Younique

Last updated
Younique
Company typePrivate
Industry Cosmetics, network marketing
FoundedSeptember 2012
FoundersDerek Maxfield, Melanie Huscroft
Headquarters
Lehi, Utah
,
United States
Area served
 United States, Canada, Australia, New Zealand, United Kingdom, Mexico, Germany, France, Spain, Hong Kong, Italy, Ireland, Portugal, Belgium, Austria, Colombia and Netherlands
ProductsCosmetics
Website www.younique.com

Younique is an American Pyramid Scheme that markets beauty products. [1] The company was founded in 2012 by Derek Maxfield, who is CEO, and Melanie Huscroft, and is headquartered in Lehi, Utah. [2] [3] Between 2017 and 2019, Younique was 60% owned by Coty, Inc. In 2019, Coty sold their share of the business back to Maxfield and Huscroft. [4] [5]

Contents

Business model

Younique produces cosmetics that are marketed by its "presenters," who sign up via the website and purchase products they sell, earning a commission. Younique sellers are required to continuously purchase products to maintain their status within their company, regardless of whether they are able to sell these products onward. [1] Like other multi-level marketing companies, Younique sellers are encouraged to recruit other people to become presenters. [6] The company uses social media to market their products and sales representatives use their social networks to promote and sell their products, and host virtual parties. [7] Commissions begin at 20%, and increase to 25% as sellers reach $1000 in total sales. [8] Further increases are only possible if they recruit others as sellers, [9] from whose sales they receive additional commission. In 2019, The Guardian described Younique's business practices, alongside those of other MLMs, as akin to pyramid schemes, reporting that many Younique presenters lost money in the process of selling for the company. [1]

The company's business model has been compared to other direct sales companies such as Avon Products and Mary Kay, though with a larger focus on sales via social media. As of December 2017, Younique had 230,000 sellers.[ citation needed ] Digiday attributed the company's quick growth to its reliance on digital selling, compared to other MLM brands' reliance on in person sales; [9] The Wall Street Journal also reported that founder Maxfield's use of his personal story, involving his Mormon faith and experience of surviving leukemia, was another tactic used for recruiting salespeople that differentiated Younique from other MLMs. [10]

Products

Younique's product line includes makeup products for eyes, lips, and faces. [11] Younique also has products for skin care, including Younique Royalty which launched in 2016, and is geared towards anti-aging. [12] In 2019, Younique launched Moodstruck Epic 4D One-Step Fiber Mascara that sold 1 million units within 6 months. [13] The same year, Younique launched an augmented reality tool that allows buyers to virtually try products before purchasing. [14]

In August, 2019, Younique agreed to pay $3.25 million to resolve claims that they deceptively marketed their Moodstruck 3D Fiber Lashes mascara as consisting of “100% Natural Green Tea Fibers.” [15]

Ownership

Younique was majority owned by Coty, Inc. between 2017 and 2019. Coty purchased a 60% stake in Younique for $600 million in January 2017. [16] This acquisition valued Younique at $1 billion. [17] Younique's founders continue to own 40% of the company. [3] [18] The acquisition increased Coty's profits in 2018, with Younique witnessing double-digit sales growth in its second quarter. [9] However, Younique's revenues and profits declined year-over-year in 2019, and Coty announced that it was cutting ties with Younique in August 2019 and sold back its stake to Younique founders. [19]

Related Research Articles

Maybelline New York, trading as and commonly known as Maybelline, is an American multinational cosmetics, skin care, perfume, and personal care company, based in New York City. It was founded in Chicago in 1914, and has been a subsidiary of French cosmetics company L'Oréal since 1996.

Avon Products, Inc. is an Anglo-American multinational company selling cosmetics, skin care, perfume, and personal care products. It is a multi-level marketing company based in London. In 2020, Avon had annual sales of $9.1 billion worldwide.

Max Factor is a line of cosmetics from Coty, founded in 1909 as Max Factor & Company by Maksymilian Faktorowicz.

Mary Kay Inc. is an American privately owned multi-level marketing company. Mary Kay is based in Addison, Texas. The company was founded by Mary Kay Ash in 1963. Richard Rogers, Ash's son, is the chairman, and Ryan Rogers, Ash's grandson, was named CEO in 2022.

<span class="mw-page-title-main">Clairol</span> Brand of hair care products

Clairol is the American personal care-product division of company Wella, specializing in hair coloring and hair care. Clairol was founded in 1931 by Americans Joan Gelb and her husband Lawrence M. Gelb, with business partner and lifelong friend James Romeo, after discovering hair-coloring preparations while traveling in France. The company became popular in its home country, the United States, for its "Miss Clairol" home hair-coloring kit introduced in 1956. By 1959, Clairol was considered the leading company in the U.S. hair-coloring industry. In 2004, Clairol registered annual sales of US$1.6 billion from the sale of its hair-care products. As of 2014, Clairol manufactures hair-coloring products sold under the brand names "Natural Instincts", "Nice 'n Easy", and "Perfect Lights".

<span class="mw-page-title-main">Olay</span> American skin care brand owned by Procter & Gamble

Olay or Olaz, previously Oil of Olay, Oil of Olaz, Oil of Ulan, or Oil of Ulay, is an American skin care brand owned by Procter & Gamble. For the 2009 fiscal year, which ended on June 30, Olay accounted for an estimated $2.8 billion of P&G's revenue.

<span class="mw-page-title-main">Shiseido</span> Japanese cosmetics producer

Shiseido Company, Limited is a Japanese multinational cosmetic company founded in Tokyo, Japan in 1872. Its product categories consist of: skin care, makeup, body care, hair care, and fragrances. The company is one of the oldest cosmetic companies in the world and celebrated its 150th anniversary in 2022. It is the largest cosmetic firm in Japan and the fifth largest cosmetic company in the world. In Japan, Shiseido is available at cosmetic counters at selected department stores and most pharmacies. The company owns numerous brands and subsidiaries worldwide, in addition to its founding label. The company is headquartered in Tokyo, and is traded on the Tokyo Stock Exchange, where it is a constituent of the Nikkei 225 and TOPIX Large70 indices.

<span class="mw-page-title-main">Coty</span> French American beauty company

Coty Inc. is an American multinational beauty company founded in 1904 by François Coty. With its subsidiaries, it develops, manufactures, markets, and distributes fragrances, cosmetics, skin care, nail care, and both professional and retail hair care products. Coty owns around 40 brands as of 2024.

<span class="mw-page-title-main">Lush (company)</span> British cosmetics company

Lush Retail Ltd. is a British cosmetics retailer which is headquartered in Poole, Dorset, United Kingdom. It was founded in 1995 by trichologist Mark Constantine, his wife Mo Constantine and five other founders.

CoverGirl is an American cosmetics brand founded in Maryland, United States, by the Noxzema Chemical Company. It was acquired by Procter & Gamble in 1989, and later acquired by Coty, Inc. in 2016. The Noxell Company advertised this cosmetics line by allowing "cover girls", models, actresses, and singers who appear on the front cover of women's magazines, to wear its products. CoverGirl primarily provides a wide variety of consumer-grade cosmetics.

Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial and sometimes illegal marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling the company's products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.

OPI Products, branded as O·P·I, is an American nail polish manufacturer headquartered in Calabasas, California and a subsidiary of Wella Company

e.l.f. American cosmetics brand

e.l.f. Beauty, Inc. is an American cosmetics brand based in Oakland, California. It was founded by Joseph Shamah and Scott Vincent Borba in 2004. Items include bath and skin-care products, mineral-based makeup, professional tools, eyeliners, lipstick, glosses, blushes, bronzers, brushes, and mascara, among others.

Market America is a multi-level marketing company founded in 1992 by JR and Loren Ridinger. Headquartered in Greensboro, North Carolina, the company employed around 800 people as of 2016. The products offered by the company include household cleaning supplies, jewelry, personal care products, auto care, cosmetics, dietary supplements, custom websites, water purifiers, and weight management products. A 2017 lawsuit accused the company of being an illegal pyramid scheme.

<span class="mw-page-title-main">Cosmetic industry</span> Industry that manufactures and distributes cosmetic products

The cosmetic industry describes the industry that manufactures and distributes cosmetic products. These include colour cosmetics, like foundation and mascara, skincare such as moisturisers and cleansers, haircare such as shampoos, conditioners and hair colours, and toiletries such as bubble bath and soap. The manufacturing industry is dominated by a small number of multinational corporations that originated in the early 20th century, but the distribution and sale of cosmetics is spread among a wide range of different businesses. Cosmetics must be safe when customers use them in accordance with the label's instructions or in the conventional or expected manner. One measure a producer may take to guarantee the safety of a cosmetic product is product testing. FDA occasionally does testing as part of its research program or when looking into potential safety issues with a product. Both the cosmetics business and consumers can benefit from the FDA's resources on product testing.

Kylie Cosmetics, LLC is an American cosmetics company founded by Kylie Jenner. The company began selling Kylie Lip Kits, a liquid lipstick and lip liner set, on November 30, 2015. Formerly known as Lip Kit by Kylie, the company was renamed Kylie Cosmetics in 2016.

<span class="mw-page-title-main">Milk Makeup</span>

Milk Makeup is a New York City-based cosmetics and skin care company created by the founders of Milk Studios. Despite its name, it is 100% vegan.

<span class="mw-page-title-main">Tropic Skincare</span> British skincare company

Tropic Skincare is a British online and multi-level marketing company which sells skincare and cosmetic products. The company is based in Croydon, South London. The business is owned by The Apprentice series 7 contestant Susie Ma.

Pure Romance was a United States-based multi-level marketing company that sells adult products including sex toys. In May of 2023, the company announced it was moving away from the MLM model to become essentially a retail business.

Longrich(Chinese: 隆力奇; pinyin: Lónglìqí:)Bioscience Co., Limited is a multinational company that sells health, organic food, nutritional supplements, beauty, home care and pet care products. Longrich operates under its holding company Jowell Global.

References

  1. 1 2 3 Tait, Amelia (June 1, 2019). "'They have you in a cultish grip': the women losing thousands to online beauty schemes". The Guardian. Retrieved 2019-08-21.
  2. ↑ Christensen, Lisa (May 14, 2015). "Younique Breaks Ground on New Facility". Utah Business. Retrieved 2019-08-21.
  3. 1 2 Safdar, Khadeeja; Terlep, Sharon (January 10, 2017). "Coty Buys Younique, Valuing Cosmetics Startup at $1B – update". Dow Jones Institutional News.
  4. ↑ Terlep, Sharon; Thomas, Patrick (2019-08-28). "Coty Ends Partnership With Younique". WSJ. Retrieved 2022-10-03.
  5. ↑ Collins, Allison (2017-01-10). "Coty Buys Into Social Selling Beauty Company Younique". WWD. Retrieved 2022-10-03.
  6. ↑ Del Valle, Gaby (October 4, 2018). "YouTube is full of MLM resignation videos — but some are sales pitches for new companies". Vox. Retrieved 2019-08-21.
  7. ↑ US, FashionNetwork com. "Direct sales beauty brand Younique branches out to Asia". FashionNetwork.com. Retrieved 2022-10-19.
  8. ↑ Faull, Jennifer (May 9, 2019). "'We are in a de-hype phase': Coty rethinks Younique strategy as brand struggles to make sales". The Drum. Retrieved 2019-08-21.
  9. 1 2 3 Schiffer, Jessica (February 20, 2018). "Coty's investment in peer-to-peer beauty brand Younique is paying off". Digiday. Retrieved 2019-08-21.
  10. ↑ Terlep, Sharon; Thomas, Patrick (August 28, 2019). "Coty Ends Partnership With Younique". The Wall Street Journal. Retrieved January 11, 2020.
  11. ↑ Leiva, Courtney (21 November 2019). "Younique's Black Friday Blowout Starts With a Twist on Two Top-Sellers: EXCLUSIVE". StyleCaster. Retrieved 26 September 2020.
  12. ↑ "Younique Just Dropped Some Really Big Launches". NewBeauty. 20 October 2016. Retrieved 26 September 2020.
  13. ↑ "Younique's Next-Gen Fiber Mascara Ships Over 1 MIllion Units". Beauty Packaging. 22 Nov 2019. Retrieved 26 September 2020.
  14. ↑ "Younique Launches AR Tool". HAPPI. 9 Aug 2019. Retrieved 26 September 2020.
  15. ↑ Actions, Top Class (2019-10-31). "Younique Moodstruck Fiber Lashes Class Action Settlement". Top Class Actions. Retrieved 2024-07-09.
  16. ↑ Collins, Allison (January 10, 2017). "Coty Buys Into Social Selling Beauty Company Younique". Women's Wear Daily. Retrieved 2019-08-21.
  17. ↑ Safdar, Khadeeja (January 10, 2017). "Coty Buys Younique, Valuing Cosmetics Startup at $1 Billion". The Wall Street Journal. Retrieved 2019-08-21.
  18. ↑ "Coty completes Younique deal, reports Q2 results". Financial News. March 1, 2017.
  19. ↑ Gupta, Ruchi (2021-10-15). "Is Younique Going Out of Business? Not Yet, Despite Challenges". Market Realist. Retrieved 2022-11-21.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.