How Two Brothers Started A $500K/Month Chain Of High-End Sneakers
Hello! Who are you and what business did you start?
My name is Andrew Pevzner, I and My brother Phillip Pevzner are the founders and owners of Laced Up. Laced Up are a chain of high-end collectible sneaker and streetwear resale stores. We carry brands like Supreme, Jordan, Yeezy, Bape, and more, all limited edition brands with the hype behind them. We currently have 4 retail stores in New York and New Jersey and do a good amount of business online through our website. We specialize in offering high-end collectible items in a convenient retail space with great customer service.
We have grown this business from a single store to 4 locations and over $5 Million annually in sales. We have had over 58,000 orders to customers all over the world. We have built a team of over 30 staff, providing new careers for many and financial security for us and our families.
What's your backstory and how did you come up with the idea?
I am 23 years old and my brother Phillip is currently 24. Business and entrepreneurship have always been big passions for us. Laced Up was founded about 3.5 years ago, but there were 4 businesses before it, starting with a lawn care venture at age 10, that rolled into one another, leading us to this point. Our parents were immigrants from Belarus, and we grew up poor in New York. They always encouraged an entrepreneurial spirit in us, and as we grew up they started multiple businesses of their own.
Early on, we would hire our friends and anyone that was willing to work. To this day, not a single one of our original staff is still with us. Hiring the wrong people for the job will make your life miserable.
Our first business was a lawn care service we did in elementary school. We would go around and offer to mow neighbors lawns for some money. When middle school came around and Phil was about to get his driver’s license, we started a new venture based on Phil’s love of everything automotive, called Motorhead Parts. We would buy crashed motorcycles, ATVs, and dirt bikes on craigslist and part them out on eBay. This was our first taste of the opportunities of selling online. That business continued through high school, but it was not an easy business to run. Having to take apart and clean greasy mud-covered parts really helped to give some perspective for years to come. We finally ended the business in 2013, but soon after started up a new one in 2014, right after we both graduated from high school.
Our third business was simply buying discount shoes from outlet malls, and selling them for a markup on Amazon. We would drive all over the northeast, looking for good deals on shoes from Nike and Adidas outlets, and flipping them online. This business was important for our growth because it showed us the power of online sales, and was our first introduction to the world of sneakers. There were a lot of highs and lows, a big one being having our Amazon Account, and effectively our entire operation, get shut down out of nowhere on the very day that I started college. (That was NOT a fun orientation week) Despite the setbacks, we got our account back up and running, but this really put a fire under us. We were extremely worried about the lack of stability, and having some other factors, like Amazon, have the power to shut us down any day. We cautiously continued with our business but knew we wanted to start something that allowed us to control our own destiny, and not be worried about getting closed by anyone.
Our fourth business was born out of this fear and drive, and our younger brother Tim had the idea to import an electronic fad at the time, hoverboards, and sell them in a retail store. Despite our parents’ massive concerns at this venture, and many people telling us retail was a dying and horrible business to get into, we decide to open Flowboard in November of 2015. We were both in college at the time, and I would drive 3 hours each way home from my college in Boston on weekends to help build and run the store. Phil did a lot of the heavy lifting, I drove back when I could, and Flowboard became more or less of a success! We had a great holiday season, but we knew that this was a fad and would not last. While open, we needed to fill shelf space in the store, (a 900 Square Foot space in our local mall) so our younger brother Tim put some of his personal collectible shoes in to help us out. Phil and I knew almost nothing about the resale shoe market, and the collectibility of sneakers like Air Jordans, and those few pairs in our store lighted the fire that would grow to become Laced Up.
Describe the process of launching the business.
Our “launch” was not so much a launch as a transition out of old business.
Flowboard was doing great, but we saw the writing on the wall. We saw that hoverboards were a fad and didn’t have longevity as a product. At the same time, we saw the potential and growth of collectible sneakers and Laced Up. Those few pairs of Jordan’s that our younger brother put in the store were getting more attention than the hoverboards! Phil started buying more pairs and testing out buy-sell-trade in the shop. It was quickly growing and sneakers quickly became more of our core business than the hoverboards. We decided to take a chance and begin our transition to be called Laced Up. The mall, however, told us that they had an exclusivity contract with Foot Locker, and would not let us change our name and focus on shoes. So, in June of 2016, we left Colonie mall and moved to the better mall in the area, Crossgates, to open Laced Up with shoes as our primary focus.
I came back from college and we began construction on our new store. At 4,000 square feet, it was 4 times larger than our old store, and we had nowhere near the product to fill it. The store looked so sparse and empty, we can’t believe people took us seriously. But that first day in early June 2016, we opened our doors, and I got my first taste of the real potential of sneakers. Within the first hour, someone came in and I sold him a pair of Supreme Air Jordan 5 “Camo” for $450. I was completely floored that someone was willing to spend that kind of money on sneakers, and was immediately sold on the concept. There was really a demand for this kind of store, and we could meet that demand. I was totally sold, and we haven’t looked back.
We still remembered the importance of online presence, and we launched a website, and an Instagram right away. We would post company info and photos, as well as updates on new products that we got in on Instagram. This allowed us to reach the locals, as well as begin to get our name out worldwide. We built our whole platform on Shopify on day 1, so our products could be synched to both point of sale and our website, and this has been a huge help with inventory and data tracking. Everything we did was funded by previous businesses and sales. We didn’t borrow any money but bootstrapped from any profits we made to grow our business and inventory. The nature of this business is difficult because the product is so so expensive. Our average pair of shoes cost over $300, so building inventory was a slow and expensive process. I and Phil did not take a salary for the first 2 years. We had 3 stores and were growing like crazy, but expanding took so much money that we could not afford to pay ourselves a salary. It wasn’t until year 3 that we were able to sit down, organize our finances, and afford to pay the owners a salary.
The biggest lessons we learned from launching were to just do it, prepare for difficulty, and to find good staff from day 1, and invest in them.
Just do it: We had so many people tell us before we launched that this was a terrible idea. Even our parents, who were entrepreneurs themselves, tried to convince us this was not a good idea. We learned through this process that if you have the chance, and believe in your concept, you need to take the plunge and the risk to make your dreams happen. Prepare for difficulty: we knew running a store would not be easy, but we were not prepared for how insanely difficult it would be. We were working 12 hours a day, 7 days a week for the first 2 years, all while taking no salary. We went through losing money, closing stores, and having the very staff we trusted steal from us. Owning a business is amazing, but it can seem more glamorous from the outside. If you are not ready for extreme difficulty and pain, you will not survive. Finally, we learned the importance of staff.
Early on, we would hire our friends and anyone that was willing to work. To this day, not a single one of our original staff is still with us. Hiring the wrong people for the job will make your life miserable. So I will train them poorly. Having an amazing staff of qualified passionate people makes our life an absolute dream. Don't compromise on staff, find the right people, train them well, and treat and compensate them well. A practice we did from day 1 that few of our competitors do is offering staff a 1% commission on all sales they make. In this business the margins are small and the average sales prices are very high, so this is a big cut to take. In 2019 we gave out over $50,000 in commissions alone. It has, however, been one of the best moves we made, as it motivates staff to make more sales, and allows them to reap the benefits immediately. It has been great for motivation and morale-boosting.
Since launch, what has worked to attract and retain customers?
Most of our growth and new customers have been reached through word of mouth and Instagram. We were able to grow quickly by opening in a high rent, high foot traffic location on our local mall. Since then, we have stuck to the opening in busy malls rather than smaller locations on the street with cheap rents. There is a lot more risk in facing long hours and high rents that mall retail entails, but it has paid off for us. From day 1, we focused on excellent customer service and prioritized being as professional as possible, and this has helped us to stand out from a lot of our competitors. Being able to have a professional store buildout and well-trained staff that treat customers well has kept people coming back time and time again.
We are just beginning to really realize the value of advertising and marketing, and 2020 will be a big year of marketing for us. For the first time, we took out ads for the Holiday Season in Queens Center Mall where our flagship location is, and the returns were incredible. We know there is a lot of potential in advertising, and we are just scratching the surface of having a great marketing campaign.
We started and grew our business before Laced Up on Amazon, and there is a lot of benefits to the platform. It is by far the biggest sales platform, and your potential to reach a massive customer base is like no other. It is hard to stand out as an individual seller, however, and even getting approved to sell on Amazon is getting more and more difficult every day. Amazon has full control over your account and can shut you down any day for any reason. We ourselves had our account shut down more than once when we were doing Amazon full time, and that terrified us. Ultimately, we feel as though you need to be able to build your brand on your own website, platform, or store in a way that no single entity can shut you down in one motion.
How are you doing today and what does the future look like?
When we look back at the early years, there are so many things that we can’t believe we did and did not do back then. We have been in business now for almost 4 years. In the first 2 years, we took almost no salary and reinvested everything back in the business to help it grow. We also did almost no accounting. We rarely looked at our numbers in any kind of depth, and honestly didn't know how much, or even if we were making any money.
Some of the biggest achievements we have hit were not the flashy ones, like opening new stores or hitting sales milestones. Instead, they were things like improving inventory systems, calculating accurate margins and profits, and making difficult changes and adjustments that led to real growth.
Some of the biggest moves we have made and deals we have gotten were from shots in the dark. Don't be afraid to shoot for the moon and make big asks. Our motto now is “you don't ask, you don't get.” Be professional and polite, but never be afraid to ask for too much.
So where are we now in 2020? We have 4 retail locations in New York and New Jersey. We just closed out 2019 with over $5 million in sales. We have 30 amazing staff and finally take salaries ourselves. This business has allowed us opportunities we never dreamed of. We have flown all over the country and the world, creating a future for ourselves and many others, I was able to pay for my own wedding, and this is just the beginning. In 2020 our goal is $7 million dollars in sales. We are moving 2 of our stores to higher traffic, much higher rent malls. We are launching a podcast, and putting a larger focus on our youtube channel and expanding on other platforms. We believe this is just the beginning, and we are extremely excited about what the future will bring.
Growth:
- 2016: $832,0000
- 2017: $2,323,000
- 2018: $4,129,000
- 2019: $5,230,000
- 2020: $7,000,000 (Estimated)
Images of our 4 stores:
Through starting the business, have you learned anything particularly helpful or advantageous?
There has been a lot we have learned through the process of starting and growing this business. Here are some of the main lessons and takeaways:
Balance: As an entrepreneur, it is extremely difficult to have balance in the rest of your life. You make your own schedule, and you don't just work 9-5 and go home. But balance and having other things in your life besides work is so important. If your business if your everything, then one small setback in the business can ruin your whole week. It is so critical to have other things in your life (hobbies, family, faith, friends) to balance your life and give you meaning. We have also found that we make our best decisions and perform best when we are well-rested and not overworked. Take time to prioritize your health and getting rest.
Partnership: Laced Up would 100% not exist without both me and my brother, Neither one of us would have been able to start and grow this on our own. Having a good partner and someone you can truly trust and rely on has been the single best thing for us as we started this business. Find someone with a similar vision and work ethic as you, and work together with them, you will be able to do many times more than you could on your own.
Staff: Don't be lazy when searching for and training staff. Our staff has been some of the most amazing, but also some of the most difficult parts of this business. We have had staff steal from us, lie to us, and take advantage of our trust. Be diligent when hiring and training staff, and trust your gut instinct. Don't overlook clear warning signs, and do not be slow to get rid of problematic staff. A single person can negatively affect other staff members and ruin the company culture. On the flip side, reward and invest in good staff. Invest in your people, make an effort to notice and appreciate them, and do not go light on praise.
You don't ask, you don't get: Some of the biggest moves we have made and deals we have gotten were from shots in the dark. Emails we never thought we would get a response to, from people we were sure would ignore us. Don't be afraid to shoot for the moon and make big asks. We have also been able to negotiate deals for enormous discounts just by asking. Our motto now is “you don't ask, you don't get.” Always be professional and polite when making requests, but never be afraid to ask for too much.
What platform/tools do you use for your business?
- Shopify: This platform needs no introduction, but we cannot vouch for it enough. We have loved the power of the platform, and the ability to seamlessly run both our website and our 4 store point-of-sale. They have great website building tools and awesome kits for retail. The ability to generate powerful and instant reports on almost any aspect of our company in seconds is extremely useful for as well.
- Clover for card processing: Awesome for great gear and pricing on credit card processing. If you use Square or a similar platform for your point of sale, they charge crazy rates. Talk to your local bank (we use Keybank) and get info on a larger account for credit card processing. We saved thousands a month switching away from Square.
- Instagram: Free, reach the world, build brand value and a presence.
- TimeStation: We use for doing hours for payroll in all our stores.
- ADP RUN: Payroll for the company.
- Quickbooks Online: Helps us to organize a ton of our books and numbers online. Super easy to use, affordable, powerful.
What have been the most influential books, podcasts, or other resources?
There are so many amazing books and resources out there to learn almost anything. I get easily distracted, and can never really focus on sitting down and reading a book, so audible and podcasts have been amazing for me.
I love the Entreleadership podcast, they have incredible guests and share awesome stories and lessons. Elon Musk’s biography by Ashlee Vance is a fascinating book about my favorite entrepreneur. (I have a Tesla and am totally sold on Musk’s vision). Finally, I love Free to Focus by Michael Hyatt. The biggest lessons I have been learning in the last year have not been about business, but about balance in life, and how to organize yourself and to slow down.
Are you looking to hire for certain positions right now?
We are currently looking for marketing and social media experts to help with advertising and online growth.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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