Hypebeast arbitrage is the simultaneous buying and selling of extremely popular and hyped retail merchandise released in limited quantities in order to take advantage of differing prices in the market.
Hypebeast arbitrage opportunities are created by brands’ retail strategy based on a point-in-time release of merchandise at limited volumes and at prices low enough relative to the secondary market so as to enable immediate sellout and hype.
Retailers shift some costs and inventory risk to scalpers. However, these costs and risks to scalpers are mitigated by a robust secondary market (example: StockX).
Brands manage the degree of hype by optimizing the mathematical relationships between retail price, secondary price, release volume, number of retail outlets, and distribution of stock keeping units.