The risky business of hype buying and resale

For this week’s Reality Cheque, we’re looking at how reselling can turn cultural trends into real money, even though every purchase is essentially a bet on future demand.

Nearly two decades ago, before every old piece of clothing was mislabelled and lumped together as “vintage,” there were certain items people chased voraciously. Remember the Yeezy 350 V2, a sneaker that went on to define 2010s sneaker mania? How about the coveted, sealed original 1987 copy of The Legend of Zelda, which was at one point considered the holy grail for Nintendo fans? And then there was the 1994 Supreme logo T-shirt, which had many comebacks in the early aughts—mainly when the company did limited drops—and was once considered the badge of peak streetwear culture.

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But one thing to note: When you resell something for a profit, you may need to report a capital gain—Canada Revenue Agency (CRA) applies a $1,000 floor to both the cost and the sale price, so gains only kick in above that. CRA calls these items personal-use property (PUP), which includes cars, other vehicles such as bikes and boats, furniture, clothing, appliances, electronics and homes (other than your principal residence). Losses on PUP can’t generally be claimed.

Why resale has historically made money

Valuable vintage or collectible objects are just a small sample of a larger story: a culture obsessed with owning a moment—and, ideally, turning that moment into money through resale. For a while, the strategy seemed almost foolproof. Find the right brand or the right collaboration, gather a good amount of limited-edition drops, buy early, then sit back and wait for someone else to pay two, three or four times what you did.

But hype has a shelf life. Think about Andy Warhol’s famous quote: “In the future, everyone will be world-famous for 15 minutes.” You could just as easily apply it to Ugg boots, scoop-neck T-shirts or cross-body bags. A sneaker can still be rare. A shirt can still be deadstock. A video game can still be sealed in its original packaging. None of that guarantees value if the crowd that once chased them has moved on.

That’s the catch with stockpiling trendy collectibles: Scarcity alone doesn’t mean an investment buy offers real returns. The question is: Will anyone still want it when you’re ready to sell?

How do you choose what to resell?

For Danny Faria, there’s a smart way to think about buying and selling. Faria is the owner of Retro Quest, a resale shop based in North York, Ont., that specializes in new and used video games and consoles, spanning generations from Sega to Xbox. Rather than chasing the most buzz, he says, act like a detective, a journalist and a market analyst, all in one.

So research the ins and outs of the industries you are planning on investing in. That means paying attention to what’s popular now, and to the news that could shape what becomes valuable next. In gaming, for example, recent headlines have centred on PlayStation’s announcement that it will cease producing physical games by 2028 and only sell digitally.

“PS3 is having a price surge because everyone that follows the market understands what these games going fully digital really means: They may never be re-released physically, so they’ve already shot up in value.” Essentially, taking physical products out of the selling equation has carved a niche—a level of rarity within an already niche market obsessed with rarities. Games such as The Puppeteer, Folklore and Heavenly Sword have all jumped in price by up to—and beyond—100% in the past several months, according to Faria. “Everybody’s after them because they will be extinct.”

In other words, sometimes the smartest resale opportunity isn’t the thing everyone’s talking about, but the thing that’s quietly about to disappear.

Watch out for fakes and scams

Wherever scarcity and money meet, scams aren’t far behind. A quick online search for Super Mario Bros. reveals the $3 million payout one seller received for the earliest incarnation of the game. But that headline-grabbing sale stands in contrast to problems other collectors have faced. This includes mislabelled games and disputes over whether items were authentically verified. Despite the fraudulent pitfalls to watch out for, Faria says that the market has proven to have an occasional sure bet over the years.

He’s had luck investing in Pokémon—the games related to the Japanese monster franchise, which made its debut in North America in 1998, have been consistently lucrative for him despite the fickle tastes that often divide and polarize the gaming market. “Pokémon games continue to go up every year,” he says. “They’ll get popular, then cool off, but even when they cool off, they don’t go down in price. When they get hot again, the price shoots up.” While this may not be a guarantee for profit, it does show that keeping tabs on old-school obsessions has the potential to pay off.

For example, games that Faria started selling for $30 when he first started are now going for $200 or more. The lesson, then, isn’t necessarily to know exactly what will become the next Pokémon. It’s to understand the rhythms of the market well enough to recognize what has staying power. While this may sound like you need psychic abilities, think of how certain editors at media companies are doing this all the time: choosing features, cover stars and film and TV projects that have the potential to snare communal attention and consumption. Being plugged in means plugging in beyond mere interest. Faria suggests you read all the pertinent video game trade blogs and sites and do regular checks on eBay to get a gist of how trendy items are performing overall.

By understanding the intricacies and demand of his market, he has been able to keep his doors open for nine years, do business with resellers who are smart and have the right goods, and, perhaps most importantly, keep tabs on the items that continue to rise consistently in price.

But once a trend hits, it may be too late

That same ability to distinguish between a passing craze and a lasting appetite extends beyond screen time. It is particularly relevant now, as Gen Z embraces analog culture with a growing enthusiasm. On any given Saturday in Toronto, 401 Games has lineups of young, IRL game enthusiasts checking out collectibles labelled as super rare, including game card packs featuring Boa Hancock, a character from the popular Japanese pirate anime One Piece. One such set is priced at $1,850.

The appetite for nostalgia and scarcity isn’t limited to gaming, either. Clothing has its own resale ecosystem, and streetwear in particular has long been fertile ground for speculation. Success is often based on predictions like whether chunky, dad-influenced New Balances will become even more sought-after, or wide-leg jeans have staying power. Keeping up with brand news and market moves may give you clues about what’s next. For example, Drake’s OVO has been sold to an international conglomerate group called Authentic Brands, so fans of the original line have already started to jack up prices for track pants, baseball caps and varsity jackets from earlier seasons, dating as far back as 2011.

But the resale market can turn just as quickly in the other direction. For those who bought a certain line of Nike shoes and apparel, the once-lucrative desire for the Swoosh is now much softer online. The company has been reported to be experiencing a 12-year low in sales.

The geniuses at Nike’s marketing and design teams may be able to pull off a comeback—something that has happened with Canadian brand Roots across the decades. For now, however, some sellers are offering certain styles of running shoes and T-shirts for free or next to nothing, simply to get rid of them.

Brands popular for a hot minute

For John Griffith, who co-owns and manages Ragtime, Ottawa’s longest-running vintage clothing store, with his wife, Shirley, there is a noticeable shift in what people want on the racks. “What are now considered the usual big brands are Patagonia and Carhartt,” two sportswear brands that had a huge heyday in the ’90s and are now enjoying a resurgence. The pair’s shop first opened in 1978 and has witnessed what Griffith describes as “huge changes in demand over decades,” pointing to the rise of digital selling as one of the biggest shifts and the hard-to-pin-down cycle of trends as another. While many may say it is impossible to predict when a garment will become a must-have, looking at what fashion designers at major labels are paying attention to can offer a hint of what’s next. Trends almost always emerge from the underground. Think of what the runways have reflected over the past 10 years: skater culture, voguing communities, next-gen influencers and digital innovators, as well as a brave part of the population that dares to climb mountains and vacation among wild rapids. Both Carhartt and Patagonia got a boost in coolness when rappers and celebrities such as A$AP Rocky and Harry Styles adopted these skater and gorpcore trends in public appearances. Essentially, they were essentially wearing camping clothes to high-profile events or showing up in skatepark looks without ever riding a board.

Following celebrity looks or tracking what gets strong reviews during Fashion Week can be useful starting points, but they should not be regarded as golden tickets. With AI now complicating how people judge news sources, it is increasingly difficult to know which headlines, star sightings or luxury labels carry real cultural weight. Even when you spot a promising signal to profit from, there are still many ways an investment can go sideways. By the time a trend becomes obvious, its resale potential may already be declining. Buyers also have to account for less glamorous factors such as condition, sizing, seasonality, platform and delivery fees, commissions, shipping and taxes. If buying from the U.S., tariffs and currency conversion also matter, meaning a hot item that sells for $1,000 on the resale market does not necessarily generate a $1,000 return. Knock-offs are unavoidable too: For example, the Canadian Anti-Counterfeiting Network reported that $6.6 million in knockoffs were found this summer during an investigation in Surrey, B.C.

Staying in the resale game

For Griffith, a simple lesson learned from decades of selling used clothing is to “stay relevant” in the resale market. That means monitoring major platforms, such as Poshmark, Facebook Marketplace and Kijiji, while also digging into sold and completed listings on specialty sites like StockX for sneakers, and Grailed and Depop for streetwear. Those listings can reveal shifts in demand before they reach the mainstream. Facebook Marketplace, for example, is currently flooded with discounted Yeezys and Sperry boat shoes, while Hotbox, branded as “Canada’s #1 Hype Store,” has a number of Air Jordans that appear to have outlived their hype.

Perhaps the most important thing to remember about resale is the object itself doesn’t change nearly as quickly as our desire for it. This means the people who consistently make money in resale aren’t necessarily the ones with the biggest collections or the sharpest eye. They’re the ones paying attention—to news, culture, scarcity, nostalgia, demand and, perhaps most importantly, when everyone else starts losing interest.

Read more from this issue of The Get:

1. How to stop yourself from shopping on your cell phone 
2. Why Bruce Sellery says the 30% rule may be irrelevant
3. Are HVAC maintenance plans worth it for Canadians?
4. What are my options for building real wealth without the stock market?