Advice Line with Marcia Kilgore of Beauty Pie (June 2025)

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2:42Hey everyone, it's Guy here. So this week we're giving our team a short break and bringing you an episode from the archives. Last June, serial entrepreneur Marcia Kilgore joined me right here on The Advice Line, and she offered some pretty great insights to three early-stage founders about managing uncertainty and risk in their businesses. And stick around because at the end, we'll have an update about all three of our callers. So enjoy this episode, and we'll be back next week with a brand new episode of How I Built This Advice Line. Hello, and welcome to The Advice Line on How I Built This Lab.

3:16I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at hibt at id.wondery.com and make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter.

3:56It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at gyros.com. And we'll put all this info in the podcast description. All right, let's get to it. Joining me this week is serial entrepreneur Marcia Kilgore, founder of Beauty Pie. Marcia, welcome back to the show. Thank you so much for having me. I'm excited. We're excited to have you. So you were first on the show back in 2018. You told us about the origin story of Bliss, which was the spa brand that really kind of changed the beauty landscape. And then, of course, you went on to build all of these different brands afterwards, like Soap and Glory and Fit Flop and then Beauty Pie.

4:38It's just so awesome to have you back. And we will put a link to your original interview in the episode description. And also anybody listening can easily find that by searching how I built this in Marcia Kilgore. Lots of great stories and insights. Marcia, I know that today you are continuing to grow Beauty Pie and pushing to kind of give consumers access to luxury beauty products at a more transparent pricing. And I know recently you've been focused on educating consumers about something called warehouse pricing. So can you tell us a little bit more about what that is? Well, there are different definitions for it in the US versus the UK.

5:16The mainstream beauty industry has always had a really multi-layer distribution system where it would go from the mind of a founder to a manufacturer. The manufacturer would then ship it to a warehouse. The warehouse would ship it to a distributor. The distributor would then ship it to a retailer. And in all of these different layers of distribution, you would end up with a markup of 1 ,200 % at minimum on that product. So something that is manufactured for$5 would retail for$60 at minimum because the retailer themselves are taking at least half of that. And especially if you're a new brand in the cosmetics business, it can be really tough because they will demand higher percentages of that pie because they have the shelf space and you don't really have much negotiating leverage.

6:03and I'd been in the beauty industry for quite a long time and realized that for me it was a little depressing that customers would have to spend so much to get something that actually didn't have the value that they thought it had and so I decided to start beauty pie just for that reason so that people could get the good stuff when it landed in the warehouse with enough of a markup to cover that which we call our warehouse pricing or lab to warehouse pricing and not any other markup that happens after it leaves that warehouse and ends up in the hands of a distributor or a retailer. So that's our definition of warehouse pricing.

6:37Right, because most of the high-end luxury beauty brands are made in Switzerland or in Japan, some in France, and you are offering the same quality essentially, but at much lower prices. Very often even a better quality, but at much lower prices. We can manufacture from scratch. We can kind of dream because we're not really worried about all that extra added cost that a product will engender once it leaves the warehouse and goes to a retailer. So we negotiate hard with our manufacturers, but it stops at about three times the manufactured cost. And it doesn't go farther than that. Whereas most beauty products go to 10 or 12 or sometimes 20.

7:19Wow. I mean, the kind of the more luxurious the brand, the crazier the price is. And you'll see creams out there selling for$3 ,000 for a 50-milliliter jar of cream, which is just insanity. There's nothing in them. But if it makes you feel better about yourself that you can buy something really expensive, I guess there's a little bit of that. Yeah. All right, Marcia, before we get to today's callers, I want to ask a little bit more about your story and kind of how it relates to building a company today. Because in your original episode, you know, you told us about how you started by giving facials in this tiny room in New York City and how that kind of led to and taught you what customers value.

8:00And that helped you build bliss into this amazing brand. Do you think that's necessary today for founders to have that direct kind of customer service or hands-on experience to succeed in beauty? It's a great question. I think Jim Collins would always say that you want to focus on what you're good at. And then you want to look at those tangential things to try and do something different. So it is much easier to start a business in an area that you've got expertise because you can solve your problems very often yourself. And you've got that deep and rich insight into whatever that problem is. However, if you just go and do what everybody else is doing, you're not going to have anything new and you're not going to have any kind of leg up in the market with all the other people who are doing exactly that.

8:41So it's really important, I think, one, to have expertise in the area that you are trying to build, but then also to look sideways and see what people are doing in other areas of business that might dovetail into yours and create something that's really fresh and new. What do you think? I mean, you've built so many brands and building a brand is really hard and arguably harder in some ways today than ever, you know, than it's been in recent years. What do you think are some of the biggest challenges of trying to build a brand in 2025? In 2025, there is more competition than ever. And I think that people also look at the internet and think it's super easy to put your product out there on the internet and spend money advertising it and people will flock to you.

9:28I think what they don't necessarily realize is, number one, how hard it is to get visibility and any kind of scale. Number two, how many iterations you might have to go through before you get something that resonates with a customer. Number three, how expensive that can be, depending on which market you're in and which niche you're in. because there are a lot of people thinking exactly like you're thinking. And I think that everything has moved towards digital in such a fast way. COVID did that for us, right? It was this huge digital rush. So it used to be quite easy to throw a website up, and it still is.

10:04But getting people to come to that website is the hardest thing. So I think there's always, always on the part of a founder, a little bit of ownership bias, where because they think it's great that other people will naturally show up. And maybe they don't realize how hard it is to get attention in such a saturated world of, you know, trying to get eyeballs, you have to do a lot more, be constantly creative. And there's a lot of help out there now with AI, which can help you be more creative if you're not necessarily creative, but everybody's got a lot of the same tools. So you have to work smarter, you have to work faster, you have to work harder, but you have to really be original.

10:45Yeah. Marcia, let's go ahead and take some calls. Let's bring our first caller. Hello, welcome to the advice line. You are on with Marcia Kilgore. Please tell us your name and where you're calling from and just a little bit about your business. Guy, Marcia, what an honor it is to be here. Very excited. My name is Victor Garcia. I am calling from the very hot city of Fort Worth, Texas, co-founder of Sol Dias Ice Cream. We specialize in making ice cream and paletas with the flavors and preparation styles of my hometown, Mixtica Can Jalisco. And we are on a mission of making these treats as popular and accessible as tacos are in the U.S.

11:26today. Awesome. So tell us a little bit about paletas or popsicles, basically, right? Yeah. And ice cream. So tell us a little bit about what, yeah, what about what you sell? So the two things that really helps us stand out, number one, as I mentioned, the flavors, the ingredients. So we've got things like mango chamoy or like a rice cinnamon. We have a tequila ice cream, tequila paletas, mamey, the flavors of Mexico, right? And our churn process is very slow. It takes 25, 35 minutes to make a batch. And really that just helps the natural flavors of the product get injected into what the ice cream is or what the paleta is.

12:12A lot of American ice cream or a lot of ice cream in general, right, it gets injected with air and blasted frozen six, seven minutes. So one of the big things I tell people just you can have a pint of regular ice cream and you can have a pint of Sol Dias. and you will be able to feel the difference. The Sol D.S. is going to be a lot heavier because it's got a lot less air. So that's kind of a little bit about us and what we do. And how did you get into the ice cream business? The tiny town that I mentioned, Mextillacan, Jalisco, is nicknamed La Cuna del Helado y la Paleta, which just briefly translates to the birthplace of ice cream and paletas.

12:52And so that's kind of where everything came from. We immigrated to the U.S., didn't quite find the same flavors of home, and that's kind of what encouraged the business to start. And so you've got a brick-and-mortar shop, or you've got more than one shop? We've got three brick-and-mortar shops in Dallas-Fort Worth. Wow, amazing. Congrats. And tell me a little bit about how the business is doing. The business has been growing steadily 35 % to 40 % a year. Everything's been going well so far. All right. So what's your question for us? Yes. So we have brick and mortar side of the business and then we have a retail side of the business.

13:32We've been trying to tackle both. The nagging question is, is that too much? At our stage, right now, three stores,$1.5 million in revenue. Does it make sense to continue trying to go after both? Should we focus on one or the other? So do you focus on selling your products in retail or do you focus on brick and mortar? Okay. Marcia, let me bring you in. He's got a growing business, a brick and mortar business with ambitions, I think, right, to grow. But you've got these products that you could sell in stores, Sam's Clubs and maybe Costco's and other places. What should he do? What should he focus on?

14:13Victor, what a dream to be selling ice cream. Yes. I think many of us would want to have a business like yours. It sounds really exciting. It sounds like you have a really great market niche also. And so congratulations, building it so far. And it sounds like you really have a lot of success and more to come. I'm going to ask you a couple of questions, though. I'm just going to fire them away at you. Can you tell me right now how the revenue is split between your stores and your wholesale? Right now, it's 60 % stores, 40 % wholesale. And in terms of margin on stores versus margin on wholesale, once you take the stores and the operations into account?

14:53It's about 17 % the net margins on the stores. Net margins on wholesale is slightly higher, hovering at around 20. Okay, so relatively the same, but easier to scale. Obviously, you're wholesale, isn't it? Retail is tough, as you may not know yet. I know. I know, trust me. You know, you've got weather, you know, a big football game comes on, like no one leaves their house. You know, you're sort of at the mercy of a lot of different elements. However, retail is really great for marketing for your brand. So it's nice to be able to have those flagship retail locations where people can come and experience it and test product, et cetera, et cetera.

15:37How are you guys doing on social media? Are you getting a lot of information out to potential clients or doing a lot of promotion via organic social media or not yet? That's the only way that we advertise. It's really just social media, word of mouth. Like you mentioned earlier, is the product good enough to live without any advertising? And I immediately thought, well, we sometimes don't post for a month and things continue to go well. But yeah. Okay. Okay, and can you tell me what percentage of your product is frozen or needs to be kept cold when shipped versus not? Because you have other things, right?

16:12You have other products that it's not just ice cream and palatas. Correct, correct. That's like, those are our hero products, but we also make a variety of other Mexican sweets and treats, churros, aguas frescas, dulces enchilados, like spicy gummies. on the storefronts it's probably about 70 percent is frozen 30 percent is not frozen on the retail side we just have two products in stores which is going to be the paletas and the spicy gummies and right now it's really about half is paletas half is is spicy gummies i thought spicy gummies might be popular as soon as you said it i just thought you know what there's something about spicy gummies like a jalapeno or some kind of like hot pepper gummies yeah yeah i can see every teenage boy if you had the one that's so crazy that it burns your mouth do you know every teenage boy would be buying those yes i know because i have teenage boys the extreme version absolutely yeah you gotta have that obviously in your distribution in your wholesale you're going to want to try and get more of those non-frozen products in because it's just so much cheaper to not have to ship something in refrigerated trucks and also really build a couple of hero products like those spicy gummies.

17:30If that's like something you're really known for that you can then kind of branch off of and develop more products like the spicy gummy or it's the spicy chewier, the spicy whatever, whatever. But you want to have one big hero products. And of course, you'll have your ice cream, right? And you'll have your paletas, but something is not frozen. It'll be a lot easier to not worry about that, especially in heat waves, et cetera, et cetera. I'm sure it can get kind of crazy. When you talk about retail stores, I don't think you need 20 of them. I think you need a couple of really good ones strategically located where there is a line out the door.

18:05Nothing is better for your business than a line out the door of people waiting for ice cream, right? And then where I would spend money, instead of doing two stores or four stores, you now have three. So instead of doing six, Hire some really great brand designer who knows how to bring that all together for you so that when you have a store, it is irresistible and people cannot not take a photograph and post it on social media. You're going to have them with their ice creams, them with their paletas, them with their spicy gummies, whatever it is. And you're going to run events in those stores like the spicy gummy eating contest, right?

18:46and you're going to invite people to come or you're going to invite people you're trying out a new flavor everybody come down or giving out little cups of this new flavor come down and see what it's like and they'll come in they're going to take a picture of themselves in the store they're going to come in to try the new flavor they're going to post about it talk about it on social media everything will be free for you for a very long time if you can have events around the products that you're launching or your hero products and make that store look so cool yeah okay But you get a line down the street.

19:17Then you take photos of the lines down the street from your shop. And then everybody's like, oh, my God, why is everybody lining up with that? It's really quite easy with what you've got. We can do it. If you do the branding right around it, and then you just keep coming up with ideas around how to get people to come in and be part of your brand. It's great advice. Victor Garcia, the brand is called Sol Diaz. Good luck. Thanks for calling in. Thank you so much, Guy. Marcia. All right. Thank you. Take care. Guy, I talk too much. I'm sorry. No, it's great. You are carrying the day as I'm battling a cold and a pretty severe migraine.

19:51Oh, my gosh. You are helping to carry the advice line today, so I appreciate that. Anytime. We're going to take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raz. Stick around. You're listening to the advice line on how I built this lab.

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23:50Welcome back to the advice line on how I built this lab. I'm Guy Raz and my guest today is Marcia Kilgore. She's the founder of many successful brands, including Bliss, Soap and Glory, Fit Flop, and Beauty Pie. And we are taking your calls. And let's bring in our next caller. Hi, Guy. Hi, Marcia. My name is Lydia Welsh. I'm calling from Seattle, Washington. And I'm the founder of Clear Story Skin Care. We make small batch botanical skincare products using science-backed ingredients for a simple, effective daily routine. Awesome. Welcome to the show, Lydia. How did you get into skincare? Tell me a little bit about how you started the business?

24:26Yeah, I majored in biology, then I worked in disease research for a few years after college. And I've always been interested in skincare, but somehow it didn't hit me that skincare is actually all about chemistry and biology until 2020, had some free time, and I started reading research papers about different ingredients, and it all just sort of came together in my mind. So I started tinkering with different ingredients and making my own formulas, sharing them with family and friends. And then I launched my business in 2021. And tell us a little bit about what you're, yeah, I mean, how it's going so far.

25:02It's been an interesting and slow journey. I've been around for, you know, four years, but the first two years of that I was working full time. And then the following two years, I had two kids. So I've had my hands full. I've basically, I started with a few simple products and just did a lot of like farmer's markets and things on the weekend and shipping orders in the evenings. And right now we have a gentle cleanser, a hydrating mist and a couple of facial oils. And we have like a small customer base, but the people who have used our products really love them. Tell us a little bit about what you are, where you're selling is all direct to consumer online on your website now.

25:51Yeah, that's right. So everything's direct to consumer. And tell us what your question is or what your challenge is. So I've spent this time refining my product line, and I feel like I'm finally ready to grow my business. But I find myself holding back from pitching and marketing because I'm afraid to fail. And so my question is, how do I overcome my fear of rejection and gain the confidence to put myself out there? All right. Marcy, I want to bring you in with some answers, hopefully. Oh, Lydia, okay. I'm going to tell you something that might really shock you. Everybody has fear of failure. Everybody.

26:28So welcome to the club. Never goes away. Like anything else, you just kind of get used to it after you fail a couple of times. So you kind of have to let that go. It's almost like people who tell me, oh, I can't do this because I'm a perfectionist, so I just can't decide. And it's just a cop-out. No offense. but it's a cop-out to say you have fear of failure or you're a perfectionist because it just gives you an excuse to not go do what you have to do to get this done and also not to face the things that aren't working openly honestly and immediately and move on them right it's like so easy to just go oh i'm too scared to fail so i'm just not going to do anything you know what's going to happen you're going to fail so anything if you want to just say you have a fear of failure and let it give you paralysis because it's a sure thing.