e.l.f. Cosmetics: Joey Shamah. The Dollar Store Formula That Built a Cosmetics Giant

Joey Shamah and Scott Vincent Borba launched e.l.f. Cosmetics in 2004 with a formula that made no sense to retailers: sell high-quality makeup for just $1. The big box stores rejected them outright, fearing customers would trade down from $6 lip glosses. But Joey spotted an opportunity in the dollar store chains, which were growing exponentially but lacked quality brands. The trick was not the cosmetics themselves — those could be manufactured cheaply in China. The real challenge was the packaging, the molds, the single-part extrusions that kept costs down without sacrificing the unboxing experience. When Glamour Magazine demanded a website before featuring them, Joey built an e-commerce site overnight and suddenly had orders he never expected.

The Viral Surge That Changed Everything

In September 2006, an anonymous email claimed Bloomingdale's was acquiring e.l.f. and raising prices. Within days, the brand went from roughly 300 orders a week to 18,000 orders a day. Joey found himself answering phones, packing boxes, and flying to China with his father to pressure factories into ramping production. They shipped 192,000 orders direct to customers in six weeks, turning a $2 million projected year into an $8 million reality. That crisis forced them to build real logistics, real systems, and real scale. It also caught Target's attention, leading to a holiday end cap program that validated their retail potential.

The Deals That Did Not Close

By 2010, e.l.f. was doing $30 million a year with a mix of web and retail that gave them immediate cash flow. Joey entertained a sale process, eventually accepting a minority investment from TSG Consumer Partners at an $8 to 10x multiple. But the biggest shock came in 2013 when L'Oreal offered $225 million for the whole company — only to pull out weeks later, allegedly because they were uncomfortable with the supply chain. Joey watched the deal die on a phone call with zero compensation. He later called it a blessing in disguise, but in the moment it was crushing. The experience taught him how little control entrepreneurs actually have over their own exits.

Building for the Long Game

When TPG Growth bought a majority stake in 2014, Joey stayed on for 18 months to learn from Clorox and P&G executives, calling it his master's program. He officially left in December 2015, spent a few miserable months binge-watching House of Cards, and then launched Fit for Life, a fitness equipment licensing company. By 2018, he was back in beauty with AS Beauty, acquiring distressed brands like Laura Geller and Julep. Today e.l.f. is a $4 billion public company, and Joey says he would not start another beauty brand today — the attention economy is too different — but he still believes a creative, committed entrepreneur can find a wormhole in any market.