From Warehouse to Criminal Hands: Organized Crime Moves up the Retail Supply Chain

Those Jordans you bought might not be fake — but they could’ve been re-sold to you after being stolen by organized crime groups. Product theft has risen tremendously and is picking up traction beyond retail stores — moving across the supply chain from warehouses to distribution centers, per WSJ.

• In recent years, shipping and transport companies began tracking and booking shipments in online marketplaces.
• Their increased usage has made it easier for criminals to access these systems — and pretend to be truckers to pick up shipments.

“The supply chain is under attack right now:” According to theft prevention network CargoNet’s operations VP — who also reported a 63% theft increase across the supply chain in the first half of 2023 from the previous year.

And that’s becoming a major problem for retail giant Nike (NYSE:NKE), potentially costing the company millions each year. While Nike doesn’t break down how much it loses to retail theft, LA police seized $7M worth of stolen Nike sneakers in June, and one store lost $750K in a single year.

Stolen Jordans hit the lucrative resale market

Limited edition sneakers can cost hundreds extra in the resale market — and in some cases, tens of thousands more. Thieves often use online marketplaces to offload stolen products.

• Online retail marketplace StockX estimated the primary sneaker market to be worth $100B in 2019 — giving the secondary sneaker market a value of $6B.
• By the end of the decade, Cowen analysts expect the resale market to grow to $30B.

The National Retail Federation has estimated the retail industry to lose $100B this year from theft — costing the average household $500 in higher prices. To tackle the resale of stolen goods, Congress passed a law in June that requires resale platforms to obtain the personal information of resellers that move at least 200 items or $5K annually. But sellers have plenty of options to offload their product in such a lucrative market.