After six year’s of work producing hundreds of makeup tutorials on YouTube, with each video generating anywhere from thousands to more than 1 million views, influencer Lisa Jauregui decided it was time to launch her own makeup brand.
Jauregi and her husband Paul Jauregui co-founded BK Beauty in April 2019. The duo started with a line of cosmetic brushes and later expanded into other makeup, such as eye shadows.
“It was just a runaway success,” Paul Jauregui says. “We were able to cross the seven-figure mark in terms of sales within the first year.”
The business was successful that Paul Jauregui quit his full-time job in March 2020 to handle operations, while Lisa Jauregui continued as CEO and managed the product side of the business.
“We’re a husband-wife team, but there is a clear line of delineation and responsibilities that fall on my desk and on her desk,” Paul Jauregui says. “She handles the product, the content, she’s the face of the company, she engages with the community and pushes the brand forward and basically lays the tracks ahead of us as the train starts to roll. And my job is making sure the train continues to run as we scale over time.”
Now in its second year, BK Beauty is on track to grow sales more than 200% year over year, Paul Jauregui says. Overall, the cosmetic’s brand atypical start helped propel its swift growth, he says.
From a hobby to a full-time YouTube channel business
Lisa Jauregui started doing makeup tutorials on YouTube in 2014 as a creative outlet while working as a cosmetics trainer for MAC Cosmetics. As a trainer, she would travel around the country to train MAC sales consultants about MAC products.
After three years of producing the videos as a hobby, Lisa Jauregui realized she could monetize her channel—much like other beauty bloggers were doing at the time—by using affiliate links. This means that when Lisa Jaruegui used or recommended a product in a video, she would include a link to purchase that product. That link would have a tracking code unique to her, and she would earn a commission if a viewer clicked on it and went on to make a purchase.
Very quickly, Lisa Jaruegui decided that with the money she was bringing in, she could quit her day job and make a living producing videos for her YouTube channel full time. She left her job at MAC in 2017 to grow her YouTube audience and produce videos. While she was able to live off of running the affiliate makeup blog, Lisa Jaruegui discovered that over the years she had acquired several valuable assets to run her own business—a following and access to their purchasing behavior.
“Two years ago, we started connecting the dots and looking into the data specifically around her affiliates’ sites—we have access to the data—and understanding the purchasing behavior of the audience,” Paul Jauregui says. “We had already done the hard part. She’s already built an audience and built a pathway for distribution, essentially working with brands to sell products and earn a commission. So what if we developed our own brand and our own products to this audience?”
After a year working to develop products, a brand and an ecommerce site, the duo launched BKBeauty.com in April 2019.
The path for growing an ecommerce business
BK Beauty generated more than $1 million in sales in its first year and is on track to reach $5 million in its second year, Paul Jauregui says. To keep up with the brand’s swift pace of growth, Paul Jauregui joined BK Beauty full time last year to manage operations.
Not knowing much about ecommerce, Paul Jauregui started attending webinars from third-party logistics (3PL) provider ShipBob Inc. A 3PL handles fulfillment operations on behalf of merchants, such as warehousing and shipping. Some webinars were about fulfillment, but many were about ecommerce in general and often featured ecommerce founders as speakers who told their growth stories.
Paul Jauregui liked that the events were interactive with the audience, and he was able to ask a lot of questions and learn from the speakers. This is exactly what ShipBob intended, and in March 2020 it switched its digital events platform to Livestorm, which emphasizes audience engagement, says Casey Armstrong, chief marketing officer at ShipBob.
For example, during an event, instead of using a full-screen video and a small box for questions, half of the screen is a video and the other half is a chat box where the audience can ask a question and see everyone else’s questions. If attendees see a lot of people asking questions, and the questions are answered, they are more likely to participate, Armstrong says. Now, digital events have upwards of 50 questions per session, whereas previously events only generated two or three, Armstrong says. Audience engagement is key for event return rates, he says. Now, 30-50% of its event attendees attend another event, compared with a 15% return rate on its previous platform, Armstrong says.
Paul Jauregui was one of those repeat attendees and question askers. After he attended a few webinars, ShipBob invited Paul Jauregui “up on stage” during a webinar to share his story with the group. During another event, he also had the opportunity to do a mock funding pitch to Kirsten Green, founding partner at venture capital firm Forerunner Ventures, which has invested in several ecommerce starlets including Warby Parker (No. 129 in the 2020 Digital Commerce 360 Top 1000), Bonobos (acquired by Walmart Inc., No. 3), Glossier Inc. (No. 349), Away (No. 273) and M. Gemi (No. 294). Green asked questions and provided feedback on his pitch. Paul Jauregui described it as a once-in-a-lifetime opportunity.
ShipBob hosts the webinars to increase its brand awareness by bringing people together from the ecommerce industry, offering educational tools for small and medium-sized businesses, and using them as a customer acquisition tool, Armstrong says. While Paul Jauregui has benefited from the series, BK Beauty is not a ShipBob customer now. But he is considering them.
Right now, BK Beauty handles all of its fulfillment in-house, but Paul Jauregui knows a 3PL can easily scale up fulfillment operations more than he can alone, especially as BK Beauty’s sales grow. For example, when a new product launches, BK Beauty is typically slammed with orders, and Paul Jauregui often has to work all weekend to fulfill them. A 3PL would be able to handle this volatility of orders. He is currently evaluating storage fees, pick and pack fees at a few 3PLs, he says
Right now, growth is BK Beauty’s main goal. The brand now wants to start paid using advertisements on social media or with influencers, to help drive more sales.
Lisa Jaruegui continues to produce videos for her YouTube channel where she recommends other products to her following of more than 10,000 subscribers. But, she is always using one of BK Beauty’s brushes to apply her makeup.
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