Introduction
How many of you love make-up and related items? As we develop and broaden our mindsets, we realize that make-up has no gender. Make-up, being gender fluid, is appreciated by many people. Whether you have to attend a party or a business meeting, make-up has become a part of our essential livelihood. But have you ever wondered how make-up companies make profits? Let’s know How does IPSY make money?
Just consider an example. A company X produces its make-up products. It knows the cost of production. So the company will ensure that the product will be priced higher than the cost of production. Profit is the cost of production subtracted from the price of the product. Hence the company makes a profit and generates revenue.
Now that we know how independent companies make profits let us see how dependent companies make profits. How do they make money? These companies often give out subscription boxes for their customers. Do you know any company that gives out subscription boxes? IPSY is one such company that gives out subscription boxes.
This article will help you understand how IPSY makes money. Continue to read the article to know more.
IPSY and its history
Have you heard about IPSY? IPSY was a cosmetics company started by Michelle Phan with a vision to build globally accessible make-up products. The company does not make its products. Instead, it gives out monthly make-up trial packages according to the customer’s preference. They get products from other companies (products that need customer feedback), and IPSY would circulate the products among their customers. The companies do not charge IPSY, but they expect feedback from the customers.
IPSY and its marketing team
But how does IPSY let the public know that there is a subscription box available? To spread the news about upcoming schemes and products, IPSY has hired a marketing team. Do you know who works for IPSY as their marketing team? IPSY’s marketing consists of various influencers and vloggers from different social media platforms. The company does not pay them for promoting their make-up packages. Not paying the marketing team has advantages for many companies.
For example, even Kylie Jenner uses Instagram’s posts and stories to inform people about her new products. Instead, they allow them free access to the studio and make-up packages without subscription and so on. Now you know how the company has reduced its expenditure on marketing.
IPSY and subscription packages
The next question some of you may have been how does a subscription package lead to enormous growth in the company’s revenue? The company lets out subscription packages for its consumers. Once it has decided that it has enough inputs on a particular type of subscription package, they either amend it accordingly or sell it in a market. The second thing about subscription packages is that they are the best way to increase the company’s revenues. How? Continue reading to find out.
Working of subscription packages
- IPSY does not pay money when the company decides to give its products for public approval. However, IPSY charges the consumers before they can access the trial make-up items.
- By asking their customers to pay before they use the subscription packs, IPSY makes a profit.
- With each subscription package costing around $12, the number of customers who want the product is increasing. After some basic math, we would have arrived at an approximate number that turns out to be their profit for that fiscal year.
Key features of the working of subscription packages
- Firstly, providing good durable, high-end products which consumers might prefer.
- Second, it needs to meet the orders and requirements of the people it is selling the subscription packages to.
- Third, it needs to find the right delivery partner.
- Fourth last but not least, it needs to maintain good relations with the company that provides them the make-up items.
Has IPSY fulfilled all of these items? Yes, it has.
So, what is the process that IPSY follows now? Any company shipping out subscription packages will follow the following methods.
- First, contact the company that is providing the make-up items and then secure certain items.
- Next, the company would get in touch with its trusted shipping partner and secure packages there.
- Simultaneously, the company would ask its marketing team to spread knowledge about the upcoming packages and gather information.
- After all the steps are completed, the company will start shipping out the products and generate huge profits.
Frequently Asked Questions (FAQs)
- Is making money that simple for IPSY? Is there no other way for IPSY to increase its revenue?
Making money for IPSY is not easy. Maintaining good relations with make-up producing companies is very difficult and needs to be done delicately. Plus, influencers are people who are already being paid by the social media they use. Sometimes, it is nearly impossible for IPSY to convince people to become a part of its marketing team. No one would want free make-up testing items over money. That is why it becomes important for IPSY to give its marketing team some special focus. There may be other ways IPSY can make money. For example, it can start making its make-up products and selling them. Making their make-up products might increase revenue for them. Otherwise, the company can also venture into another field like clothing and so on.
- Is there any extra tip which the company might be working on?
Yes! Companies always have their secrets, and that is how they compete with each other. However, if you are planning to start subscription boxes for your company, here is a pro-tip. Getting a good fulfillment partner is very important as they not only help you in shipping your goods, but they also help you in creating custom packages and buying orders, and shipping packages all at a very minimal cost. So, if you ever think about starting subscription boxes, remember that they are the best way to increase profits.
- If I am an influencer, can I start working for IPSY?
IPSY will have to go through your work and ensure that it is unique. There are also many other requirements that you will have to fulfill before you become a marketing assistant for IPSY. They post all their job opportunities at myglam.com, and you can check the site for more information.
- What is the expansion of IPSY?
IPSY does not have an expansion. Michelle Phan named the company IPSY when she started it. She was initially a blogger. Later Michelle Phan left the company. She said that she left the company because she had a brighter vision, and that was to unite the world with make-up items.
