business

Mass market cosmetics brand e.l.f.’s USD 3 lipstick defies inflation

Mass market cosmetics brand e.l.f.’s USD 3 lipstick defies inflation

e.l.f. Beauty Inc., known for selling affordable but stylish makeup in stores, has reportedly hiked prices and introduced higher-end goods this spring, especially because the rapidly growing expenses have endangered its profitability.

The unique selling proposition for this beauty brand was its USD 3 lipstick, which remains one of its best-selling products even in such turbulent situations.

CEO Tarang Amin claimed that he was sure that the cost of e.l.f.’s cheapest items would remain stable despite rising inflation. He further commented that the prices of its popular products like mascara, eyelash curlers, and lipsticks that cost only a few dollars, remain untouched.

The U.S. inflation rate is at a four-decade high, and one of the most challenging issues that CEOs face today is pricing, especially in the consumer products sector, where even slightest price increase can cause consumers to switch to competitors' goods.

Cosmetics from e.l.f., which stands for eyes, lips, and face, are typically less expensive than those from departmental and specialty stores like Sephora. According to Mr. Amin, the inexpensive options bring in new customers, and anyone having a limited budget, the company tries to lure to e.l.f.

He also quoted that the Oakland-based company intends to continue with the strategy even if inflation doesn't decrease. The firm, which outsources manufacturing to vendors in China, claims that even its cheapest products generate a profit.

It is worth noting that as one of the few significant mass-market cosmetics businesses with a loyalty program, e.l.f., made the uncommon decision to inform customers directly about price increases through an Instagram post in March, stating that it would be raising prices on the majority of its products by USD 1, due to escalating costs.

Even though the lipstick is only USD 3, the business has been able to cover additional costs by surging the prices of other items, and by introducing higher-end products such as a three-piece hydration package for USD 34, which is considered expensive by e.l.f. standards.

Source Credit:

 https://www.wsj.com/articles/the-3-lipstick-that-ignores-inflation-11663639487?mod=business_lead_pos5

About the author

Rashi Thakkar

Rashi Thakkar

Rashi started her journey in content when she was completing her MBA. Since then, she has helped well-known startups and businesses boost their online presence. Currently Rashi pens downs insightful articles for AlpenHornNews and various other websites, covering an array of sectors from finance and business to technology and healthcare.