When StockX closed its Series C funding round for $110 million in June, the Detroit-based company skyrocketed to the top of resale.

Called “the stock market of things,” StockX competes in the realm of sneakers and streetwear with top sneaker resale companies Goat and Stadium Goods, and smaller companies Project Blitz and Urban Necessities.

StockX cofounder Josh Luber helped break down the allure and opportunity of sneaker resale and how basic financial principles and trading laid the foundation for StockX’s valuation.

“Who wouldn’t buy any asset that is worth five times as much money as it’s being sold for?” Luber asked.

He used the Air Jordan IV sneaker as an example to break down the basic principles of supply and demand. On one side there’s a pair of black Air Jordan IV sneakers that were available on general release for $190 and sold for $230 on the secondary market, and on the other side, another pair of black Air Jordan IV sneakers that are reselling for $23,000. The second pair is a collaboration between Jordan and rapper Eminem and only 10 pairs are in existence.

Luber explained, “$23,000 is the true market price. We know that because we have people that are on both sides of that transaction.

“These basic economic principles of supply and demand have almost no presence and no reality in the rest of our e-commerce world,” Luber said. “The actual stock market is the best example of where supply and demand does exist. The unique part of this is not the fact that we sell millions and billions in dollars of sneakers every year. It’s the fact that we’ve taken this model the way the stock market connects buyers and sellers and applied that to consumer goods.”

Luber said the platform’s live bid and ask model and “sell now” option is what makes StockX so revolutionary, because it gives commodities like sneakers, handbags, watches and, in a month, trading cards, a true market value outside of the retail and wholesale model.

He also used the “Ben Baller Did the Chain” IPO from January as an example for how the market determines the value of products. Pairs of red and black slides with the phrase, “Ben Baller Did the Chain,” from A$AP Ferg song “Plain Jane” were offered to the public in a Blind Dutch auction, which means that the top bidders were sold the slides for the lowest amount in the top bids. In Luber’s example, the slides cost $30 to make, would retail for $70 in a retail setting, and had an average clearing price of $210. “All we did was copy the stock market,” he said.

Luber believes that companies can also benefit from the marketplace model at the end of the product cycle. “At the end of every season you have all this clearance happens and it’s just sort of arbitrary slashed,” he explained, “but if you understood demand, maybe board shorts you could sell for 10 percent or 20 percent off if you had bids and you could understand what demand is for that at any given point in time. In all of these scenarios, if you do it right, if you choose the products that are truly supply and demand constrained and go out there, the brands should actually make more money.”

StockX has more IPOs coming soon, which Luber declined to share — though he did quickly spill that an art vertical is coming soon — but also said an authentication center will open in Atlanta next month, increasing its total number of locations to six, joining Detroit; Tempe, Ariz.; New York City; London, and Eindhoven.

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