As a founder, I spend a lot of time looking at numbers. Lately, those numbers have been telling a fascinating story, one that connects our small business to a decades-old economic theory.
Over the past 30 days, something incredible happened at Basics By B. Our four shades of 'The Best Lip Stain Ever' didn't just sell well; they completely took over. They claimed the top four spots in our top 10 selling SKUs, becoming our best sellers by a long shot.
This surge in sales got me thinking. When I speak with other business owners, especially those with higher average order values (AOV), the conversation is often much more somber. Many are complaining about a noticeable decline in sales. We are all operating in the same challenging environment: fuel prices are higher than ever, interest rates keep creeping up, and the cost of living is squeezing everyone's budgets.
So, why are our lip stains flying off the shelves while bigger-ticket items are stalling? It brings to mind a famous economic concept: the Lipstick Index.
The Lipstick Index is a term coined in 2001 by Leonard Lauder, the chairman of Estée Lauder. Following the economic shock of the September 11 attacks, Lauder noticed a curious trend: while the broader economy was struggling, his company's lipstick sales were actually rising [1].
The theory behind the Lipstick Index is simple but profound. When facing an economic crisis or financial uncertainty, consumers are less likely to buy expensive luxury goods like designer handbags, expensive dresses, or high-end electronics. However, the desire to treat oneself doesn't disappear. Instead, consumers pivot to smaller, more affordable luxuries like a premium lipstick [1]. It's a small indulgence that provides a psychological boost without breaking the bank.
Is the Lipstick Index Still Relevant Today?
In recent years, economists and beauty industry insiders have debated whether the Lipstick Index still holds true. Some argue that the theory is outdated. During the late-2000s recession, for example, lipstick sales actually fell, challenging Lauder's original claim [1].
More recently, in 2024 and 2025, the beauty industry saw mixed results. Major conglomerates reported slowing growth, leading some to declare the "End of the Lipstick Index." The argument is that today's consumers, squeezed by inflation and high interest rates, are cutting back on all non-essentials, even the small ones. Furthermore, the definition of a "small luxury" has evolved; during the pandemic, we saw the rise of the "nail polish index" and the "mascara index" as consumer habits shifted [1].
However, others argue the index is simply evolving. As Mandy Fields, CFO of e.l.f. Beauty, recently noted, while the labor market might be stagnant and consumers are being more "choiceful with their dollars," they are still spending on beauty they are just prioritizing value [2].
The "Best Lip Stain Ever" Effect
This brings me back to Basics By B and our current best sellers. I believe what we are seeing is the modern evolution of the Lipstick Index in action.
Our brand has always strived to be aspirational but relatable. We want to offer products that make you feel amazing, without the guilt of a massive price tag. When economic pressures mount, when filling up your gas tank feels like a luxury in itself, dropping hundreds of dollars on a new outfit or a spa day might be out of the question.
But treating yourself to 'The Best Lip Stain Ever'? That is an accessible joy. It's a small, daily confidence boost. It's a pop of color that lasts all day, making you feel put-together even when the world feels chaotic.
It shows that even when times are tough, we still find ways to prioritize self-care and find moments of joy.
So, is the Lipstick Index kicking in? The data on my desk certainly suggests it is. While the economic landscape remains uncertain, one thing is clear: the power of a great lip product to lift our spirits is as strong as ever.
Thank you to everyone who has supported Basics By B and made 'the best lip stain ever' such a phenomenal success. Here's to finding the little luxuries that make every day a bit brighter.
References
[1] Lipstick effect - Wikipedia
[2] E.l.f. Beauty CFO says the lipstick index is alive and well - CFO Brew
