WEBSITES THAT DELIVER PASSIVE INCOME
With a portfolio of revenue-generating sites, this company grows by creating passive revenue for its partners
Income Store is on a mission to become the world’s biggest online property manager while encouraging entrepreneurship and generating passive revenue for its partners. To do so, the business buys or builds revenue-generating sites on behalf of its website partners—“regular” people looking to create passive income. Income Store’s digital experts handle site management and optimize performance to generate as much revenue as possible. Each month, Income Store and the site partners split the profits. Most of the company’s thousands of properties are niche sites, with content and products built around specific areas of interest, such as outdoor sports, healthy living, or pet rescue. Collectively, these web properties boast one billion visitors and generate millions in revenue each month.
President and Co-Founder Kerri Courtright says their propensity to pivot paved the way for Income Store’s impressive three-year, 389-percent growth rate. Their scalability earned them a spot on the Inc. 5000 list for the sixth time in seven years. Since its launch in 2009, Income Store has evolved, tweaked, and retooled everything from its offerings to its operations. When the team sees an opportunity, they plan, target and then “shatter the space,” she says. For example, within a year of launching an e-commerce presence, Income Store became Shopify’s largest vendor, now managing more than 300 stores.
SPACE TO EXPAND
As time spent on digital sites increases and consumers ramp up their online shopping, Income Store and its site partners benefit. But there are more than external factors at play. “People are comfortable working with Income Store because our business model centers around our win-win revenue sharing platform,” says Courtright.
It takes creativity, collaboration, and passion to identify niches, build websites, and continually optimize performance to maximize their website partner’s assets. The majority of Income Store’s workforce is incredibly young. These employees grew up with the internet, so who better to help run digital businesses? To facilitate their work, Income Store recently moved to a new, 22,000-sq.-ft. headquarters (a former Atari office) in Lancaster, Pennsylvania.
Income Store provides a playful tour of their facilities in an installment of its video newsletter, found at IncomeStore.TV. Between their new Lancaster campus, their headquarters in Romania, and their remote workforce, Courtright says it feels like they are hiring a new employee every day.
THE NEXT WAVE OF GROWTH
To lead the charge and pilot the next inevitable pivot, Income Store recently appointed a new CEO, David M. Kelley, former COO of TDAmeritrade. “Most business problems have already been solved; it’s just that they’ve been solved in a different industry or by a different company,” says Ken Courtright, co-founder and chairman of the board. “We believe Kelley—with his experience and unique way of looking at things—will catapult us forward. We are proud of our growth thus far, and we wouldn’t change a thing, but we can’t wait to see what happens next.”
Kelley agrees. “We are just getting started,” he says. “Purchase power will continue to migrate from brick-and-mortar to online, and Income Store and our site partners are well-positioned to benefit from the ‘e-com’ explosion.” INCOMESTORE.COM
for couches on Craigslist and looking for them on Crate & Barrel. The company’s 100-plus authenticators scrutinize products in more than a dozen ways—including a smell test—to ensure their legitimacy. Fakes abound in the sneaker world, and the StockX tag of authenticity is so respected that the factories churning out fakes now make counterfeit “certified by StockX” tags as well.
StockX deals only with unworn sneakers, which means that a pair of Nikes purchased through StockX should arrive in their original box, as pristine as they’d be if purchased new from Foot Locker. Except that the craze around limited-edition sneakers has escalated to the point that it’s not easy to get them from Foot Locker or any traditional retailer. On release day, lines snake out of stores, and many of the people waiting are proxies for others, or flippers. For the sneaker companies, of course, that scarcity is intentional. As Luber puts it, “They understand that if they make one more pair, they might sell 10 fewer”—not to mention sacrifice all the hype. What Luber recognized was that, when supply is artificially low, retail price becomes arbitrary, since it’s not based on true supply-and-demand dynamics. “If a shoe that retails for $150 is worth $1,000 on our site, there’s no need for the concept of retail price,” Luber says. “There’s only market price.”
On the one hand, Luber’s concept is limited to working only in select product categories—“high-value, noncommodity goods,” in the words of University of California, Berkeley, economics professor Steve Tadelis. “It’s not scalable.” But the volume of merchandise being bought and sold on StockX shows no signs of slowing down. And having proved that the stock-market-of-things concept is at least viable, this past January the company began to experiment with an ingenious expansion: original products developed for and sold exclusively on StockX. Its first IPO (initial product offering), a pair of slides created by the celebrity jeweler Ben Baller, sold for between $181 and $260. StockX’s second IPO, three pairs of sneakers designed with Adidas, went on sale in October. “By 2021, it should be, every Monday, here are the five IPOs happening this week,” Luber says. These IPOs, he believes, are the future of e-commerce.
It was 2012 when Luber started noodling with the idea that would become StockX. After getting law and business degrees at Emory University, he’d started two companies—a Geek Squad–like service that he ended up selling and an online employee-management service that failed—and then landed a job with IBM in New York City. Not exactly the wingtipwearing corporate type, he started working on projects on the side. One of them was called Campless, an online Kelley Blue Book for sneakers that tracked resale prices on eBay. It was the first database of its kind, and as he built it up, emails and tweets from fellow data enthusiasts and sneakerheads poured in offering help. By 2015, Luber had amassed a volunteer army of website contributors. He would stay up until 4 a.m. working on Campless and report for duty at IBM five hours later.
He had no idea at the time, but he had a fan in a billionaire 600 miles away. Dan Gilbert, the Detroitbased co-founder of Quicken Loans and owner of the Cleveland Cavaliers, had noticed that his teenage sons were spending a lot of time on eBay, bidding on sneakers. He brought this up to Greg Schwartz, who founded a calendar app that Gilbert had invested in. “He started talking about the mechanics of stock markets—why they’re more efficient and powerful than auctions like eBay or consignment,” recalls Schwartz. “Then he said, ‘I think the first category could be sneakers.’ I thought he was joking.”
Gilbert eventually convinced Schwartz that the “stock market of things” could be a thing, and Schwartz convinced Gilbert that they needed a true sneakerhead at the helm. “There’s no way we can launch this if the person running the company is wearing loafers,” he told Gilbert.
Luber had talked with a lot of companies that wanted to use Campless’s data by the time Gilbert and Schwartz called, in March 2015. The conversations never went anywhere, and he braced himself for more of the same. But the morning after this call, Gilbert and Schwartz offered to fly him out to a Cavaliers game to continue the conversation. “I really didn’t think much of it,” Luber recalls. “But go to a game with the owner of the Cavs? Absolutely.”
Luber’s wife was 39 weeks pregnant. His plan was to fly to Cleveland in the morning, go to the 3 p.m. game, and fly back to New York that night. He brought with him a piece of paper laying out his grand vision for Campless, the same printout he’d brought to all of his previous meetings. It explained how a sneaker price guide could incentivize users to create sneaker portfolios, like stock portfolios, and the logic of establishing a stock market for sneakers. He showed it to Schwartz and Gilbert after the game. They stared back at him, dumbfounded. “We’ve got to get you to Detroit,” Schwartz said.
Luber texted his wife, “Please don’t go into labor.” He texted his boss at IBM, “Not showing up at work tomorrow, sorry.” One day bled into the next, and the trio still needed more time. Luber texted his wife again, “Please don’t kill me.” He wore the same clothes for three days. He got home at 1 a.m. on Tuesday night, his
Luber explained how a sneaker price guide could incentivize people to create sneaker portfolios, like stock portfolios. They stared back, dumbfounded.
wife waiting up for him. “Hey, I think we’re moving to Detroit,” he said.
She gave birth three days later. (“It was our second kid,” Luber says. “I don’t think I would’ve done it with our first.”) Gilbert and Schwartz acquired Campless within two months, and StockX launched in February 2016 with all three men as co-founders.
When you start a company and you have a billionaire co-founder, it changes a lot,” says Luber. (Gilbert, who is recovering from a stroke, was unable to comment for this story.) “Greg and I didn’t have to spend half of our lives out there fundraising. We could focus on the actual business.” Luber and Schwartz knew they were on to something that September, when Nike rereleased a popular pair of Air Jordan 1’s and the volume of products being sold through StockX went from 50 per day to 300.
The founders decided to seek outside investment in 2017. One of the people they approached was Scott Cutler, who was then the CEO of StubHub, the secondary market for tickets, and was already acting as an informal adviser to StockX. Back in 2016, the day StockX issued its first press release, Cutler had sent a LinkedIn message to Luber detailing his executive experience at StubHub, eBay, and NYSE. “I think this is a really big idea, and I’d love to help,” he wrote.
Luber saw the message and went straight to Schwartz. He was concerned because StubHub is owned by eBay, and they viewed eBay as their primary competition. “Is he a spy?” Luber asked. But Schwartz reasoned that a conversation with an undisputed expert in secondary markets couldn’t hurt, so Luber scheduled a video call. Luber and Cutler got along well enough that they arranged to meet the following week in Toronto. “It was casual. We were just getting to know each other,” Luber says. “I met his wife. I met one of his kids.”
Tall and trim, with close-cropped gray hair, Cutler looks like the type of guy who does triathlons for fun. His diplomatic and jargon-heavy way of speaking testifies to his years at corporate headquarters. He and Luber began talking on the phone every month, batting around ideas. “Every conversation was a deep one,” says Cutler. “It would go down tunnels: how limit orders work, how derivatives work, pools of liquidity, multichannel environments.” Luber would run ideas by Cutler. What should StockX’s second authentication center look like? How would a product IPO work?
In 2017, Cutler’s son interned at StockX. When Cutler went to visit him in Detroit, it was the first time he set