Transforming Ancient Beauty Rituals into Modern Success

0:00How can you create content where you would never know that you were marketing a product or pushing a product? it's just so natural and so organic the way this person is using the product that you become curious. Hey everyone, I'm your host, Shuang Esser Shan, and thank you for tuning in to Shopify Masters, your companion for starting and building a business. Ever tried waxing in a college dorm at midnight? Well, our guest did, and she turned that moment into a multi-million dollar beauty revolution. Aliyah Merendiz is the founder of Sugardough, and she took an ancient Middle Eastern hair removal method, sprinkled in some fun Gen Z marketing magic, and landed her products in more than 300 Ulta Beauty stores.

0:53Today, she's sharing the sweet and sometimes painful truth about scaling a brand in a category that's rapidly changing. Aaliyah, welcome to the show. Thank you. I'm so excited to chat. Yeah, very excited. Let's dive in. Like a lot of founders, your idea started from a personal need. Talk to us about sugaring and how you realized this process can actually be turned into a consumer product. Yeah. So sugaring is actually one of the most ancient hair removal methods that existed. A lot of people date it back to the time of Cleopatra. And so it's been around for a while, but for some reason, at least in the US, it's not a consumer-friendly product.

1:42It's normally just done at salons or you just make it at home in your pot. And so I was making it at home in my dorm room and had discovered it just from some DIY YouTube videos. And later in life realized my grandma used this form of hair removal method because she's Iranian. But I had just discovered it on my own. And I realized that it was super great for somebody like myself with sensitive skin, with coarse body hair, and somebody who traditional forms of hair removal didn't work as well. And I was really curious about bridging that gap between the DIY method, making it all messy on your stovetop, and the professional method because the waxing world had done that.

2:32So I was really interested in bridging that gap in the sugaring world. That's quite a large amount of white space. And to your point, it does feel very intimidating to do it yourself. And then also with salons, it feels more exclusive. The knowledge is maybe gatekept. So how did you navigate the manufacturing process? Because you have to take essentially a home recipe and actually scale it to mass production. Yeah. The manufacturing process was the hardest part for a product like this. Because as you can imagine, making really hot sugary substance for masks is incredibly different and difficult than most consumer and beauty products out there.

3:18So we're cooking our sugaring paste to 200 plus degrees Fahrenheit, which is one, very dangerous and two, very hard to cool down. And three, very hard to put into a container that doesn't just completely melt when you pour it in. I, like I said, started making it at home and I had my own recipe and formulation. And so it was a good six months of cold calling manufacturers or cold calling sugaring paste pro lines to see if they would manufacture my product. And it was back to back no's. Every time I'd pick up a phone, call someone, they'd be like, absolutely not. We don't want to have this sugaring paste in the consumer market.

4:03There was this gatekeeping that was happening in the professional world. And all the manufacturers were in the professional world. And so after months and months of calling some of these different manufacturers, I found one manufacturer that was willing to give me a shot and a chance and produce my product for the consumers. and that was my manufacturer that I had for the first three years of the business. So I started off with them. My first products that I sold when I launched my Shopify website was with them and they continued with us through mass retail, through Ulta Expansion. Well, so glad that they eventually said yes and you found this partner.

4:48This is a process that a lot of founders go through, taking something that might be artisanal, maybe a family recipe, and trying to scale it. What advice do you have as someone who's new and going through that process? Yes, it's important to be really stubborn with the outcome that you want. And I knew that in this space, the consistency was what was going to make or break our product if the consistency was good for beginners versus for the professional space. And so it was back and forth with manufacturers and it's beautiful and it's hard working remotely because there is that feedback delay and you can't give live advice for how you want your product to be made.

5:40And so it was just months and months of of not letting go and be like, no, this is not good. Sorry, can you remake it? Can you remake it? And that was all essential for this hero product that we have. Like this was our, Sugaring Paste is our core product, our hero product. And so I knew that if it was going to take time, that's okay. And if it was going to disappoint somebody or if a manufacturer wasn't willing to do those reps that was needed to get the perfect consistency, then they weren't the right manufacturer. Well, manufacturing, definitely the first big hurdle. And then the next step, you have to market your product, which I think comes or requires a lot of education because essentially is a new category almost.

6:27But I think what Sugar Dough does really well is you embody this big sister or best friend energy. So how did you approach this marketing stance and this brand identity? Yeah, it was very much an extension of myself, which was not strategic. It was more based off of my intuition, how to create this brand story. And I do come from a marketing and brand background. So I did know that in this brand, Sugar Dough, I wanted to make it as user-friendly and as warm and cozy as possible because this is hair removal. Everybody hates hair removal. And this is, not only hair removal, but ripping hair from your skin.

7:12People have a lot of baggage in waxing. They have a lot of horror stories and flip it. So it feels calm, comforting, friendly, sisterly, like you're just having a sleepover with a friend and you're sugaring together. And that was really important to get that ethos part of that brand story, besides the practical part where we're teaching people, but also like, what are we feeling when we're sugaring versus when we're using razors or waxing? And I, like I said, Sugar Dough was an extension of myself. I had been mentoring middle schoolers for 10 years prior to starting Sugar Dough, just some of the volunteer work that I really felt compelled to do.

7:58And in that volunteering, I knew that all these young youth needed was an example, somebody to be a friend to them, but also an advisor to them. And so I kind of used that mentality and translated it to my sugar dough brand as well. Not only are we a friend, but also we're an advisor, we're teaching you, but we're hand in hand in this process together. It's so cool to hear that you were able to extract experiences from marketing and also volunteering. So it's very cool to see the different facets of your life come together. One of the things I often also struggle with like content creation, and I think a lot of people have is balancing education and entertainment.

8:46How do you achieve that balance while you're trying to build this community and this loyal customer base? I feel like because of the product that I had, and this is where I think the product is really important. You can't just copy somebody else's content strategy. Sugaring is very entertaining to watch in general. You are pulling hairs from your body. There's a potential reaction component to it. The sugaring paste is this taffy-like goop that's caramely and golden. And so there's this ASMR element to it. And I knew that was in my favor. It's a very visual product. And so as long as I'm playing with that product, I'm emphasizing all the different motions and techniques I can do with the product, that was going to grab attention.

9:36And of course, if I had hair to show the before and after results. And so my product was the entertainment factor. Now I needed to bring the education element to it. And that combination was really great, especially in the heydays of TikTok when a lot of brands were going viral. People were curious about what was in my hand, what I was putting on my armpit to remove my body hair, and then also realizing that they were learning while they were tapping into that curiosity. I definitely got so many of those sugaring videos on my TikTok. And it's so satisfying to watch as well. Exactly. There's the satisfying element, which is, again, just part of the product itself that is important to lean into.

10:28And so we are entertainment. We are education. And a lot of the time, I think the best education is education that people don't know that they're actually learning from it. they're watching a video because they're sucked into that satisfying element or they're sucked into the noises, the ASMR element. And then at the end of the video, they're like, wait, I just learned how to sugar an armpit. That's awesome. Totally. It's quite impressive. You figured out manufacturing, you nailed down marketing, and then you also go on this retail journey where you are contacted by Urban Outfitters or also in Alta, as well as the Target Accelerator program.

11:10So talk to us about going through pitching and also developing those relationships. Yeah. So those relationships, the Target relationship started with the Accelerator programs and it was through the Target Accelerator program, ironically, that I got an interview with the buyer of Alta Beauty and then now in all Alta doors. So my advice, because it worked for me in the beginning years of forming Sugardough, is to apply to as many grants, accelerators, programs out there for entrepreneurs, and especially in my case, for a minority founder, for a woman founder as well. And when I was launching Sugar Dough in 2020, there was a lot of those programs that were emerging.

12:03And there still is from an effect of 2020 and everything that was going on socially, politically as well. And so I never had to reach out or cold email a buyer because I made sure in all those accelerator programs, I introduced myself to the speaker. I contacted them afterwards. I got coffee with one of the program managers. that was a network that I knew that I was very lucky to be in. And I was going to squeeze as much juice as I can from those programs and from those opportunities. There was also people in the accelerator programs that I was in that didn't speak, that were on mute, that didn't have their camera on.

12:49And I know they kind of faded away in the background and didn't stand out to some of the people in these calls that were decision makers. Yeah. It's important to, I think, also just experience that program in all it's offering. But to your point, this is also a springboard that could lead to so many other relationships. So you've got to make the most of that experience. Yeah. And also I had no connections to the manufacturing space, to the beauty space, to the CPG space. I was brand new because I kind of tripped and stumbled into starting Sugar Dough. So I was brand new to this industry. And so that's why it was really important when you're new to network.

13:40And I know people sometimes hate the word networking, but it really is how you get what you want, how you get funding, how you get connections and introductions to retailers. And if you're not in those conversations, then these trends, this momentum is going to move on without you. A lot of people with ideas, sometimes when they look at established consumer packaged goods, they feel really intimidated because, you know, there's a giant monopoly that owns a slew of brands that dominate retail. I guess, like, how were you thinking about that when you were entering this whole new industry, like you said, without any connections or experience?

14:23Yes. Everything I do is very grassroots. And then I figure out the logistics first. So the grassroots effort here was, okay, sugar dough went viral. I was posting on TikTok and one day, it was January 8th of 2021. I was getting five orders that day. And the next day I got 500 from one TikTok video. The next day was 400 orders. Next day was 450. And so I was definitely building the plane while flying it too. And that also came with a lot of growing pains, like you said, with learning how to scale and how to launch. with the CPG space, which is very capital intensive, you have to make sure that your margins are exceptional, and especially if you're going into retail.

15:22And so luckily with organic social, if you've experienced going viral, you're going to have some great cost per acquisition costs. Very, very low, if anything. It was after those viral years that I had to learn from my peers, this is something that I wish in hindsight I could have been better at, which is just the financials of the business and the operations of the business. But later I had to learn, okay, we have to either increase our products pricing, or we have to decrease our cost of goods because to be able to be in retail and be sustainable and be profitable, those need to be hand in hand.

16:11And my biggest regret is not doing the CFO services in-house and learning it myself or having somebody on my team to be running the financials. Instead, we hired fractional CFOs, which every time we hired a fractional CFO, they weren't involved enough in the business to make a difference or to see the hurdles that were coming up. And so I think if you are starting a business and you don't know about finances and operations, that first hire should be really strong in finances and operations if you are not strong in them yourself. Well, the problem you mentioned about either increasing the price or lowering your cost is so important.

17:03And believe it or not, in my past life, I used to be a pricing analyst. And one of the topics we don't talk enough is like finding the right balance in pricing. So how did you solve that problem? Great question. And in the beginning of starting business in my first year, I was always asking, why is everyone so secretive about their margins and about their pricing and about their cost of goods? And it just made it really hard to figure out what sugar dough needed to scale. and in full transparency, our margins were around 60 % when I first started the business. And so our cost of goods were around 40 % of the price that we sold on our D2C.

17:51Later, when we went into Ulta Beauty, we learned that margins need to be around 85, 90%, which feels a little bit like you're gouging the customer. At least that's what it felt like when I heard these margins and these numbers. But this is also why people are kind of secretive about the behind the scenes of their numbers. And we didn't have those margins also because, like I said, manufacturing was so difficult. And so the CFOs that we hired, the fractional CFOs that we hired in the beginning of the business, also didn't give us that transparency that we needed. those hard conversations that, hey, maybe you're not ready for retail or you need to wait till your margins are at this amount in order to make it to retail.

18:42They just saw a snapshot of our books and were like, okay, you're good. But we needed to see what a full year of business could look like with our current margins, with the marketing fees, with paying for content creators, for brand awareness with paying for legal fees that pop up. We've had an annoying amount of legal fees pop up in the last four years. So that is why when the company came to a point where I was deciding, do I continue with Sugar Dough because this financial situation is so heavy, it's so hard, or do I push food or invest some of our own money into it? That's when my husband came on board as our CFO and was like, hey, let's invest our own money.

19:28We've always wanted to invest in a business. We believe in sugar dough, so let's have sugar dough be this business that we invest in. But I'm going to be managing the money because I don't trust other people who are not in it as deeply as we are. And since my husband joined a CFO, somebody who's just intimately involved with all the inner workings of the business, we've made much fewer mistakes. And we've been able to forecast more accurately, which forecasting was just such an issue, trying to get accurate forecasts with CFOs or budgets with fractional CFOs. And so if I could redo it again, I'd have somebody like my husband from the beginning, from the first order, if I could.

20:16Because my domain expertise is brand and marketing, I needed a counterbalance that was really strong and in the business that was operations and finance. Because finances lays the foundation for the rest of your business. And when you're talking about scaling and growing, you also had to grow your team. And I think it's very interesting because you hired a lot of close friends and family. I guess, yeah, talk to us why it was so important to work closely with people that you know and you trusted? A lot of business owners that have grown their company from scratch talk about community. And I wanna double click into what community actually means because that can be a very general, vague turn.

21:01Oh, like we depend on our community. We rely on our community. We couldn't do this without our community. But what is your community? And for me, it was my sisters, my mom, my neighbor, my friends, my neighbor's kids who helped me pack orders. I felt so strongly about Sugargoe that I was not afraid of yelling it, screaming it out into the world. I was super excited to share it with friends. And that is your community that you get started with. I think, especially in this day and age, it is difficult to start a company and just run cold ads to it. There has to be some sort of like some essence in there, which is normally that immediate circle around you.

21:43So my immediate circle were neighbors, were friends, was my husband, my sister. So my sisters were models for the first few campaigns that we did. I had friends that I did their, I sugared their legs and their armpits. And those were our first few videos on TikTok and Instagram. My neighbor would come over and help pack orders for me when I was packing orders in my garage. My dad would help with the operations of the business. So everything was literally my people, my community. And I trusted them and I knew that they had my back as well and they weren't going to try to screw me over. They just saw the vision and wanted to be part of that growth.

22:34And that's important. And that's the benefit of especially initially working with friends and family when you don't have the budget to hire other people is that they're working because they want to support you, not necessarily to gouge you of money. And so that was super helpful in those beginning phases of running the business. Having that support system is so important. And I really love this topic because a lot of interviews we do, their founders are life partners or their siblings or their friends, which kind of goes against the typical thinking that you can't really be close with business partners.

23:15Yeah, I think I want to zoom into that a lot more because people sometimes feel like you can't balance professionalism with friendships or other relationships. Do you have a vice there when you are working with family or friends? Yeah. And I've done both. I've worked with family. I've worked with friends. I still work with family and I still work with friends. And I also had to sever relationships with friends, luckily not family, but with friends that I worked with because there was expectations were different on each end. And I had to learn that the hard way. Like in the very beginning, there was a friend that was helping me with a lot of the operations of the business.

24:01And it was all very organic because everything came to us. All these orders came to us so quickly. And because of that, we didn't have conversations for where she saw herself in the business, where I saw her in the business. And that relationship had to end pretty quickly because we knew we were in different worlds in terms of what we expected from each other in the relationship. Because of that, I learned the valuable lesson of over-communicating. And you have to over-communicate with friends if you plan on continuing a relationship with them, if that work relationship ends. So I work with my husband, I work with a cousin, I work with a friend and all these relationships, the team that we have right now is actually all people that reached out to us because they saw the vision of Sugar Dough or they saw how I run the business, they saw the brand and they felt something when they saw the brand and wanted to be a part of it.

25:03And those have been the best hires that we've had instead of, and we've hired in both ways. We've hired in, you know, LinkedIn posts and cold calling different people from different companies to see if they're interested in joining Sugar Dough. But it's the people that have reached out to us and said, oh, I've seen what you've done with Sugar Dough. I love what you're doing. Is there any way you're hiring? Those people have stayed on the team for the longest because when you're so scrappy and starting a business. You need people that are in there, that just see the vision and will do the work and can see all sides of the business and not just have one hat on.

25:49That hasn't worked for us. So with working with friends and family, in summary, you need to have that excitement from them that they see the vision of the company. And two, you need to set expectations from the very beginning. What happens if you become dissatisfied in your job? What happens if we need to fire you? What are those conversations going to look like from the very beginning, even before you hire them? You know, they have to see the bigger picture, but also to your point, like you got to lay out all of the expectations and have those conversations ahead of time. I also think it's, There's so much you're managing, right?

26:29Those relationships you have with people who work with you, but you're also doing it as you're scaling where there's just new challenges every day that you haven't faced before. How are you managing this growth period where things are happening so fast? Pivoting constantly, to answer simply. when you grow so fast one and then also have limited resources there is no time to really test for three months for six months if something is working out it needs to hit pretty immediately and and down the line as my business grows there there will be a time where it's very it's more stable. We can more easily predict sales from all our revenue channels.

27:25And we can do a little bit more testing and our company goes into a little bit more of maintenance mode, but we are in growth mode. And so everybody on our team has had multiple different roles. At one point, they were a social media manager, then they were a sales lead, then they were customer service and they're okay with doing all those different elements and okay with maybe the title looking different or maybe being like below what they expected and then being above what they expected. So we have an extremely flexible team and that is required for extreme growth. And one of those moments of extreme growth or a moment that helped you to get even more attention is being featured on Shark Tank.

28:18Talk to us about that experience and also how you're maintaining the momentum after. Yeah. With Shark Tank, there's so much that goes on behind the scenes. There's so much that goes unaired that it's really interesting to see what is what does end up airing because you really don't know what angle the producers want to take. And so I had just had a baby when Shark Tank had reached out that they wanted to have me on the show. And it was hundreds of hours of work for the six minutes that they showed my segment. Crazy. It's crazy. It's very fun. It was actually very kind of coming back into work from having the baby, it was good to just be, to be able to pitch my company in a way that was very succinct, that was very clear.

29:19I had to have a good hard look at the numbers because I knew like these numbers were going to be shown to the world. And that process of creating my pitch and creating the scene, We have to design the whole scene with the product and the pictures and buy the posters. That's the founders in charge of creating all of that. And so that was a creative process for me that was really, really fun to do postpartum while I was getting back into work. The day of was very, felt very high stakes because it was very high stakes. You want to get a deal. You want to be able to get your story out. you want the sharks to see your vision.

30:04And at the end of the taping, I felt like I didn't get any of those things. I just felt, you know, like deflated and upset with my performance. And I couldn't share anything about the customers or about my personal journey or the impact that we're making that we're not just this viral TikTok brand that we're adding this new category in the hair removal space and the impact that can have that wasn't shared. And so when I got off of the set, I just felt like, oh man, like all those hundreds of hours of work and working through feeding a baby and postpartum, everything was just like, oh, that all went down the drain.

30:44But then we did hear a couple of weeks before it aired that we were going to air. So, you know, the excitement picked back up again. And although I knew that the result wasn't what I wanted from the sharks. And, but that it was the, again, back to my, my community and literally like, what is my community? My mom reaching out to me afterwards and be like, I'm so proud of you. Like that was from, cause she saw the behind the scenes. She was like, you could not tell like everything that you were going through from the segment that was aired and friends reaching out being like, I'm so proud of you.

31:22Like I would invest in you. Like that was the best part of the whole Shark Tank experience. There, there was a bump in sales, not as huge as we expected because we have gone so viral in the past. So it was like, okay, that was, that was equivalent of a, like a half a million view TikTok video. Like that's a nice bump. And there's this extra exposure that we get from people that we are normally not exposed to. But it was really just the validation from the people that are using the product where I was like, I can never let go of this company because I know that people will be buying sugar dough products for the rest of their life.