When StockX started, the company had two authenticators working out of a closet. That was fine for the first six or seven months, when only 10 or 20 pair of shoes were coming through each day. Then 50 pairs showed up, and the authenticators were in the office until 3 AM processing the shoes. Overwhelmed with work and because there wasn't a set system in place for authenticating, four pair of fake shoes made it through to customers in those early months.
"Buyers called us out on it, and we dealt with it," Luber said. Each person who got a pair of fakes was taken care of "multiple, multiple times over," and Luber said those customers are now some of the company's biggest supporters. "It's on us to have a process that has redundancies and has ways to mitigate [selling fake shoes]," he said. "I don't know if anyone else could possibly claim they have such a great success rate, whatever that is, 99.997 percent, but even one [fake] creates doubt in some people."
Luber, for his part, said he wants "all the authentication to go away." It's understandable. Shortly after StockX Day, the company opened a second authentication facility in Phoenix to help speed the process along, but it didn't help during the holidays. During the shopping rush last year, orders took weeks to show up to customers, if they weren't cancelled for one reason or another outright.
"Even one [fake] creates doubt in some people."
For StockX to expand, it'll have to open more satellite stations around the country and, eventually, the world. That won't be cheap. Sneaker manufacturers could wipe authentication out completely by mass-adopting RFID tech to thwart counterfeiters though. Adidas has flirted with it before, but it's nowhere close to mass adoption. Why would sneaker makers spend money on a process that didn't benefit them or the original customer, anyway?
"It's not rocket science to go out, get fakes and break them down," Luber said. "You have to build [an authentication] process, but I'm not naïve enough to think that someone else can't build that process." For him, the real value of StockX is its anonymous bid-ask model that connects buyers and sellers, which can be used to sell anything online. Authentication is just "a necessary step" to offering that, Luber noted. It's why he isn't worried about eBay's move into authenticating expensive handbags.
"We don't even view eBay as a competitor anymore, and I don't think they view us as a competitor either," he said. Then, after a moment, his entrepreneur side made an appearance. "Which is actually really interesting, because at some point, maybe it's a way to work with eBay." It's this type of thinking that might explain why StockX hasn't given up on selling luxury purses and watches yet. By showing a continuing commitment to broadening its product offers, StockX is likely much more attractive as a business partner.
The typical buyers for high-end watches and handbags aren't checking a sneaker-selling app; they're going to Barneys in person or Chrono24 online, which specializes in high-end watches. Luber himself wears a retro-futuristic HM5 timepiece from MB&F that regularly resells for the price of a new Volvo, just so he can mention that StockX also sells watches when people invariably ask about it.
"You don't need to actually have a whole makeup category just to do Kylie lip kits."
For now, there are only two barriers between a limited item and it showing up on StockX: the ability to create a standardized product page and an authentication process. A lack of the latter is what has kept Luber and Co from selling Nintendo's retro consoles for the past two years. If StockX had been more prepared, selling the NES and SNES Classic Editions would've been an easy move. Same goes for Snapchat Spectacles.
It isn't so much offering an entire category of products as it is having a process in place for selling one-offs of just about anything. For example, Luber has even toyed with the idea of selling Kylie Jenner makeup. "You don't need to actually have a whole makeup category just to do Kylie lip kits," he said.
That's how you grow StockX to be more than just a stock market for shoes. From an outside perspective, selling handbags and watches might not make sense, but the long game here is to take the bid-ask model and apply it to just about anything.