How Urban Necessities founder built a sneaker empire worth millions - Business Insider

Urban Necessities is a consignment and resale company that sells rare sneakers and streetwear. Founder Jaysse Lopez says the company brought in close to $21 million in sales last year. He estimates that about 70% of his business comes from sneakers.Here's how the multimillion-dollar company became profitable by combining consignment with traditional buying — plus, a look at the business model that brought the founders success.Sign up for Business Insider's retail newsletter, The Drive-Thru.Visit Business Insider's homepage for more stories.As the sneaker resale industry grows, so does the profile of the resellers who are figuring out how to mine the market for profit. The sneaker resale market, which Cowen & Co. estimates say could be worth $6 billion globally by 2025, is not without its tycoons. Those who figured out how to hack it have made millions. Business Insider recently interviewed a 27-year-old sneakerhead, for example, whose fleet of four stores earned $6.9 million in sales last year.But few sneakerheads compare with the massive, skyrocketing success of Urban Necessities, a consignment and resale company that sells rare sneakers and streetwear. Before he founded Urban Necessities, Jaysse Lopez was homeless. He spent time panhandling on the Strip in Las Vegas, Nevada, and learning about the sneaker resale world by watching more experienced resellers line up for new releases in malls. Lopez eventually got off the streets and got a job with a cell phone company, which he left due to illness in 2012. Around this time, he decided to try his hand at reselling sneakers. He bought 18 pairs of the Area 72 Barkley Posite in early 2013 with the help of his then-girlfriend, Joanie Barangan. He sold them all for a $200 profit each.After this sale, Lopez started getting serious about learning everything he could about reselling.“I didn't know my left from my right, but I just knew that if I undercut everybody, sooner or later people will kind of hop on the train,” he said.Lopez saw his success dip when he started running out of goods to sell six months into his venture. He moved into a motel and started selling his own clothes to stay afloat. As a last-ditch effort, while sleeping on his friend's couch, Lopez persuaded some of his former buyers to consign their shoes that they no longer wore for Lopez to sell at a trade show, which he did in the summer of 2014.At this trade show, Lopez sold around 400 pairs of shoes and met a Boulevard Mall representative who persuaded him to open a shop with the promise of a few months in the space rent-free. The shop, which Lopez said was located in a hallway that had been closed for five years, officially opened in September 2014. The business took off.“The day that I signed the lease I had $40 to my name,” Lopez said. “By December 31, I did a million dollars in sales.” Lopez and Joanie, who is now his wife, are currently co-owners of the business, called Urban Necessities. Lopez said the company brought in $4 million in sales in 2015, $8 million in 2016, $12 million in 2017, and $18 million in 2018. He said he hopes to build the company into a $500 million business.Urban Necessities sells other merchandise in addition to sneakers, including streetwear and accessories. “It had to be an experience and I couldn't just pin myself to sneakers,” Lopez said of the company. “It's just been evolving all of this time.”Here's a look into the company's unique business model, which Lopez has turned into an empire in the resale world: