Money

How Kylie Jenner turned her $29 lipstick business into a $420 million empire in 18 months

Kylie Jenner, the youngest member of the Kardashian-Jenner family, may only be 20 years old. But she could be the most successful of all the sisters, including older half-sister Kim Kardashian West.

In fact, WWD recently announced that what began as an online business selling lipstick for $29 each has earned Jenner's makeup company Kylie Cosmetics $420 million in sales in only 18 months. It is projected to rake in $1 billion in lifetime sales by 2022, according to WWD.

Jenner's most successful launch to date was her 2016 holiday collection release on November 21, when the company made nearly $19 million that day, according to documentation provided to WWD.

For comparison, Kardashian West's first product launch from her new makeup brand KKW Beauty earned $14.4 million in sales, Forbes estimates.

But Jenner says she isn't too concerned about competition with her sister, who she initially collaborated with for Kylie Cosmetics before spinning off on her own. She told WWD that she reaches a different demographic than Kardashian West.

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"She's like almost 20 years older than me. I feel like my makeup is definitely more young, fun. And it's just different," Jenner said.

Jenner launched her beauty brand on November 30, 2015 with the $29 Kylie Lip Kit (a liquid lipstick with a matching lip pencil), which immediately sold out. Within six weeks of the first release, Jenner her mom and manager Kris Jenner decided to partner with their current manufacturer, Seed Beauty.

"I want to be as big as the other [cosmetic] brands. It's my dream to be on Forbes," Jenner told Complex Magazine in a 2016 interview.

This year, Jenner became the youngest celebrity on Forbes 100 — a list of the 100 top-paid celebrities in the world — having earned $41 million over the past year, Forbes reports. Kardashian West, 36, also earned a spot on the list with earnings of $45.5 million.

Forbes 100 places Jenner among other young notable names including Chance The Rapper, Justin Bieber and Taylor Swift.

Jenner's inspiration for the line came from her early obsession with YouTube makeup tutorials as a tween and her desire to have fuller-looking lips, she explained on her new reality show "Life of Kylie."

"I've always known that but I don't feel like I realized the extent of it until I launched my own makeup line," Jenner said on "Life of Kylie."

The popularity behind Jenner's products also stems from the limited number of products she makes available during each launch, which almost inevitably sell out each time. Amidst rumors that Seed Beauty and Kylie Cosmetics are faking scarcity, Vanity Fair reached out to Seed Beauty co-founder Laura Nelson for clarity.

"We are running the factory 24-7 to meet demand," Nelson told Vanity Fair. "It's truly as much as we can make."

For perspective, WWD reported that it took Estée Lauder Cos. Inc.-owned Tom Ford Beauty 10 years to earn $500 million, it took 25 years for Bobbi Brown to hit $1 billion in earnings in 2016 and it took L'Oréal's Lancôme 80 years to reach the $1 billion mark in 2015.

These are all brands shelling out costs for brick-and-mortar stores. While makeup stores are generally thriving, this isn't a cost Kylie Cosmetics has to consider. Aside from pop-up stores planned for Chicago and Houston, Jenner's products are only sold online.

Kylie Cosmetics's 2017 sales are projected to come in at $386 million, according to WWD. Since its launch, the brand has expanded its makeup range to eyeshadows, blushes, highlighters and brushes. A bundle of these products priced at up to $325.

The social media star says she didn't always think she would be a businesswoman. She told Complex Magazine that "businesswoman" wasn't a "respectable" title growing up.

Today, Jenner is not only the founder and CEO of Kylie Cosmetics, but she also holds the titles "chief marketing officer" and "chief creative officer," which makes sense given her 97.4 million followers on Instagram, 22.8 million followers on Twitter and she has the most viewed Snapchat account as of August 2016. Meanwhile, Kris Jenner is the company's chief financial officer.

"She's 19 years old and she's just scratching the surface," Kris Jenner told WWD in an interview before Kylie's birthday. "She's creating a business for herself that hopefully will last the rest of her life."

Kylie Jenner was even named one of Time Magazine's most influential teens of 2016 and told the publication that she's been most inspired by older sister, Kim.

"She's so dedicated, she's so smart, she's such a businesswoman and she's always doing something and thinking of new ideas," Jenner said about Kardashian West. "She has inspired me to have a great work ethic."

As the daughter of famed Olympian Caitlyn Jenner and a subject on reality television since "Keeping Up With the Kardashians" which first premiered 10 years ago, Jenner said she has faced bullying. As a result, she wants to be a good role model for the next generation.

The entrepreneur hopes her legacy will show that her success "wasn't just getting [her] lips done and having good hair, but being a good person and inspiring other people to not bully other people and do good things and be nice to everybody," she told Time.

In the past year, Jenner has made a couple of half-million dollar donations to organizations through sales on Kylie Cosmetics.

She donated $459,000 to Smile Train, an organization for children with clefts, and $500,000 TO Teen Cancer America.

Aside from Kylie Cosmetics, Jenner also earns money from her paid app, merchandise sold exclusively through her online store "The Kylie Shop," two apparel lines with sister Kendall Jenner, a book series and partnerships with retail brands like Puma and Quay Australia.

"I really do feel like people don't take me seriously as a business woman because of my age and my reputation," Jenner said on "Life of Kylie." "But I feel like they're starting to. I like to prove people wrong."

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