e.l.f. Cosmetics: Joey Shamah. The Dollar Store Formula That Built a Cosmetics Giant
June 29, 2026
AI Summary
5 min readIn September 2006, Joey Shamah answered the phone at his cosmetics company and a stranger asked, "Is it true you're being bought by Bloomingdale's?" Shamah had no idea what she was talking about. But an email chain letter was spreading that claimed e.l.f. Cosmetics was being acquired and prices were going up. Panicked customers flooded the website with orders. Within weeks, the company went from 300 orders a week to 18,000 orders a day. Shamah flew to China, called his father from a hotel elevator, and said he didn't know what to do. His father told him: "This is it. You either figure this out, or we pack up and go home."
The Dollar Store Problem
When Shamah and his original partner Scott Vincent Borba started e.l.f. in 2004, the premise was simple: make cosmetics that looked and felt like prestige brands but sold for one dollar. The target channel was dollar stores like Family Dollar and Dollar General, which were growing rapidly but lacked consistent, branded merchandise. The problem was that the dollar store buyers kept saying no. They were "committed to quantity over quality" and worried that a dollar lip gloss would trade customers down from the six-dollar alternatives, shrinking their total basket.
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What you'll learn
- 1 (04:00) **The Accidental E-Commerce Launch** - Joey explains how a Glamour magazine feature forced them to build a website, despite not believing anyone would order
- 2 (07:03) **Brooklyn Roots & The Fear of Being the Boss's Son** - Joey's upbringing in a Syrian Jewish merchant community and his drive to prove himself independently
- 3 (09:32) **The Real Origin Story: Meeting Scott Vincent Borba** - How a mutual friend connected Joey with a beauty industry veteran who had the concept for a value cosmetics line
- 4 (12:49) **Manufacturing the $1 Product** - Joey travels to Asia in summer 2003 to find factories and figure out how to make quality cosmetics for 35 cents
- 5 (16:33) **The First 67 SKUs and the Retail Rejection** - Launching with 13 categories and getting turned down by Dollar General and Family Dollar
- 6 (22:41) **The PR Pivot That Changed Everything** - Inspired by a radio story about A-Rod and underwear, Joey hires a PR firm to pitch beauty editors
- 7 (30:31) **The $5,000 Website That Launched a Business** - Building a clunky e-commerce site and the frantic scramble to fulfill the first wave of orders
+ Full timestamped outline available in the app
Show Notes
In 2004, Joey Shamah and his partner launched a cosmetics company built on an idea that made almost no sense:
Sell high-quality makeup for just $1.
At the time, high quality beauty products were supposed to be expensive. The biggest brands spent fortunes on celebrity endorsements, glossy ads, and premium shelf space.
And every major retailer told Joey the same thing:
Your idea will never work.
But Joey believed he'd found a wormhole in the beauty business: spend money on the product, not fancy packaging, marketing, or celebrity endorsements. Then, pass those savings on to your customers.
The brand grew slowly, but Joey knew he was onto something when a bizarre rumor spread that Bloomingdale's was buying e.l.f. and raising prices. Within days, the tiny company went from a few hundred orders a week to 18,000 orders a day.
What followed was a journey from a scrappy warehouse operation in New Jersey to one of the most disruptive brands in the beauty business.
You'll learn:
- The surprising economics behind $1 lipstick
- Why retailers initially rejected e.l.f.
- How a single magazine mention launched e.l.f.'s online business
- The retail insight that unlocked national expansion
- How a false rumor generated 18,000 orders a day
- The emotional toll of a $225 million acquisition that collapsed at the eleventh hour
Timestamps:
- 00:10:28 — How to make (decent) makeup for just $1
- 00:18:35 — The dollar stores say no
- 00:24:32 — Glamour comes calling, and e.l.f has 30 days to build a website
- 00:38:27 — The question from a Target buyer that leaves Joey speechless
- 00:39:56 — The H-E-B test that proves everyone wrong
- 00:46:36 — “That’s news to me!” The viral rumor that sends Joey back to China
- 00:59:42 — Scaling to tens of millions in revenue
- 01:07:15 — “It was crushing.” The L’oreal sale that never happened
- 01:12:02 — After e.l.f: Joey stops watching House of Cards and gets back to business
This episode was produced by Carla Esteves with music composed by Ramtin Arablouei.
It was edited by Neva Grant with research by Olivia Rockman. Our audio engineer was Patrick Murray.
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