Topic: GREY SNEAKERS (Nike & Air Randy's hidden market)
I briefly mentioned in the Air Jordan thread about the whole Air Randy thing so I thought it’s good to have a separate thread about it. This is my take on it based on my 25+ years’ passion to sneakers. Feel free to share your thoughts as this is NOT the definite info on the issue as I don’t work in the sneaker industry or law enforcement agency.
For starters, this is a good article from sneakerfreaker years ago THE SCOOP ON FAKE SNEAKERS http://www.sneakerfreaker.com/feature/fake-sneaker-info
Enjoy the light read albeit long read
SO WHICH ONE IS WHICH?
FAKE - by definition means not authentic or genuine. Fake product is the term used for the illegal copying and manufacturing of name-brand products. In also goes by the other names like imitation, replicas, knockoffs or bootleg. BOOTLEGGING is to produce, reproduce and distribute without authorization or license. COUNTERFEIT is an imitation with intent of fraudulently passing it off as genuine. In essence Fake is a poor DUPLICATE of the genuine product.
For example, a Fake Jordan IV starts by obtaining an authentic Jordan IV (normally smuggled out from the original factory) to reverse engineer, make a mould and use inferior direct and indirect materials in the build. If you reproduce more Fake Jordan IV for distribution then you are BOOTLEGGING. If you intend to pass your FAKE Jordan IV as genuine, then you are COUNTERFEITING.
VARIANT is a sneaker with slight variation in the official product. Un-released official colorways that is not distributed to the public are also called Variants (like team college sneakers for players).
FACTORY VARIANTS can either be authentic (will discuss later) or fakes made to look different at factory level i.e. colorways or materials. Variants came into prominence in the sneaker hobby after Jordan retired for the 2nd time with the release of the Jordan XV. What’s ironic is variants pave way to Customization of sneakers and in a way, Nike ID.
HYBRIDS are sneakers made from two or more models fused together. In the 80s especially in Asia before Nike gave distribution rights, retailers buy straight from the factories. Any sneakers damaged in transit are fixed and glued together often times resulting in a sneaker with a different top or bottom. So these sneakers are usually one-offs and not necessarily fakes, it’s just the result of the retailer not wanting to lose a sale. Again, ironically, hybrids pave way to Nike fusions.
FACTORY SECONDS means imperfections found on the finish product which is also same as B-GRADES. B-Grades are sneakers that fail the quality inspection. There are two kinds of B-Grades.
FACTORY B-GRADES are sneakers that didn’t make the final cut in the manufacturing process i.e. factory, before shipment to the warehouse for distribution. Usually these sneakers are considered faulty and ‘written off’ (will discuss later).
OUTLET B-GRADES are finished sneakers shipped from the factory but failed the quality inspection for official distribution to the retailers-consumers. Failed units are usually sneakers with minor cosmetic flaws. Usually if one unit fails the inspection, 100 units before and after are taken out and considered B-Grades i.e. 1 fail unit = 201 B-Grades units to the outlets.
OK, SO WHERE DOES AIR-RANDY FIT IN THE SCHEME OF THINGS?
The best way to describe Air Randy, Marquesole etc is that they cater for the demand that never existed before in the sneaker industry. Can I coined this term or trademark it? LOL. Anyway, I call these sneakers == GREY SNEAKERS
GREY SNEAKERS?!! WHAT THE HELL ARE YOU SMOKING?!
You see, fake sneakers are one of the commodities found in the black market. A BLACK MARKET is the trade of goods and services that are illegal in themselves and/or distributed through illegal channels, such as the selling of stolen goods or counterfeits.
A GREY MARKET is the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer. The term grey economy, however, refers to workers being paid under the table, without paying income taxes etc. It is sometimes referred to as the underground economy or "hidden economy".
So thats why I call them GREY SNEAKERS. It’s not fake because its authentic materials etc but not legit because it is un-authorised, un-sanctioned by Nike. These dont "exist" in a way because on paper these "excess units" (see factory B-Grades) are shown as defects and/or write offs in the manufacturing cost of the Chinese OEM (Original Equipment Manufacturers) when Nike does an audit.
Please picture this scenario.
1. Jordan Brand meeting in Jan 2011, OK’s the retro of the Air Jordan III in Holiday 2011. JB instructed the factory to make a ‘sample’.
2. Sample produced and shown in JB meeting in March 2011. JB’s approved the sample.
3. The sample and ‘TECH PACK’ are given to the OEM factory in June 2011 for mass production of say 1000 units for $XXX money.
4. The OEM factory was given 3 months from July to September 2011 to produce 1000 units.
5. The OEM factory allows OVERRUNS to compensate for possible faulty, defected units or Factory B-Grades. Therefore the factory produces 1000 units + OVERRUN units.
6. The OEM shows these OVERRUNS in the manufacturing cost as write-offs so on paper when Nike does an audit these are considered ‘destroyed’.
7. The OEM instead of ‘destroying’ the write-offs instead sell these units for extra $XXX. This is where Air-Randy etc comes in.
8. Usually the Air Randys get the first batch or the run of units thus the sneakers may look slighty different (see Variant as well) and different packaging and accessories (e.g. the shoe horn used is from previous stock).
9. Air Randy sells these units in July and September online to us, sneaker afficianados, which is the same timeline at the production time at the factory. THUS out in the streets months in advance of the official release date.
10. Once the OEM finished the order and shipped the 1000 units, they can be greedy and sell the TECH PACKS and SAMPLE to the counterfeit industry.
11. JB received the 1000 units in the warehouse in October. Looks for any potential outlet B-Grade units then distribute the remainder to the retailers for the Dec 2011 Holiday release.
Don’t be naïve to think that the Triads etc are not a part of this. They do in the Black Market but they are keeping an eye at the Grey Market as well.
NIKE SHOULD DO SOMETHING!
NOPE! This is the tradeoff for Nike outsourcing their intellectual property to countries with little or even no regard to patents/trademarks, brand protection and lax labour practices in the name of maximizing profits.
At the end of the day, Nike is not pursuing the Grey Market Merchants of the sneaker world like Air Randys and Marqueesoles. WHY?
1. It hardly put a dent on the $$$ billions gross sale profit of Nike
2. Sneakers worn out in the street months in advance of the release are UNPAID PUBLICITY and MARKETING. Nike is really a marketing company as well.
SO ARE THEY GOOD OR BAD?
These sneaker merchants see a market for these grey sneakers and they capitalise on it. It wise business move I say because if Air Randy dont, someone else will. If they stay in the grey market then IMO its all good but if they are doing counterfeiting then HATE HATE.
Again it really is a fine line. In the end we THE CONSUMER WINS because WE HAVE A CHOICE. However its CAVEAT EMPTOR. Let the buyer beware. IT IS WHAT IT IS.
I think it’s too long of a read now. WILL ADD LATER … about NIKEBIZ.
Please feel free to add. Just my two cents worth