Dashin Sugano has a story that many people can relate to. He bought a pair of sneakers on eBay thinking that they were original only to find out that they were actually a pair of fakes.
This is the event that drove Sugano and his partner Eddy Lu to create GOAT, an online/web application for selling and buying sneakers that can guarantee that the shoes on sale are authentic. The company uses image recognition technology and human inspectors to identify fake pairs of sneakers.
According to co-founder Eddie Lu there are several giveaways that a pair of sneakers are fake even when on the outside it’s impossible to tell them apart. The shoes might weigh different, have the wrong color stitching or they can even smell differently.
“When you smell a Nike factory shoe, it has that distinct factory smell. And when you smell a fake Nike, it has that fake artificial smell, if you’ve smelled enough sneakers, you know that smell,” said Lu.
The process of buying and selling sneakers on GOAT is similar to eBay although there are some differences. Sellers who wish to list a pair of shoes on the platform are required to send several images of the shoes to GOAT. The startup then inspects whether the pair is original by using machine learning technology which compares the images sent by the seller to an image database of real and fake versions.
If the pair successfully passes the first inspection, GOAT enables the seller to complete the listing. Buyers then bid on the shoes. Once it comes to the shipping process, rather than shipping the shoes straight to the buyer the seller ships the shoes to GOAT’s headquarters where experts investigate whether the pair is authentic. Once the pair has been approved it is sent directly to the buyer and the transaction can be completed.
GOAT makes its revenue by charging the sellers with interest per sale. The amount of interest the seller is charged depends on the reputation of the seller which is based on previous quality of experience. The average seller is charged with around 10% interest and an additional $5 dollars for a shipping label.
The startup was founded in 2015 and has grown significantly. Today there are 75,000 sellers that use the application and around 250,000 pairs of sneakers listed. Several sellers have already reported that they have made some great profits on the application. Considering that the athletic footwear industry is worth a whopping $17.5 billion with resales making up $1 billion of that market, GOAT has a lot of room for growth.