Scaling a consumer brand into big-box retail is the dream of many entrepreneurs, but it comes with significant operational risks. In this episode, we dive into Retail Scaling Strategies with Luna Magic co-founder Mabel Frias, who successfully took her Latina-owned beauty brand from a small startup to national shelves in Walmart, Target, and CVS. Mabel shares her unfiltered experience appearing on Shark Tank, the importance of strategic partnerships, and how to manage rapid growth without losing your company’s soul. Along with host Michelle Seiler Tucker, Mabel breaks down the importance of cash flow management, knowing when to hire help, and why maintaining your vision is the ultimate competitive advantage for any founder.

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Catching The Retail Whale: Retail Scaling Strategies With Mabel Frias

Shark Tank Strategies With Luna Magic

Welcome to another episode of the show. Guess what? I always underpromise and overdeliver. This is going to be a special episode, as I have a very special guest who was on Shark Tank. What year was that, Mabel, when you were on Shark Tank?

The episode aired in 2021.

Somewhat recently. She is packed with strategies, tips, go-to nuggets, and fasten your seatbelt. It is going to be a crazy amount. We are going to have some fun with Mabel Frias. Welcome to the show.

Thank you so much. I’m so happy to be here, Michelle.

It is a pleasure to have you here. We are going to dive in. We are going to play that infamous, famous heartbreak. Have you seen it before?

Yes, many times.

I watched it, and I was very entertained. I do not always say that. Here we go. That is quite an episode.

“Sharks, my name is Mabel Frias, and I am Zaira Frias, and we are the Frias sisters and the co-founders of Luna Magic. Luna Magic is beauty with a Latina vibe. We provide high-quality cosmetics all at great prices. We are all about the three B’s. Bueno, bonito, y barato. Bueno, which means great quality. All of our formulas are long-lasting with minimal fallout. Bonito, which means beautiful. We have beautiful packaging.”

“Y barato, which means great prices. Our customers should not have to choose. No. She deserves to buy it all. As beauty customers, we struggle to find brands that speak to us or show Latinas of her skin tone in the marketing. Guess what? Being Latina is not a seasonal thing. We are Latinas 365 days a year, rain or shine. That is right, sister. Luna Magic celebrates our culture, our culture in every way as evidence.”

Being Latina is not a seasonal thing. We are Latinas 365 days a year, rain or shine. Share on X

I am going to stop right there.

What a wonderful way to start this conversation. Thank you so much.

You, ladies, came out with a burst of energy. A hundred bursts of energy. I always say, look, you got to sizzle. You got to get their attention. You have got like three seconds to impress them. You all were definitely in sync. Tons of energy here. I wanted to pause this a minute ago because I love the color palette. I love the packaging. I really think it is very upscale. I buy a lot from Mac. Some Chanel. I thought it was very upscale, and it looks like a Mac palette, not like a palette you would buy from Mac or anything. It is a great company. It has been around a long time. It does great makeup. I really love the presentation, I love the color palettes, and I love the packaging.

Amazing, thank you so much. All of it is intentional by design. We were growing up as Mac customers, but we wanted to make sure that we created a brand that was in living color and represented the values of our multicultural heritage.

That is important. You guys are going to continue to tell that story. I liked how you came out with the story. I liked how you came out with the music, the enthusiasm, and the advantage.

That was very intentional. I wrote the script for Shark Tank in the process. They encourage you, the producers, to write a first pass of how you want to introduce yourself and your brand. I remember telling my sister that I wanted to make sure that we got across to America that we came from my multicultural background, but making it fun and exciting. We wanted people to feel entertained by our energy and to feel our culture through the screens. At the end of the day, Shark Tank, it is a deal show, but it is also an entertainment show.

A thousand percent, because otherwise people just get bored and I will change.

Like, “Next company.” We knew we wanted to be memorable.

I feel like I was stepping into your culture, into your environment. I really think so. I was just waiting for the margaritas. I would give it to the artists. I am going to play a little bit more, but we are going to talk about your intention, how intentional you are, how strategic you are, but everything you do has really laser-focused intention. A lot of business owners do not have that intention. They throw a bunch of stuff up against the wall and see if something is good. They do not really have a strategy or an objective for being on the show. Let us play a bit more because this is entertaining.

“Creative color names like salud, dinero, y amor. Reggaetón, bandi, salsa, mamacita, papi, y bebé. We are sleeping $200,000 for 10% of Luna Magic.”

Intentional Branding: Crafting The Luna Magic Aesthetic

Let us stop it there. All of the Sharks were laughing. Everything was getting in and feeling the enthusiasm, the culture, and you ladies, you did a great job there. We came up with a $2 million valuation, 200,000 for 10%. How did you come up with that valuation before? Do not give too much away because we are going to get into more detail about the valuation as we continue on.

The valuation was pretty straightforward. It was benchmarked against projected sales. Obviously, the way that Shark Tank is set up is you state your ask upfront, but once you get into the deal, you understand why we are asking for what we are asking. It was very intentional. Aside from the fact that we were projected to generate over, I think, $1.1 million in our first year at Walmart. I do not want to get away. There was that, but also the brand equity piece to it, meaning two sisters, two co-founders.

I also considered the fact that I was a corporate executive with all these years of experience. Even though it was our first time being entrepreneurs, it’s less risky when it comes to the talent of the team. That was also a piece of how I considered the asset. Also, ten percent, we were not looking for someone to come in at 50%, 60%. We just needed at least to ask if the other storyline was a little bit to get us through the hump of launching. POs were committed, but there was a small gap between the commitment and the cash you need to create a product at that point to the operational process of landing them in stores. We are going to get in the weeds.

Let us go back and see the magic.

“As a special bonus, sharks, tiburones, we will throw in some complimentary Spanish lessons or some salsa classes. Hug decent women. Who wants him?

As you can see, we are very vibrant in colors. What I am really most excited about for you to really touch and feel is our formulations. You have our UNO eyeshadow palette, which is our first collection designed by my beautiful.”

When I look at that, I get that from Mac. That looks like a Mac product. Mac has got a great product, and they are a huge brand. I do not know about Chanel, but I have seen this in other big makeup companies, and I definitely look at it and get the feel for Mac. This is very well done for your first makeup company. The colors are amazing. I can see myself using all these colors, and the packaging is brilliant. You guys have never really been in the beauty business. I do not want to give too much away because we are about to get into that, but I did want to compliment you on the packaging and on what I see as the product.

Thank you. The first palette was definitely a partnership. My sister drove product development. She had a background in makeup. She went to makeup school, so she understood formulations really well. My input was more so on design, the naming, what is the cultural relevancy to what we’re creating and making sure that, to your point, most customers would be like, “It looks like a matte palette,” but what differentiated us in the market is we gave our customers that quality at value pricing, what we call Masstige, meaning we wanted them to feel like the product was great.

We wanted them to know that the pigment and the stain power of the shimmer was there. We had made a strategic decision to land our collection in Walmart and then subsequently target CVS. It had to be in a price point proposition. If you are a value customer and you are a makeup customer, instead of going into a store and having to, most folks are on a budget. A $100 makeup can be really expensive. For us, it was important for someone to go in there and be able to create their face with a full Luna Magic collection within a price point that makes it easy for them to buy into our brand, especially so early on.

It makes sense. Again, I am not sure I could compare you to Mac. In a way, I am only because you are new.

We’re new.

You just started this. Yet you had the quality. Somebody who uses Mac all the time was able to identify that right away. Beautiful job on the product.

Thank you.

“Are these individual products, or is this packaged yourself?

Individual products.

Where are you from?

We are from Washington Heights in New York City. Our parents are from the Dominican Republic.

We’re the first women in our family to go to college. I was the first one to end up going to NYU. I went to Parsons Design School for my master’s.

What part of la República Dominicana?

Santo Domingo.

La ciudad?

Si.

Mi papá, San Juan, and my mother, Santiago.

Strategic Revenue Streams: Grants, Partnerships, And Exposure

We essentially took high-low career paths. I went off to Corporate America and my sister went off to journalism school and then makeup school, so she’s the queen behind all the formulations.”

Mabel, you guys have $60,000 worth of sales. What time frame was that in?

That was in under a year. We were still very early on, because, like, the figures they were asking for were year over year. It was like one year, our first baby year. We launched in February or March. We were still working off the kinks of the marketing and where to invest and launching the website, etc.

Was that in a year timeframe? Was that in six months, nine months?

In under a year. That 60,000 was in under a year for the first, when you’re getting started without distribution.

It sounds low, but it’s actually really good because you’re in one of the most competitive spaces you could possibly be in. Being called Medics and doing $60,000 in under a year is really good. I am going to go ahead and play it because you are continuing to grow and want everybody to see how that $60,000 really took off at rocket speed.

“A company that generated income of $103,000 across three ways. Again, $16,000 in product sales, $30,000 as a grant, and then $57,000 through a marketing partnership.”

It was $103,000. Part of that was a grant and part of that was a partnership relationship. It was not all just sales. She had three buckets of revenue, three buckets of congruent revenue. Not everybody knows that they can go out there and get a grant, Mabel. How was that possible? If you could just tell us really quickly.

During that time, there is not that time in general. There are tons of grants for women-owned businesses, businesses of color, entrepreneurs, so many pitch competitions. I knew early on that in order to generate revenue, we wanted to make sure that that was a lane that we would put our hands in there in the bucket. Obviously it takes time. You have to apply. At that stage, we were looking for income by any means necessary, meaning we have product sales, but if we know we’re putting a little capital of our own money, and if there are grants, our free money, you do not have to give up equity in your company. You just have to apply. Hopefully you make it, but it’s free money, so why would you not try to get your hands on free money and help grow your business?

This is really brilliant because everybody thinks, “I have got to go sell and make all this money. You’re in a very competitive industry.” There are grants available for women and for minorities that you really should go and take advantage of.

Go out there. Not only for women, for different groups, but also like veterans. There’s a whole world out there. If you are a veteran, if you are disabled, but are a working entrepreneur, there are so many special interest groups that are motivated to help people advance their businesses through grants.

There are so many special interest groups that are motivated to help people advance their businesses through grants. Share on X

You do not have to do it all alone. You do not always have to do it just on Kickstarter. Take advantage of free money. Take advantage of those grants. We’re going to hear a little bit more about the partnership that was the third bucket.

Building Brand Awareness: The Power Of Strategic Alliances

“Basically, we partnered with a subscription box company in which we developed our brushes, 300,000 units to go out to that particular customer.

You sold to them your brushes that they included in the subscription package.

Correct. To be honest with you, the way that those partnerships are generally structured. You’re not necessarily supposed to make money because it’s marketing. My beautiful baby sister, whom I called Señorita Wonderful.

Much better than Mr. Wonderful.”

Was that intentional to call him Mr. Wonderful?

I definitely wanted to, because my sister is a fierce negotiator. We made money on that marketing partnership, because I told her, “Listen, we need to make money somehow.” That was just the directive, and she followed through, and we were able to make a little bit of income from that deal that, generally speaking, most companies do not, so I told her, okay, congratulations, you’ve graduated your senorita to wonderful, you guys.

Again, the energy continues throughout the entire show.

“The Senorita Wonderful did a fantastic job of sourcing the factory and also really negotiating for every penny for us to generate a little bit of income. Good for you guys.

The part that my sister missed is that the purchase order was $498,000, the value of that purchase order. We’re talking about the brushes. We presented the brushes to the subscription box.

They supplied it directly. After all that crossover, you had $57,000 in profits.

Correct.

This is probably one of your top.”

You forgot that piece, sister.

There are layers to that deal. Basically three hundred thousand units. It’s a subscription box company that is really focused on beauty and discovery. Aside from the income, meaning it was a four hundred and change thousand dollar deal because we negotiated our margins with our suppliers, we were able to generate a little income. Also, the value of that subscription box is that we got reviews from customers, so that was also part of the deal. We were able to see in real time what customers thought about the brushes, how they used the brushes. We also got a lot of social media impressions from that because that subscription box company created a social media following of beauty lovers all around the world.

Remember her three buckets? She sold $60,000. She got a grant. Now she had this partnership relationship where she made 57,000 off of. She got her name out there. They got their brand out there, and it opened up other opportunities. People do this all the time. I really want you entrepreneurs to think about this with your product. People do this all the time. They’ll try to get on Oprah’s Favorite Things.

I’ve been on Oprah’s Favorite Things several times. They’ll go to see what’s a big show. Good Morning America. They’ll go to the daytime show. They’ll go to Entertainment Tonight. When you do that, and you shop the deals, you’re really getting that exposure, huge exposure. Even if you do not make a whole lot of profit on those deals, the exposure alone.

300,000 units meant 300,000 unique customers. You know how much money it would have cost us to reach these people all across the United States of America? We had 300,000 new potential repeat customers or people that got introduced to our brand in a very efficient and quick manner. Think about it. How often have you had 300,000 people in your role?

It would take forever.

It would take years.

What was the retention rate of those 300,000 customers?

Over 80%, actually, because the brushes were so successful that the subscription company then enlisted us to co-create products together in a two-year deal. That’s why that’s the value of sometimes taking a risk. Not every deal will make you all the money, but if you are in the right partnerships, it can turn into other deals. Eventually, we launched over thirteen additional products.

Now we had a marketing channel every quarter that would get something from Luna Magic. We did blushes, lipsticks, and additional brushes. Those were like more blending brushes. We did things like powder brushes and blotting products. The value of the deal to me, the gift that kept on giving, because aside from that 50,000 in change that we made that first instance, the value of the partnership over time was priceless.

Did you get those prospects’ names and contact information or that?

We got reviews.

Can you email those people? Could you contact them?

No. You cannot email those people. That’s not the deal. We are essentially like suppliers to this company that owns the relationship with the customer. We get all the syndicated reviews, which to us is meaningful. That’s meaningful. We got to syndicate those on our website. Even when new customers were coming to our website and reading reviews, they got very high-quality reviews from true beauty lovers because of the process that our partner did to help us acquire them.

Even like with Amazon, my entrepreneurs, you do not get the clients there either.

No.

However, this partnership, what you made $57,000 off of it, but all in all, how much did you end up making off of it? You recall it?

From that partnership? Do you mean through the two-year deal of that partnership?

57 times 13, you can kind of do the math. As I said, I saw those as an incremental. That’s the value. The goal of that partnership was it’s not a retail channel. It’s not a Walmart or Target. The goal of that is brand awareness. If we made incremental income, that’s gravy. That’s the other thing that I would say about entrepreneurs. Understand the value of each thing and what value it brings to your business because you need all of it. You need partners that can help give you POs purchase orders because that’s how you bring income into the company. You also need partners that have true relationships with customers and can help you market your brand, your story, and your company.

Understand the value of each thing and what value it brings to your business. You need partners that can help give you POs, and you need partners that have true relationships with customers. Share on X

Did you get to keep your brand, like were your brushes all branded?

Yes, all branded. We actually went into product development together. That was the value of that partnership. We were true co-creators. We would not create anything. Nothing was private labeled. We literally went on a journey to look at the assortment, what the gaps were that we had, what need we were solving within this beauty ecosystem, and did it align with where we saw the growth of our assortment over time. It was very strategic.

It’s strategic alliances, those alliances, those JVs that really can pay off. You do not always make a lot of money. Sometimes we look at it as a loss leader, but that loss leader gives you brand exposure, gives you credit. All these 300,000 customers, I think you said, were able to see your brand image and probably come to you and order from you on their own.

They ordered. It’s funny because once we did that first program and we spent a lot of time being on the road, like SSFest and beauty shows all across the country, those beauty lovers go to these types of trade shows like BeautyCon. They were like, “I remember your brushes from this program.” There was a little bit of a cult following because of the way that program is designed. Those customers get a beauty box every month. They are really beauty junkies. It felt really cool to see that synergy where we did this program that was mostly digital, but when we would show up as a brand in real life, there was already a connection.

Every Shark Tank guest sends me their products, so I’ll be waiting for my brushes.

Okay.

“I would recommend that you swatch the green one. It’s called Vinedo.

If I just go onto your site, what does this cost me?

It’s $26 retail.

What does it cost you?

$3.40.

Those are great margins, which is why this industry is so competitive. It’s a giant task to acquire customers.

I’m happy to announce that although we’ve only had $16,000 of product sales this year, next year we’re projected to generate $1.1 million because we’re going into Walmart.”

I love that $1.1 million. Every investor wants to know how, so let’s listen to her how.

“You’re into Walmart in retail.

How many Walmart stores?

We have two programs that we’re walking towards. Our first program is one thousand 1,538 stores opening.”

Now, let’s just think about that. That’s unbelievable to go from 1,054. I’ve been in business for how long?

Not too long.

Every entrepreneur’s dream. Do not want to get too far away here. I want to keep talking about this. That’s every entrepreneur’s dream that has a product.

Scaling For Retail: Walmart, Logistics, And Testing

“The testing for the end caps. When you say testing for the end caps, what do you mean? Basically, we’re doing a six-week test of our capsule collection. What’s on the table right now is between 350 and 800 doors.

Who is your logistics partner going to be for this deal? I have lots of companies to sell to Walmart. It is a challenge to keep up their logistics because you’re going through a thousand stores.

Quite frankly, we’re vetting suppliers. That’s why we’re here. We’re here for help.”

I know that’s why we’re here.

That’s why we’re here. We’re here for help.

Look, entrepreneurs, you get a great big contract, like a Walmart, and then you’re like, “Do I have to sell the foundation?” It’s not. This is when I walk all six Ps in my book Exit Rich? Do I have the distribution in place? That is where the house can crumble. You guys are very strategic, so listen to this, because I am so impressed.

“Raised or put into it yourself.

We have invested $250,000 of our own savings.”

I do not know why they add so much money.

I know, it’s like you all are crazy.

It is $2.5 million. It’s $250,000.

We need more, you know?

Of course. It is an entrepreneur’s dream to get your products into Walmart. Your dream can turn into a nightmare if you have not built the solid foundation and what I call the six Ps, which are found in my book, Exit Rich, and if you do not have that distribution in place. We are going to see how Mabel and her sister tackled this. Ready?

Your dream can turn into a nightmare if you have not built the solid foundation. Share on X

“Let us talk about the Walmart box. It retails for $5. We decided to give them the $26 eyeshadow palette in their Walmart box. We gave them 10,000. It was a $30,000 investment. What we had intentionally decided is, ‘We will give you this as an investment, as a marketing cost for us. In exchange, let us into the program.’

They give you over a thousand stores?

We got 4.8 stars of customers saying, ‘We love this product, we’re so excited.’

I cannot believe there’s a Latina-owned. That is what convinced them to give you a thousand-plus stores.

Correct. You have to pay for the end. “

Four point eight stars out of how many people?

Ten thousand.

Four point eight stars out of 10,000 people. This is another huge accomplishment that I want entrepreneurs to pay attention to because ratings are everything. You can get 4.8 out of 100, but they did it out of 10,000. That is just unheard of.

A big sample size, big numbers.

We are talking about women. They always like to give good ratings.

Right, 4.8 stars.

“How much are you paying?

$65,000. Against an order of what for the end cap?

The total order will be $360,000 minus $65,000 minus the cost of the product, which was about $200,000.

How much cash do you guys have in the bank right now?”

$200,000 is good. Yes, it is normal to pay for an end cap. I have done a lot of business in retail. That is normal. She still profits afterwards.

“$157,000. Let us take a step back here.

You guys are all in on this. You have $157,000 left. You just told us that you were going to have to buy $200,000 worth of product plus $65,000 for the end cap. You do not have $265,000.

No.

That is why we’re here.

Guys, in order to get there, it takes a lot. Not just financially, but organizationally. There are going to be specific needs there to fill in those gaps for you that I think are going to be challenging. I just cannot get there. For those reasons, I am out.”

Mark is out, and that’s a point that entrepreneurs pay attention to. If you get this huge order, just like we spoke about. You have got to make sure you can capitalize it. You have got to make sure you have the working capital, or you can get a line of credit against your purchase, your POs, purchase orders. You have got to make sure you can get that money to fulfill. That is what happens to a lot of entrepreneurs that go on Oprah’s Favorite Things sometimes, that go on some of these TV shows like The Today Show and stuff. They do not have the money to fulfill the order. You have got to make sure you have all your ducks in a row. There are a lot of moving parts, right, Mabel?

Correct. Lots of moving parts. Another thing I want to call out is how to handle rejection. In that episode, I remember telling my sister, regardless of who comes in, even if they bow out, we thank them, because we are grateful for the opportunity. Just to call that out, that, in addition to what you just said, is about professionalism and still having good energy, even though you may not get the outcome that you intended.

You always have to be polite. You always can be nice, because guess what? You never want to burn bridges, especially with a Shark who said no to the deal. He said he was out. This was, I think it was called Bouqs Florist. That was the name. Do not quote me on that, everyone. Robert remembered that company. It is a big florist that came onto the show. It did such a beautiful job. Robert is like, “Let me rethink this.” I do want to partner with you. Robert ended up partnering with him because he was professional, respectful, and he never burned bridges. You never know when a shark jumps back in.

You never want to burn bridges, especially with a Shark who said no to the deal. Share on X

“Thank you for your time.

In twelve years of Shark Tank, I have never ever seen a company as early stage as yours that has both an end cap order and a 50% regional rollout in Walmart. You need a logistics partner brutally. You’re like the classic. You got out fishing in a little boat, and you caught a whale. It is just dragging you right down to the bottom of the ocean. You’re hanging on, you’re trying to reel it in, and it’s saying, ‘I am going to eat these two girls when I get down here.’”

I love that analogy. Look how beautiful your sister is. She is beautiful. I love that analogy. That was such a great analogy. It is true. We’re a little small boat, and we’re in that big ocean. Whales try to catch those sharks and do not really have the infrastructure for it.

“I’m really impressed. Boy, do you have a nightmare ahead. I am out.

Thank you.”

Negotiation Tactics: Handling Rejection And Shark Offers

To every nightmare, to every problem, there is always a solution. You really want to pay attention to the words because they do have a lot more experience than most entrepreneurs. You do not want to hang on every single word. You want to filter it out. Here comes Barbara.

“Anyone?

I guess this is like anyone.

I love the story. I love the hustle. I love Dominican, Washington Heights. I like everything about it. Unfortunately, we’re in the business, and I cannot do it. There’s a conflict. For those reasons, I am out.”

Was that all because of Jennifer Lopez?

I know, and then they broke up. What’s funny is someone on Twitter, when they broke up, went to his page and said, “Luna Magic Girls are here.”

Now you can invest. That’s funny. I love it.

We understand.

“What is your order with Walmart?

$400,000 PO value for looking at both programs.

$400,000. You have how much of that cash?

We have $150,000 in the bank.

Why are you here only asking for $200,000? Runs a little short.”

My exact question when I was watching this show, because we always want to know, as investors, I’m an investor, how much money do you need? What are you going to spend it for? You need it more than $200,000. Why did you just ask for that?

The way that the show was organized, we were also advised by the producers, like what wiggle room we could ask for. That is a number where we felt comfortable saying, also in relationship to valuation. It goes back to the valuation and then the percentage.

We could just ask for more and give away more equity.

You could ask for more, give away more equity. We weighed all of those things, and we knew going in that was likely going to be a question when you ran through the math. For us, it was the valuation. We did not want to go in there and question the valuation. You’ve seen episodes before where they’re like, “You valued at $10 million, where did you get this number?”

We might have hit them.

Exactly. We wanted to come across as sound, reasonable businesswomen. That was also important to me. The perception that we were in tune and aware and that we were not entrepreneurs who were delusional. Yes, we were a little like we caught a whale, but there was still some strategy involved. Our 200,000 for 10% was just the beginning of a conversation. That’s the thing when you’re negotiating. The deal can change, and the deal did change after. That’s where we felt comfortable, where they were not going to be like, “Why would they ask for 400,000 for 10% at 4 million?” At the end of the day, they do math. It’s a math thing.

It is a math thing, and it’s a slippery slope. If you go in there asking too much and the evaluation is too high, everybody is off.

Faced in their mouth from the beginning.

You ask too little, and you set yourself up for failure. Unless you can get the shark to agree to insert so much money and provide a credit line against POs.

“Think that in talking to you Sharks, we could find maybe different ways, meaning we’re open to a little bit of equity, a little bit of PO financing, line of credit.

You came and asked me for $200,000. It’s rare that the sharks say, let me give you more money. They usually say, ‘Let me take more stock.’

Are you open to taking more equity?

I’m always open to taking equity. I love you guys, but you confuse me. I was sitting here. I rewrote your numbers nine times. The business is a little bit of a mess, probably more than I’m even picking up, but I like you. Here is what I am going to give you.”

When I heard that, I was like, “Barbara, what’s wrong? What are you missing? I did not write your numbers down nine times.” Your numbers were pretty simple to me.

Actually, that came up in the comments. People were like, what? Also, to show maybe they made it a little dramatic. There were people in the episode when it’s on YouTube that they were like, “Barbara, what? You’re a mess, but let’s invest.”

Like, “Barbara, wake up because something was complicated.” This was pretty simple. The profit wasn’t quite set at the beginning from that package partnership. I did not find it confusing. I did not find the presentation confusing. I did not find the numbers confusing. I thought you guys told a clear, great story with lots of energy. I was wondering where she was coming from. All I can say is, “Wake up, Barbara.”

“I do want to give you the $200,000.

Wait, do I really want to do this?

While she’s thinking, I am impressed by everything you’ve done. I know how hard it is to do cosmetics. I am invested in something else that is a cosmetic line. I do not want to be in a conflict. I wish you the best. I’m out.

Thank you.

Thank you, Lori.

I mentioned you were slightly messy in your explanations on the finances. That worries me. I’m the most organized person I’ve ever met. I can help you with that, get your house in order with great clarity. I am going to offer you a greedy offer, but it’s up to you. I’ll give you the $250,000 in the form of only a credit line to fund your orders, because you’re going to need 250, not two. I want 30% for that.

I actually think that makes sense for you because I have a hurricane right now. I have companies that are struggling with a third of the exposure you have to Walmart, just trying to keep up.

Let us actually talk about what other additional things we’ve been doing to market ourselves. I would love to hear a response to my offer first.”

Now I am going to have to criticize you a little bit here, Mabel. That’s one thing you never want to do when somebody has got an offer. You never want to go back and keep selling. I have been in sales my entire life. In fact, I used to teach people how to sell at Dale Carnegie and Xerox for years. People have talked themselves out of it all.

Let me explain why.

I want to tell entrepreneurs, you have got to be careful with that. Me out like that.

What I was trying to achieve was I did not necessarily, I did not like the terms, I was trying to, to your point, listen, I did not go to sales school. I’m not a professional seller. I just talk, and I make sense, and I’m a former business executive that loves being an entrepreneur. I do not have that classical trade.

You also are a freaking brilliant cookie, okay?

Thank you so much. I appreciate it.

This is all like homegrown in my blood kind of a thing, but I knew, I was like, “I’m not a hundred percent comfortable with the deal,” but to your point, what I was trying to achieve, how can I tell her these other things that we’re doing to try to counter, but that was not on the table, because to your point, we were just down to Barbara, which was very risky.

You only had one. You’re down to Barbara. What I would have done in your shoes, I would have said, “Barbara, let me tell you a few more things that we’re doing. Let me clarify and tell you a few more things, because I almost looked like you were talking to other sharks that were already out.”

No, I was just like, let me explain this additional marketing thing.

He looked aside, and Barbara was like, “What about my offer?”

She did not feel connected. I agree.

She did not feel connected, and she was already slightly confused. I always say a confused buyer is a buyer that never buys. I have been that buyer where I am like, “Wait a minute, your presentation is so confusing. Too many options, I am not buying.” I understand what you were doing, but these lessons are really for, we’re not going to let the cat out of the bag, but these comments I’m making for those entrepreneurs out there because I’ve seen it happen time and time again, when I move on to other Sharks and bam, that Shark is out and I walk out of the tank with no yellow dog.

You walk out empty-handed. It has actually happened to other founders before that you’ve had. You walk away with nothing.

A bird in the hand. We know that.

“Does it include the potential opportunity of future PO financing as we grow and improve ourselves through the business?

No problem at all. I never mind funding any of my partners as long as the orders are there. You get 30% no matter what.

I get 30% on day one.

Can we counter? I know it’s the only offer.

I’ll tell you what. I’ve walked down the path with the big backstories with many products. Mr. Wonderful, for once, is right. It’s a hell hole. You have to know who to talk to, when to pull back. It’s so complicated. It’s a lot of work on my part.

I think you have to make a decision. You guys are owners”

I really love how you finesse this and how you negotiate without losing her and saying, “I know it is the only offer,” because entrepreneurs, you do not always have to take the first offer. You do need to negotiate. You just need to deal with finesse. You did a great job with that.

Thank you.

“Barbara, you have a deal.

You guys are going to crush on Barbara. She’ll be great. Hasta luego.

Bye.

Due Diligence And Growing Into Big Box Retail

We underestimated how difficult the Shark Tank is. We are very grateful that we walked away with a deal. I mean, obviously, word since we’re entrepreneurs and we do not take things personally, and the fact that she invested is going to help us clean it up.

That is going to be hard work.

The biggest danger to both of them is they have stars in their eyes because they hear the name Walmart. “Walmart wants us.”

Look, when they came in here, I thought they were selling pizza.”

Thank you for replaying that. Many wonderful memories.

That was a very exciting show. Lots of personality. Let us talk about life beyond the tank real quick. You did do a deal with Barbara?

No, actually, we did not. We decided that we were negotiating for eight months, but we decided that the terms of the deal at that moment, we needed someone who could help us with the true operations, like she called out, and her capabilities at the time were mostly just marketing. She’s still a good friend to the family and whatnot. She was really nice and kind about it. She is like, at the end, “Girls, you could sell socks for all I care. You guys are just stellar. You’re going to do great. I wish you the best.”

It is good. That is why I like to talk about Beyond the Tank because I say, what is it? Like 90%, 97% of deals in the Shark Tank never come to fruition ever. For a multitude of reasons, because you took that deal even though you did not want to, because you did not want to quite give up 30%, but then you felt like I should take it because I do need a shark and I do need this and that. The seller’s remorse probably sits in, and then eight months go by, and you’re like, “Maybe I do not need her.”

It’s more so that you do not realize until it’s time to part with something with your company. You do not realize how actually personally connected you are to this dream. That is what we learned in those eight months. We were like, “If we are parting with equity, this is somebody you’re getting married to, and you need to make sure that person is a multiplier to what you’re already doing. You have a lot of conversations, and you know, and I have heard from other Shark Tank companies that were in due diligence, and it did not quite work out. Sometimes it’s the shark that backs out that decides, I learned a little bit more. Maybe we do not think they’re the best partners.

It goes both ways.

It’s a conversation, and it does not take away from the Shark Tank experience. It’s still meaningful. We did go in with all the best intentions of closing a deal, but due diligence, what people do not realize is on the show, you have like an hour with the sharks. In due diligence, you go through more layers. The lead goes to set up the vision of the company. You ask more questions.

It’s almost like Shark Tank. You’re just dating somebody. In due diligence, you’re meeting the family, and you’re making sure that you’re equally aligned with the vision of how you’re going to raise this baby together. It is okay if it does not work out. As you said, over 90% of deals do not close anyway. It was a life-changing experience. 4.6 million people watched the episode on opening night. That kind of reach.

There’s a little bit I want to unpack there. One of the biggest values for business owners to go on there is it blows up their products. It blows up their website. Before I get there, I want to unpack something real quick. You said the due diligence, it was eight months. It’s layers and layers of legal documentation environments, all different things you can imagine and then more. That due diligence you guys go to for Shark Tank is the same, sometimes even more intense, when you go to a sale of your company.

There is paperwork, there are lawyers, there are ways of looking at it. Each party has a view of what they want out of it. It’s a lot of strategy and listening to each other to make sure that you can arrive at an agreement.

When you go to sell the company, you’re typically selling 60%, 70% of it. You do not have a majority partner anymore. It is really important to realize the diligence that goes into these things, especially when it comes to selling the company. The deal did not go through. Your friends were Barbara. How did the Walmart deal go? Did you fulfill all of those thousand?

We fulfilled all of those doors. In fact, we doubled. The way that I saw Walmart, we had to grow an account. We got our first start. We were very grateful to the leadership team. We had to make sure that we met our metrics, because the first step is to establish the brand in the store. Step two, you have to make sure that you are doing enough marketing to attract customers, to let customers know that when they go into those stores, please shop for Luna Magic.

There’s like the long-term strategy of growing, going from 500 stores to a thousand stores. Those are long-term strategies of how you grow the business that way. Ultimately, a decision that we made was to grow in other accounts. We subsequently, after launching Walmart, launched in Target. After that, we launched in CVS Pharmacy stores nationwide.

That’s unbelievable.

All in 18 stores. Just really heads down, we have the winning product. That’s the other thing that I would tell entrepreneurs. Once the momentum is hot, you have to go if you have the capital, obviously, if you have the right team. For me, being the leader and driver, I was living. It was my dream. It was easy to go 100 miles an hour because we knew that demand was there.

Once the momentum is hot, you have to go if you have the capital. Share on X

You can definitely do that. It’s not always sustainable, but you’re right. When the momentum is there, when the fire is hot, you have got to strike, and you cannot let the grass grow. How were you able to come up with the capital now that Barbara was out because you were short on those orders, fulfilling those Walmart orders?

We definitely looked to family for more money. Also, a lot of this was in financing.

Who did you work for, Mabel, real quick?

I worked for Nordstrom. I actually got my start in my career at Macy’s executive training program. I worked for a few high-growth startups. I was not a newbie when it comes to looking at spreadsheets and thinking about numbers. That was one competitive advantage that I had that I brought into the world of being an entrepreneur.

You and your sister were different.

She was the creative product developer, which is a skill set and a superpower. You want to create products that people are actually going to buy. That art and that science of creating products that are going to go on people’s skin and are not going to create a rash or whatever. That is a very important job that she had. My job was the strategy, the growth, meaning for Luna Magic. I learned how to set up a warehouse. I had never done that before. When we were on that Shark Tank stage, we did not even have a warehouse. I am like, “I think we need a warehouse. I think Mr. Wonderful is right. Where is the inventory?”

Which he had to take Mr. Wonderful is right.

I think he’s right. We rushed home because we filmed that episode in Vegas, because it was during COVID, we rushed home to LA, and I was like, “We need to start looking at warehouses. Where in the city are we going to set up this warehouse? We need a warehouse manager.” Little pieces by pieces. You realize, even though we were selling makeup, it turned out to be a deeply operational business. When you are plugging in a new company into a massive operation like Walmart, Target, and CVS, you need to have financial discipline and financial planning, which we did. Obviously, managing your cash flow in a way that can sustain the growth of the business.

You got into Walmart, Target, CVS. How many doors are you in now, and what was the timeframe?

If you think about it, we were zero, and then we grew to maybe a thousand doors. Right now we’re in around 2,500 doors. This is the potential of the store count. Target has 2,000 stores nationwide. Walmart has 4,500 stores nationwide. CVS has 10,000. Growth can look a lot of different ways. Especially now with TikTok, it’s another channel. Instagram, Facebook. There are also international accounts you can grow with. My job, which obviously I’m on a podcast around, Exited, I grew it, I set it up. I established great relationships for these accounts. Now my sister is leading the charge.

You sold the business to your sister.

Yes, a private family sale so that she can now take that. The thing is, what people do not realize, we’re two co-founders, but we had different visions of how we wanted to grow the company. Also, for me personally, if I can be truthful, I was a little burned out because it was such a massive ride, and I needed to take a little breather.

The Entrepreneurial Toll: Managing Burnout And Serial Success

There’s that famous B-word, you all. Burned out. When you run at a fast pace like Mabel and her sister did, there is going to be some burnout.

There is some burnout. The burnout, we got lawyers involved, and we reached a number that made sense for both of us, that was not going to tank her and was and it was fair for the value of what I contributed to the business. Now I’m actually on my second journey. Now I’ve launched a fragrance company, completely different model. What I’ve discovered through this process is, and my sister figured it out too, I’m just born to be a serial entrepreneur. I love growing things. I love taking things from scratch. Now we get to be in our beauty industry. Our family produced not one, but two entrepreneurs, one in cosmetics and one in fragrances. We’re still bringing our unique identity, our point of view, to delight customers today and tomorrow.

When you said you’re the brush, you send your perfume too. When you’re going to exit rich, who are you going to exit rich with?

With you?

Say it with me.

You weren’t around during the first one.

No, I’m talking about this journey.

Now I know who to call. They say that with your second round, you are a lot smarter. I know a lot more than I did the first time, so things in some ways are a lot easier. When it comes to the operational side of the business, I already know what to do, what not to do, what to set up. Now I feel really blessed that I get to now work on a new dream, tell the new story.

I just want to point out how significant this is because you’re on 21. What was the timeframe that you grew to 2,500 stores? Was that in three years?

Eighteen months to two years.

What year did you exit?

She was in in 21. I need you guys to understand that. This is so profound. I talk to owners every single day. I talked to an owner two days ago, and they’ve been in business 30 years.

I did not know that.

Wait, 30 years. Guess what the revenue is, Mabel?

Under a million.

Right at a million. 30 years. These ladies did an outstanding, dynamic job. They should be entrepreneur of the year. That was just incredible growth. Guess what? A lot of entrepreneurs that got so much growth so quick would typically crash and burn. They figured it out because sister’s a creator. She’s a business mind.

You need both.

You have to have both. That’s the problem with most entrepreneurs. They think they can do everything. They think they can do it themselves. They do not want to hire somebody that’s smarter than them.

Leadership Lessons: Hiring, Delegation, And Asking for Help

You need to. We also had one thing I will say. We had a great team. One woman came. I actually poached her. She had worked with me in my previous company, a corporate position. I also was able to bring in a high-quality talent who knew how to operate within the company of doing business with corporate, even though we were small. We had a great warehouse manager who’s still with the company.

We had a great family investor who eventually kept doubling down to support us in the growth to make sure that we remained privately owned and that we could really control the vision. People look at me and my sister, but it was a community. We had great relationships with our buyers. We had great relationships with consultants that we brought into the business to help us think through the operational supply chain. That’s the other thing I want to say.

Learning how to collaborate and ask for help is a superpower. You’re not supposed to know everything, even I, with my corporate experience. There was so much that I did not know, but I learned through that process to ask for help. It’s super sexy to ask for help. Now I’m like, “I need help.” What you realize is when you ask for help, most people are happy to help.

Learning how to collaborate and ask for help is a superpower. You're not supposed to know everything. Share on X

Just make sure when you ask for help, you ask entrepreneurs for help who have already been down the road you want to go. If you’re asking anybody, everybody has an opinion. Everybody has a but.

You need to know who, correct? That’s the truth. The team that I created, we were probably one of the youngest founders. I remember going to trade shows and people were like, “You guys are the owners?” I was 30, 31, 32. I’m like, “Yes, we are.” Most owners were older in their journey. To your point, knowing who to ask for help, like I remember our CFO. He was a serial CFO for companies that have gone way further than Luna Magic. That’s also the part of it, like who you’re asking for. Also, at the end of the day, when you’re asking for help, the beautiful relationship between self and founder, being a founder, is intuition.

Nine times out of 10, you have to listen to yourself because at the end of the day, especially when you’re starting a new company, the vision sits with you. You are the ones who decided to birth this baby, if you will. Even though you’re going to send your baby to preschool and high school, there’s still work as a parent that you have to do to make sure that your vision that you want of how you want this baby to evolve, is still felt and it’s still guiding the collaboration.

I’m just laughing because I talk about the cycles of a person and business. First you’re born. You’re born with an idea. It’s in the incubator. You got the incubator, then the business is your baby, that infant, that toddler, and then it goes to young teenagers all the way to adulthood, which is where you should sell your company, because that’s usually the best year ever going to be. Like Toys “R” Us was $11.7 billion. Two years later, they go out of business, file chapter eleven, then they file for bankruptcy and close down all the stores you sell in your adulthood.

We really do have to wrap it up. You’re absolutely right, Mabel. A lot of the answers are right in here. However, because of all the noise, you have to quiet the noise, step away, and have some peace so you can think. Mine is usually on the airplane. Here’s the big thing that I always say. It’s hard to read the label from the inside of the bottle. You need an outsider’s perspective to read the warning signs and keep you out of the danger zone. That’s a Michelle Seiler Tucker quote.

I’m happy that I met you.

Me too. I’m happy I met you. You’re a wonderful guest. Thank you so much. Love, love, love. We are going to be forever friends, and we’re going to collaborate and do some things together. To my Exit Rich family, all of my audiences, all my subscribers, thank you for tuning in. Make sure you share this with your network. Get the message out there and keep innovating, keep marketing, and keep subscribing. Go out there and subscribe to the show and share this episode. Thank you.

Thank you.

 

Important Links

• Mabel Frias
• Mabel Frias on LinkedIn
• Luna Magic

 

About Mabel Frias

Mabel Frías is an accomplished entrepreneur and former corporate executive with a winning track record of executing merchandising strategies at fashion, beauty and lifestyle brands like Macys, One Kings Lane, Violet Grey, Nordstrom and Savage x Fenty, lingerie by Rihanna. Mabel kickstarted her retail career as an executive trainee in the prestigious Macy’s Executive Training program in NYC.

As the Co-founder and lead business driver of LUNA MAGIC, Mabel managed a team to scale the beauty brand into national distribution at Walmart, Target and CVS retail stores in 18 months. LUNA MAGIC has been featured on ABC’s Shark Tank, Good Morning America, Allure, WWD, Popsugar, People En Español, Telemundo, Cosmopolitan & more.

Mabel holds degrees from:

• New York University, BA – History

• Parsons School of Design/Cooper-Hewitt, Smithsonian Institution, MA – History of Decorative Arts & Design

• UCLA Anderson School of Business, MBA Riordan Graduate fellowship

• Stanford Graduate School of Business, Executive Education – LBAN Business Scaling

• Tuck Dartmouth School of Business, Executive Education – Supply Chain Disruptions

Mabel is a proud New Yorker, being raised in the community of Washington Heights in Manhattan by Dominican parents. She now lives in Los Angeles with her daughter Aalia (ah-lee-ah) and is a Young Professionals Board Member for the American Heart Association.