Kylie Jenner’s cosmetics business was recently included on the cover of Forbes magazine, the most significant business publication in America.
There was much debate regarding the claim the wealth of this woman was “self-made” (which was not the case). The more significant issue was the way in which this happened and the figures to explain it.
Jenner’s “Kylie Cosmetics” business has brought in the equivalent of $660 million in sales over its three-year existence and $330m in 2017.
The company is privately owned, which means that its numbers aren’t publically accessible. Even if the estimates were, in fact, 50 percent off, the numbers are staggering.
Furthermore, the “company” only has seven full-time employees. Everything from PR to packaging is outsourced. The only way Jenner attracts customers is through making use of her 110 million Instagram followers.
This article will discuss how this was accomplished.
Social Midas
The main reason for Jenner’s popularity is the 110 million fans on Instagram.
The company does not advertise beyond its website. It doesn’t own any stores or stockists and typically sells its goods directly to its users.
Although this might sound like a dream for a marketer, The most significant element was Jenner’s lips.
In 2017, just two years after she registered the trademark of her brand, tabloids all over the world began running reports about the size of these brands using fillers; she was able to double their size.
The main point here isn’t just about how she appears. However, it’s about how she took advantage of the curiosity… she had accidentally discovered one of the most significant “trends” that is sweeping the contemporary West women who are lusting after young, full lips.
To achieve this, she put 250k of her modeling money into lip kits that contained 15,000 lips; she created a website to sell them on the internet. They sold almost immediately out.
Although this was a fantastic movie, the next step was Jenner’s super-powerful mother – Kris Kardashian – bringing in Shopify in February of 2016 to transform Shopify into a fully-fledged online store.
After a few months after that, the company launched with six colors of lip kits – each of which was were sold out within a short time after the launch.
Exponential Growth
Although the store was successful immediately, what generated attention was its continued growth.
Instead of being a minor incident – where girls purchase the latest item because it’s trending – the company kept making buyers at a frantic rate.
This was possible due to the way it was set up. It’s an ideal “drop ship” operation. All of the product development and the sourcing was outsourced to a firm called Spatz cosmetics. They’re believed to have earned a profit of 180 million from the business.
This figure is what’s known as the COGS (Cost of Goods Sold) of the company; it’s a relatively unknown number that can allow us to determine the actual value of the products that have been developed.
It’s true that when it is financial matters, 99.9 percent of the population is usually incorrect. I’m not being disrespectful or anything; they’re just not educated or rational enough to look at the facts and not fall for the media hype.
Jenner’s “business” isn’t really a business. It’s a company for marketing that is a trader of the attention of.
As with everything “Kardashian,” the focus comes from a variety of sources, but it is all directed at the family. It is the matriarch who (Kris) is then able to turn the attention to money.
Unfortunately, many people have mistakenly equated Jenner’s attention with the worth in her enterprise. They’re mutually exclusive and, in the realm of investing, this has led to the “price” that Jenner’s influence as “overvalued” (people believe that Jenner’s pull is worth more than it really is).
In addition that she doesn’t run any “business” since all product development is outsourced. She also has a website that sells outsourced lip gloss, etc.
That means that if you’re really taking a look at what’s actually going on, you’ll need to be able to see what the actual business is and, ultimately, whether it’s viable (no).
Value and Worth
When it comes to the valuations of corporations, The most crucial thing to keep in mind is that nearly all of the population in the globe is in error about the ones that will be winners in the end.
While I’m certainly not an expert in the field, I’ve been around for long enough to know what businesses will be sunk or flounder.
In Jenner’s case, I can see flashes within the frame.
It is not able to provide much – or even no advantages over competitors and is mainly based on the persona of a false.
I believe that the majority of the purchases currently made (and sure, they’re huge in quantity) are mostly impulse purchases.
Teenagers who are curious and even women in their mid-twenties are purchasing the products for their promise to have a more attractive and fuller-looking pout. But, without costly filler injections, it’s just an idea.
My personal estimation would be that Jenner is probably worth about $20 million. The value of her “business” has a value of around one-fifth of the profits (which could be closer to $100 million than the $800 in revenue that Forbes reported in Forbes) And, therefore, it’s all a bit of an advertising gimmick.
Additionally, the real-time metrics of the many products sold by Jenner appear to suggest that the growth rate is slowing – only 7% in 2017 after a massive rise in the first year.
This is not meant to cast the blame on her achievements. However, to say that she is a “self-produced” successful story would be a mistake and can lead to an over-inflated of the sales figures. At a minimum, 50% of revenues are attributed to Spatz (who also works for L’Oreal). It’s my belief that they are the true winners of the whole.
