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The cosmetic empire of Kylie Jenner was recently featured on the cover of Forbes Magazine – America’s most prolific monthly magazine.

While claims have been debated that his fortune was “made” (which it wasn’t), the bigger question is how it actually happened – and the figures behind it.

Jenner’s Kylie Cosmetics business had an estimated $ 660 million in sales over its three-year life span, and in 2017 alone, it was $ 330 million.

Although the business is private and its numbers are not publicly available, even if these estimates are reduced by 50%, the figures would be astounding.

What’s more – the “company” has only 7 full-time employees. Everything from packaging to PR is exaggerated to work, and the only way Jenner is getting customers is by pulling her 110m followers on Instagram.

This article examines how it’s done.

Social Midas

At the core of Jenner’s success were the followers at 110 yards on Instagram.

The company does not advertise off-platform, has no store or warehouse, and generally only produces its products directly to its community.

While this sounds like a marketing wet dream, the most important element was Jenner’s lips.

In 2017, exactly two years after trademark registration for its brand, tabloids around the world began publishing reports of their size; with the help of fillers she was able to almost double their size.

The point is not in how she looks, but in how she seized interest … inadvertently she discovered one of the greatest “trends” in the modern West – women’s lust for youthful, full lips.

To that end, by investing $ 250,000 of his modeling money into 15,000 sets of lips, he set up a site to sell them online. They sold out almost immediately.

While this was a big step, the next process was Jenner’s almighty mother – Kris Kardashian – brought Shopify in February 2016 to make the business a fully-fledged ecommerce operation.

A few months later, the company started selling six lip shades, which sold out very quickly after launch.

Exponential growth

Although the trade succeeded immediately, what fueled its continued interest was its continued growth.

Instead of it being a small bite – where girls go and buy the latest product because it is trending – the business continued to create customers at an alarming rate.

This could be solved thanks to the way it was set up. It is a very important “drop”; overall product and source development was offset by a company called Spatz Cosmetics, which is estimated to have earned around 180m from the venture. USD.

This information represents the COGS (Cost of Goods Sold) of the business; a little known number that will help us determine the true value of what has been developed.

You see, when it comes to money, 99.9% of people are mostly wrong. I am not dishonest; they just aren’t experienced enough / level-headed to actually consider the facts of the chase.

Jenner’s “job” is not the real deal. It is a marketing company that trades attention.

Like all things “Kardashian”, this attention comes from multiple sources – but ALL is family-oriented. The matriarch (Chris) then turns that attention into money.

Unfortunately, many people have drawn Jenner’s attention to the value of her work. They are mutually exclusive, and in the world of investing, Jenner’s “price” of withdrawal has been “overrated” (people think it’s worth more than it actually is).

As mentioned, it does not have a “job” as all product creation is outsourced. He has a website that sells lip gloss, etc.

This means that if you really watch what is happening really further, you need to be able to consider what the job really is, and – ultimately – whether it can be held (not).

Value / value

When it comes to company valuations – the most important thing to consider is that almost the entire population of the world is to blame that will win in the long run.

And while I am not a wise man on this subject, I have long had enough time to know which companies will sink and swim.

In Jenner’s case, I see a flash in the pan.

It has very little – if any – competitive advantage, and is primarily built around a person who is a fake.

It is my opinion that most current purchases (and yes, they are huge in volume) are predominantly impulsive purchases.

Curious teens, and even women in their mid-twenties, buy products because of the promise of a richer and fuller body. But without expensive filler injections, this is just a dream.

My own estimate is that Jenner is probably worth ~ $ 20 million. His “business” is worth about 1/5 of the profit (which will likely cost $ 100 million more than $ 800 income reported by Forbes) and help with the whole thing just stinks of a marketing gimmick.

Furthermore – the actual metrics of the various products sold by Jenner indicate a slowing growth curve – only 7% in 2017 after a meteoric jump in its first year.

This does not put a shadow on his success. But labeling her “self-made” success story is wrong, as is inflating sales figures. With at least 50% of the proceeds going to Spatz (who also works for L’Oreal), I think they’re the real winners of everything.

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Source by Richard Peck

 

 

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