YouTube star Michelle Phan's Ipsy startup hits 1M paid members

The Internet makeup guru's service, which mails pouches of beauty samples to $10-a-month subscribers, will ship a milestone 1 million of the "glam bags" next month.

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The 1 million milestone for Michelle Phan's Ipsy subscription commerce company puts the company on an annual sales rate of $120 million. Getty

Ipsy, the beauty-sample startup of YouTube star Michelle Phan, isn't itsy anymore.

Next month, Ipsy will mail 1 million so-called glam bags, Phan said in an interview. The bags, which include large samples of beauty products tailored to a recipient's tastes, are the main draw for subscribers of the $10-a-month service.

Phan is one of the best-known figures to spring from a class of YouTube celebrities: people who get their start posting self-made videos on Google's massive video site and who generate enough of a following to evolve into multifaceted brands. In Phan's case, her brand includes her mainstay online video beauty tutorials, a L'Oreal makeup line, a book of cosmetics tips, a spokesperson gig with Lancome and a music label, in addition to Ipsy.

The growth of Ipsy underscores the economic power of this new crop of stars, who evoke passionate devotion from their young fan base but still remain relatively anonymous to most people in their 30s and older.

Ipsy's milestone translates to a revenue rate of $120 million in annual sales. It also means that Ipsy, which routinely puts aspiring customers on a wait list, gained 300,000 members in the last six months. It took the company about three years to reach 700,000 subscribers in October. Ipsy launched in late 2011.

"Our mission was to build a new beauty business, where there's not a one-size-fits-all beauty look," Phan said. "We didn't do any traditional marketing or PR -- it's all been word of mouth."

By comparison, Birchbox -- another paid subscription commerce company that mails out packs of beauty samples -- has more than 800,000 members after launching in September 2010. Birchbox uses its monthly sample mailings as a tool to entice shoppers into purchasing through its online store.

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