The Rise & Fall of Sneaker Reselling: Interview with Ping Proxies
Timur Gok, CEO of Ping Proxies, talks about his experience in the niche.
Timur Gok
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Sneaker reselling began as a way for sneakerheads to earn some extra cash. By 2020, it had formed a lucrative ecosystem of bots, proxies, cook groups, and other services, which analysts estimated to be worth over $2 billion. Teenagers with programming skills could make thousands of dollars per month, and many found reselling more lucrative than their day jobs.
However, by the end of 2022, the stream had become a trickle, and it looked like the gold rush was over. What happened? Timur Gok from Ping Proxies, a successful sneaker proxy provider, agreed to recount his journey: the rise and fall of sneaker reselling, and how the members of this ecosystem had to adapt to survive the changing times.
You’re operating a proxy provider that used to specialize in the sneaker reselling niche. Tell us a bit about your company and how it started.
“My first interaction with the proxy industry was in 2017; I had been reselling sneakers and limited edition items for around a year or so while in high school and that operation began to scale in size and complexity. In order to continue to grow that business, I could no longer rely on manual purchasing and that led me into the world of sneaker botting at its infancy. These software products could be used to automate sneaker purchasing at scale but required proxies in order to avoid rate-limiting from sites like Nike or Adidas.
The concept of proxies caught on in no time and I decided to have a pop at running my proxy business targeted at the sneaker-botting market as I had some foundational understanding of computer science. This first business was aptly named sneakerproxies.co.uk and it was very rudimentary, effectively just finding proxies which worked on different sneaker sites from existing general-purpose proxy providers and then marketing/reselling them to a sneaker audience.
This business grew very quickly and within a year or two it had become more profitable than my original sneaker reselling operation all while its complexity and my understanding of the market had increased a lot. It was a very interesting time with a lot of innovation in the market – datacenter proxies were rapidly becoming redundant as sneaker websites began wide-scale ASN banning and ISP proxies had just hit the scene.
I decided it was time to make proxies my main focus and with the help of University of Leeds’ Enterprise Scholarship Scheme and their Spark business initiative, I incorporated Ping Technology Labs LTD (Ping Proxies) in 2020.
During our first two years of business, we exclusively sold to the sneaker audience and we were growing month-on-month substantially into the peak of the sneaker market in early 2022. The business grew in complexity and size – we had served over 15,000 customers and our in-house datacenter and ISP operations were very competitive, working with carriers such as Lumen, AT&T, Charter and Telia. This also gained us a B2B business selling services and infrastructure downstream to several other sneaker proxy companies.
Since then, the sneaker-reselling industry has contracted substantially and for a time, so did our business. We had to refocus quickly, broaden our customer-base and invest in technology; all of which we are doing successfully and we have lots of exciting things coming in the near future!”
The sneaker reselling niche reached its high point in 2022, and then it began going downhill. What happened?
“During covid, things really started to heat up in the sneaker market and there was an influx of new resellers wanting to become part-time entrepreneurs. Sneaker-reselling was getting a lot of publicity and for many sitting on the sidelines, it was the easiest side hustle to understand.
Everyone took advantage of this with brands like Adidas and Nike increasing the number of releases dramatically and encouraging hype-culture. An industry quickly sprouted of sneaker “Cook Groups”. These were subscriptions to a Slack or Discord server where those with (supposed) knowledge and experience in the sneaker resell market would teach new resellers the ropes.
This new wave of market participants created excess demand in the derivative sneaker proxy market and it was an amazing opportunity for our business. We were growing every month and our supply couldn’t keep up with demand meaning for every major release we were out of stock.
In mid-to-late 2022, the bubble burst…The sneaker reselling market hit hard times for several reasons which can include:
- General economic slowdown / contraction in luxury goods markets
- Profits being competed away by excess market participants
- Sharp decrease in bot-able sneaker releases
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Timur Gok
CEO of Ping Proxies.