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Serial entrepreneur Marcia Kilgore has no trouble calling out ineffective or unfair practices in beauty. “When you buy a $99 cream, you’re probably getting something that’s worth about $6,” said the Bliss and Soap & Glory founder.

Tired of the markup that working with a retailer requires, Kilgore launched her latest project, Beauty Pie, a direct-to-consumer membership service. Customers pay monthly fees that then go toward buying products at prices much closer to manufacturing costs. “We’re charging one-tenth of what a normal beauty company would charge,” she said.

Kilgore joined the Glossy Beauty podcast to talk about her previous experience at Bliss and Soap & Glory, the typical Beauty Pie customer and the road to profitability.

Here are a few highlights from the conversation, lightly edited for clarity.

The beauty industry’s illusion of choice
“A lot of people don’t know this, but most luxury brands and even non-luxury brands buy their products almost ready-made from 10 or 15 great manufacturers. And you can choose their mass formulas, middle formulas or their luxury formulas, and then you put your name on it. You choose your packaging, and you go. It’s a little bit different in skin care, because you can add different levels of different active ingredients, but a lot of brands just pick up what these labs will show them. The labs do all the trend work, they do the new ingredient work. They’re kind of one step or two steps before the brand. Product development is not really what you think it is. It’s more about packaging.”

Ingredients suppliers and labs
“You will see new ingredients coming from the ingredients suppliers, which are a level below the labs. You have probably 100 good, raw ingredients manufacturers and suppliers. They’ll spend years harvesting different plants, looking for activities that can be claimed on skin from these different active ingredients. Once they’ve gotten activity that can be claimed, they will take their ingredient to market and they will sell that ingredient to any cosmetics company or lab that wants to buy it.”

When rocking the boat is welcome
“This was like stepping off a cliff. First, you don’t know if anybody’s going to join, because it’s such a radical idea. And also, we didn’t know if the labs were going to actually supply us after they found out what we were doing with all that product that we had ordered. I remember going to one of the big Italian labs. I had an 80-page slide presentation, and I was talking about all the different trends — it’s all about DTC, it’s all about transparency — and asking them to come along with that journey with me. At the end, I was thinking, ‘Oh my God, they’re going to kill me,’ because we were about to tell everybody what cosmetics truly cost to make. And in fact, they hugged me. They said they hadn’t seen anything new in beauty for 20 years. Everybody comes in, and they say, ‘Oh, look, we’re going to package in white, and the logo is going to look like this.’ And that’s the only difference that you see. It’s all the same stuff.”