three sneaker enthusiasts who met in middle school in southeast Houston. Each brings a specific talent to the business: Ghogomu is a former IBM executive; Malveaux worked at Foot Locker; and Smith comes from Deloitte.
More than 250,000 people have traded on the platform, according to Ghogomu, the company’s CEO. Each trader pays a $25 fee plus $15 for shipping to arrange a one-for-one shoe trade, authentication and delivery. Each additional shoe in the trade costs $10. Cash can be added to sweeten the deals.
The company doesn’t disclose sales, but month-overmonth revenue is growing at an average of 20 percent, Ghogomu said. As a result, Tradeblock has raised more than $10 million in funding and has about 30 full-time employees.
“The field was very ripe for what we were doing,” said Ghogomu, a 31-year-old Dartmouth graduate who played college basketball for two years, explaining that there are numerous sites where collectors can buy vintage kicks but “nothing for people ready to trade.”
Ghogomu said Malveaux hatched the idea of a sneaker
barter site in 2010 after becoming addicted to ESPN’s “NBA Trade Machine” — in which users become virtual general managers, trading basketball players and viewing the outcome — and figured that the same trading passion could apply to sneakerheads. Smith, for his part, was the first of the three to say, “I don’t like working for The Man,” Ghogomu added.
As for Ghogomu, he traces his passion to being a 12-year-old whose parents of modest means didn’t have the budget to pay retail for Adidas TMAC II’s, the shoes endorsed by thenNBA star Tracy McGrady.
“But we went to Marshalls, and they were on the clearance rack for $30. The first day I wore those shoes to school, I can’t remember another time in my life when I walked with so much confidence,” Ghogomu said. “It’s not the mosthyped shoe of all time, but if I was able to find a pair now, I’d be willing to pay twice the value that someone else would.”
Getting their kicks
The sneaker passion of Ghogomu, Malveaux and Smith is shared by many, as Tradeblock has tapped into a market that’s grown rapidly in recent years. Long associated with players such as Michael Jordan, Kevin Durant, Allen Iverson, Kobe Bryant and McGrady, collectible high-end athletic footwear has expanded to include collaborations such as Nike and Houston hip-hop artist Travis Scott.
The North American sneaker and street-wear resale market, estimated at about $2 billion in 2020, was forecast to grow by more than 20 percent a year, with global sales estimated to reach about $30 billion by 2030, according to Cowen Equity Research.
That growth fueled sneaker-resale companies such as GOAT Group and StockX. Founded in 2015, Los Angeles-based GOAT Group boasts more than 40 million members in 170 countries, and has raised almost a halfbillion dollars, according to venture-capital compilation company Crunchbase. Last year, a $195 million funding round valued the company at about $3.7 billion. Detroit-based StockX, which was founded in 2016, has raised almost $700 million, according to Crunchbase, with a $255 million funding round valuing the company at about $3.8 billion last year.
There are signs, however, that growth in the resale market may be leveling off. U.S. thirdquarter footwear sales totaled about $10.8 billion, about even with year-earlier sales, according to NPD Group. Sales of so-called “performance” shoes fell 6 percent from a year earlier. StockX, which had grown to employ 1,500 workers, has had two rounds of layoffs since June, according to Crain’s Detroit Business.
“The resale sneaker market had been growing very rapidly, but the growth rate has really slowed down over the past year, so the market isn’t as punchy as it once was,” said Neil Saunders, managing director of New Yorkbased research firm GlobalData. “Trading is much more appealing because it allows consumers to swap out sneakers that they don’t want, and it doesn’t require as much money.”
Bigger things
Tradeblock in November added a “Public Offers” feature in which a prospective trader can offer shoes for all to see instead of individually seeking out potential trade partners. Ghogomu estimated that trading volume is up about 30 percent since the feature was introduced.
Ghogomu makes a case that Tradeblock’s platform, non-commission/flat-fee structure and, notably, its authentication process will bring the company larger and sustained growth.
The company examines every shoe in a prospective trade for fake versions, signs that shoes advertised as never worn had been tried on (even one single fitting can reduce a shoe’s value), or other discrepancies. For instance, Nike Air Jordan 1s have an hourglass-like shape in the rear that’s difficult to replicate, while the glue in knockoff shoes will emit a slightly toxic odor that’s more pungent than authentic versions. Telltale signs of tried-on shoes will often include subtle changes in a shoe’s shape or a slightly fuzzy sock liner.
“We invest in some of the best fakes,” said Ghogomu, who said the company general has a “three-strikes and you’re out” rule for members whose submitted shoes are rejected during authentication. “For shoes that are more valuable or more commonly faked, like [Nike] Panda Dunks, we’ll put them through a double-blind [authentication] test. If either one says ‘no’ or we’re inconclusive, we err on the side of caution and we’re going to send it back.”
As owners of a Blackowned business, Tradeblock’s co-founders also promote their ability to both serve a sneaker-trading community populated largely by people of color and to help advance people like themselves. Ghogomu, who was born in Cameroon, says about 80 percent of Tradeblock’s staff is Black or Latino.
“A lot of Black and brown designers at IBM were slightly less experienced than the white counterparts who’d trained at SCAD (Savannah College of Art and Design) or RISD (Rhode Island School of Design), but would almost always recognize the opportunity they were given much more vividly. I thought, if I ever had a company, so much energy would be harnessed,” said Ghogomu. “We look like the people we serve.”
Trader Mo Terry, meanwhile, says she’s looking to generate respect for another contingent that’s often been overlooked.
“Women traders bring a lot to the community,” she said. “Guys think they’re talking to guys and say, ‘C’mon, bro’.’ And I say, ‘It’s sis’.”