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While there are approximately a zillion (more or less) beauty brands, there are considerably fewer labs and manufacturers that produce the actual products. Multiple brands often use the same labs, and this goes across price points, too. For example, L’Oréal owns Giorgio Armani, so it’s not a coincidence that Armani’s Maestro foundation is very similar to L’Oréal’s Magic Nude Liquid Powder makeup. Better additives in the higher-end product cost a few extra cents, but result in many times the mark-up of the drugstore versions, as does the fancy designer name.
Marcia Kilgore, the beauty industry vet who founded and subsequently sold both Bliss and Soap & Glory, is back at it again with a beauty company called Beauty Pie that aims to take the ridiculous mark-up and the middle man out of the buying process.
“What if you made it possible for women to feel like they were getting a backstage pass to the best cosmetic suppliers in the world?” Kilgore said she thought two years ago when the idea for Beauty Pie came to her. She went to about 17 of her favorite suppliers (which all make products for name brands) in Italy, the US, Korea, Switzerland, and elsewhere armed with benchmarks from best-in-category products and had versions whipped up under the Beauty Pie label.
Here’s the interesting part: While the lipsticks on offer, for example, would normally retail for $25 based on the quality and ingredients, Beauty Pie is offering them for $2.39, which is exactly the amount Kilgore pays for one from the manufacturer. When you click on the product, you’ll see an itemized list of costs. For example, one lipstick costs $2.08 to make and package, $0.10 for safety testing, and $0.21 for warehousing. Kilgore said that for a brighter lipstick that needs more pigment, it might cost $0.17 more. She’s doing collaborations with makeup artists and dermatologists, which will add $0.10 on to the cost. Packaging is lightweight, which is both cheaper and more eco-friendly.
Kilgore said she was inspired by the transparency model of Everlane. The big question here, though: How the heck does Beauty Pie make money? This is the part that has inspired Kilgore to call Beauty Pie “the Netflix of beauty.” You can go to Beauty Pie and buy any of the products at retail, or you can buy a $10 monthly subscription. After you subscribe, you can then buy all the products at cost. (There is a company called From the Lab that does something similar with skincare, but without a subscription. There, you pay more than cost but much less than retail for products.)
With Beauty Pie, you’re limited to buying the equivalent of $100 in retail cost per month. So that means you can buy four lipsticks that retail for $25 per month, but you’ll be paying the two-dollar price for each. Kilgore says she was concerned that people would buy 100 at a time and open up their own eBay shops. But if you don’t shop one month, that credit will roll over the next month and accrue. You can purchase month-to-month memberships, though the first time you sign up you have to buy three months. If you choose to purchase a full year membership, you’ll receive a big bag of welcome products.
There are currently 135 products available, ranging from $1.62 for an eyeliner marker to $5.38 for a foundation that looks and feels remarkably like Armani’s Luminous Silk. The matte lipstick is one of the creamiest and most comfortable formulas I’ve tried in a while, too. Eyeshadows are coming soon, and starting in January 2017, new products will be added every week. Kilgore says to expect 350 products to roll out in 2017, including skincare.
You’re probably identifying a few issues with this sales model. Let’s hash them out. The monthly $10 fee is essentially the mark-up here. If you buy four lipsticks in a month, you have to mentally add $2.50 on to the price, which puts them at about $5 each instead of a bit over $2. Still inexpensive, yes. If you only buy the foundation, it will cost you $15 instead of $5. But again, that’s cheaper than $40. You are also on the hook for shipping, which costs about $8, according to Kilgore. While that’s not any higher than other beauty retailers, she acknowledges it could look weird to buy a $3 product but spend $8 on shipping. You have to buy into the big picture, which is that she hopes you will recognize you’re getting high-quality products for dirt cheap.
People love branding, so it could be an uphill battle. People also love things that are good but not expensive, so I could see this model working, especially if she’s able to build buzz in the reviews and in places like Reddit that can launch products into the stratosphere.
Time will tell if it’s successful, but for Kilgore, it’s a fun venture. “For us, the fun is sourcing and creating the product,” she says. “Creating the fairytale is the part I want to do.”